Better Chronic Illness Management, Incentives For Improved Quality
More Likely Among California Physician Groups

New Analysis Compares Practices At California Medical Groups
With Counterparts In The Rest Of The Country

BETHESDA, Md.—Physician organizations in California are more likely than their counterparts outside the state to be paid for improving health care quality, and are more likely to follow case management or similar practices for treating chronically ill patients, according to a new report published today.

The wider application of care management processes by California's medical groups and independent practice associations (IPAs) may be linked to the more frequent use of financial performance tools, other external incentives for improving quality, and increasing investment in clinical information technology, according to the report published by Health Affairs with funding from the California HealthCare Foundation.

Robin R. Gillies, a project director in the Department of Health Policy and Management in the University of California, Berkeley, School of Public Health, and four colleagues analyzed data from a national survey of the chief executive officers (primarily physician leaders) at more than 1,100 physician organizations with more than 20 physicians. The survey consisted of structured interviews with the CEOs. Nearly one-fifth of the physician organizations studied were in California.

The authors singled out California for study because its health care delivery system is believed to be unique. This study shows that California has more and larger physician organizations. In addition, the organizations are more likely to be IPAs, take on more risk, and are delegated more responsibility for managing care than physician organizations in other states.

To improve quality, California medical groups are more likely to employ special hospitalist physicians to coordinate the care of their hospital patients: 65.3 percent of California medical groups, compared to 46.5 percent of non-California medical groups. California medical groups also employ case management for chronically ill patients more often and use preventive tools to reduce hospitalization among patients with diabetes, asthma, and congestive heart failure.

According to the study, California physician organizations had greater incentives to use quality improvement tools. Insurers were more likely to pay California medical groups on the basis of quality, as well as publicly report outcomes data and the results of continuous quality improvement initiatives. In California, 53.3 percent of medical groups received income for quality, compared to 39.8 percent of non-California medical groups.

While health care delivery varies from market to market, the authors contend that medical groups in other parts of the country can benefit from the California experience.
"The data indicating that California physician organizations use more recommended care management processes for patients with chronic illnesses while operating within a stringent managed care environment suggests that others could adopt such processes, even amid renewed emphasis on containing costs," Gillies says. "The California performance findings as well as the national data suggest that payment policies designed to reward physician organizations for improved quality, public reporting of quality performance, and arrangements for increasing investment in and use of clinical information technology in care delivery could move the system in desired directions," she says.

Gillies' coauthors were Stephen M. Shortell, dean of the UC Berkeley School of Public Health; Lawrence Casalino, assistant professor in the Medical School at the University of Chicago; and James C. Robinson and Thomas Rundall, professors in the UC Berkeley Public Health School's Department of Health Policy and Management.

The Robert Wood Johnson Foundation also supported the article.

Health Affairs, published by Project HOPE, is a bimonthly multidisciplinary journal devoted to publishing the leading edge in health policy thought and research.

The California HealthCare Foundation (CHCF) is an independent philanthropy committed to improving California's health care delivery and financing systems. For more information, visit www.chcf.org.

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©2003 Project HOPE–The People-to-People Health Foundation, Inc.