Across the country, growth in health care spending continues to outstrip economic growth, while at the same time the quality of care delivered is not commensurate with its high cost. Against this backdrop, both private and public payers are searching for ways to reduce costs and increase quality in health care. Several of these entities are focusing on new methods of payment, as there is widespread acknowledgement that many current provider payment methods provide incentives for volume rather than value and do not reward quality improvement. Implementing new payment methods requires a high degree of collaboration between hospitals, physicians, and payers – a challenge for entities whose interests have traditionally been at odds. Large-scale payment reform also necessitates some level of cooperation across payers, so that providers do not face multiple, potentially competing, reporting requirements and incentives that complicate the delivery of care. Despite the challenges, payment reform is underway in California, with multiple examples of long-running and novel efforts to encourage the delivery of high-value health care.

This briefing will provide an overview of payment reform initiatives that are underway in California. Speakers will describe both statewide and local initiatives to provide incentives for the delivery of high-quality, lower-cost care, including an accountable care organization (ACO) set up to care for CalPERS members in the Sacramento region. Policy recommendations related to engaging in cross-sector payment reform efforts and designing payment structures that reward both cost reduction and quality improvement will also be discussed.

Confirmed speakers are:

Suzanne Delbanco, PhD, Executive Director, Catalyst for Payment Reform (facilitator)
Cheryl Damberg, PhD, Senior Policy Researcher, RAND Corporation
Steve McDermott, CEO, Hill Physicians Medical Group
Tom Williams, DrPH, MBA, Executive Director, Integrated Healthcare Association (IHA)
Dolores Yanagihara, MPH, Pay for Performance Program Director, IHA

Funding for the California Health Policy Forum is provided by grants from the California HealthCare Foundation and The California Wellness Foundation.