The New Health Dialogue

The conversation about consumer choice in health care often revolves around choice of providers. How many doctors are in-network in my insurance plan? Can I choose to keep my doctor if my insurance changes?

These questions are important but may mask the fact that consumers are rarely presented with a choice of insurance carrier. According to the Kaiser Family Foundation, 85 percent of firms do not offer their employees such a option. This number is even higher for small- and medium-sized firms since they can generally negotiate a better deal with their insurance company if they are able to combine all of their employees into a single purchasing pool.

In the relatively rare instances when employees are given a choice of insurer, they frequently choose to plans that contract with integrated health systems.

These plans have a lower price tag and often produce better value to the consumer. Perhaps the preeminent example of a high-value integrated health system here in California is Kaiser Permanente.

Starting next year, California state employees who live in the Sacramento region will be given the opportunity to participate in a pilot program of a new low-cost, high-value plan. This partnership between the California Public Employee Retirement System (CalPERS), Blue Shield of California, Catholic Healthcare West, and Hill Physicians Medical Group will create a new integrated health system. According to CalPERS these groups have "agreed to be at financial risk should the pilot's cost reduction goals fall short of expectations."

This is a risk that is worth taking. As medical spending soars ever higher, integrated health systems offer one of the best opportunities to control costs in ways that increase value for the patient. All of the participants have long records as industry leaders in developing innovative value-promoting strategies. The Commonwealth Fund recently released a report authored by Len Nichols and Tom Emswiler of the New America Foundation that described in detail the steps that Hill Physicians Group has taken to efficiently improve quality within their organization.

Most of the organizations involved in this pilot will be participating in an effort organized by the New America Foundation called the California Task Force on Affordable Care. They will be joined by Kaiser Permanente and a host of other California health care stakeholders. Their goal will be to develop innovative solutions that promote value in health care spending. The specific focus of their work will be on California, but their recommendations will influence the national health reform effort. These deliberations will be guided by the input of a panel of leading health policy experts who met in early April in Sacramento to identify the most important actions that state regulators, legislators, insurers, and providers can take to immediately begin reining in health care costs in the California marketplace.