Health Reform 2.0: New Efforts on Value-Based Health Care

Health Access, California Pan-Ethnic Health Network (CPEHN), and Consumers Union and other groups are teaming up to improve health and health equity for California consumers through transparency, benefit design, and Medi-Cal reforms. Through our new Value-Based Health Care initiative, supported by the Robert Wood Johnson Foundation and working with the national group Community Catalyst, Health Access and CPEHN will build on the state’s success in implementing the Affordable Care Act (ACA) to ensure that reforms to our health care delivery system lead to better health and health care and improved health equity for all Californians.


California has come a long way in implementing and improving on the ACA through consumer protections, a robust exchange, and a promising start on delivery system reforms. Together with Medi-Cal, Covered California has been successful in covering more than half of the uninsured and in reducing premium costs. Going forward it plans to step up its “active purchaser” role to ensure enrollees are getting the right care at the right time and place through delivery system reforms and transparency initiatives scaled for market-wide impact.

Pending approval by the federal government the state’s Medi-Cal 2020 waiver renewal, too, sets an ambitious agenda aimed at better care, lower costs, and quality improvement—the “triple aim”— for beneficiaries. As part of the Medi-Cal 2020 waiver request, county-level health systems would have incentives to find efficiencies in delivering care, and reorienting indigent care programs to provide primary and preventive care outside of hospital systems.

In California many challenges impede our ability to achieve the triple aim. California has persistent disparities among LGBTQ people, people of color, immigrants, and those with limited English proficiency. Given California’s diversity, it will be impossible to achieve triple aim goals without directly addressing disparities. The project therefore adds a fourth dimension to the triple aim, equity, to keep the focus of triple aim initiatives on opportunities to track and reduce disparities by race, ethnicity, income, sexual orientation and gender identity (SOGI), and other key demographics.

Transparency: Consumer Driven Tools; Improved Data Collection, Analysis & Reporting

The project will make the most of Covered California’s emerging efforts to collect and analyze claims data to ensure that enrollees are getting the right care and the right time and place. California is also in the beginning stages of setting up a statewide Cost and Quality Database (called “All Payer Database” in most states) or collection point for all data on claims, charges, payments moving through the health care system. The aims here are similar: to pinpoint waste and inefficiency in the health care system and to collect demographic data to help identify disparities and promote equity, among other goals

Better data is also needed with regard to complaints. As the state shifts more Medi-Cal patients into managed care and more consumers are enrolled in Covered California and private insurance, it becomes that much more challenging to analyze complaints by insurance plans as well as to identify disparities and develop solutions to address them. Plans need better standards for data collection and direction on how to make meaningful use of these standards to address quadruple aim goals. A recent Consumers Union survey found that 87% of consumers do not know the state agency tasked with filing complaints. As we work to improve the use and accountability of complaint processes, we will make sure they, too, are configured to meet quadruple aim goals.

Value-Based Benefit Design (VBD)

Insurance benefit designs can help reduce costs for consumers and improve health care outcomes, or they can limit access to care, shift costs to consumers, or discriminate against patients with chronic illness. Because chronic conditions disproportionately impact communities of color and low-income households, such discriminatory practices could exacerbate disparities. The project will provide data and evidence to further standardize benefit designs to simplify plan choices; minimize the use of co-insurance; track problems that result from excessive cost sharing or poorly designed transparency initiatives or wellness programs; and support consumer-friendly VBDs such as lower cost sharing for clinically proven medicines.

Medi-Cal Reforms To Focus on Equity, Population Health, and Consumer Engagement

Communities of color are the overwhelming majority of Medi-Cal beneficiaries, and close to one-third are limited English Proficient (LEP). Diverse communities have a greater incidence of preventable illnesses, and social and environmental factors play a decisive role in determining who gets sick, who gets care, and who benefits from treatment. As the single largest purchaser in the state, Medi-Cal should be a model for reducing disparities through data collection and meaningful use of data; population health measures, and a patient-centered medical home model of care. Through the 1115 waiver process, our efforts will translate to better health care and health outcomes for Medi-Cal enrollees. Additionally, just as the last Medi-Cal waiver, “Bridge to Reform,” connected uninsured patients to a medical home before the Medi-Cal expansion, our goal is for the new waiver to facilitate access to comprehensive care for the remaining uninsured.

In California, we have made important commitments to covering all uninsured Californians, including immigrants who are left out of the ACA altogether–or to groups whose health status calls for stronger consumer protections than were codified in the ACA. Beyond those commitments, we have many worthy uses for our health care dollars—issues not addressed in the final budget signed last month by Gov. Brown like reimbursement rates and restorations of service like full adult dental services or audiology. Thus each time we are reminded of the estimated 30-50% of health care spending that is wasteful, harmful or of no value to patients, we affirm our resolve to go after that waste and improve efficiencies in ways that benefit patients, starting with those who stand to benefit the most from a more responsive and equitable health care system.