Many Routes to the Top: Efforts to Improve Care Quality, Coordination, and Costs Through Provider Collaborations

In response to the federal Patient Protection and Affordable Care Act of 2010 (ACA) and a combination of broader market forces, hospitals, physicians, and other health care providers around the country have been increasingly collaborating among themselves and with public and private payers on efforts to reform care delivery systems and payment methods. While their structures vary widely, most of these initiatives share the overarching aims of slowing the growth of health care spending and improving the coordination and quality of patient care. California providers have been particularly active in developing collaborations with other providers and with commercial health plans. Many of these provider partnerships have been driven in part by key market factors characteristic of many California communities — most notably the presence of large providers experienced in managing financial risk for patient care, as well as competitive pressure on both insurers and providers from the growing dominance of Kaiser Permanente’s integrated delivery system and health plan. The California Health Care Foundation’s longitudinal Regional Markets Study of seven California health care markets provided a unique opportunity to track the development of collaborative relationships that hospital and physician organizations have formed in the state over the past several years. This paper describes major types of provider collaborations that have proliferated in California since 2013, highlights leading examples from the seven regions studied, discusses providers’ key goals and strategies, and explores how market conditions spurred each major type of partnership and influenced their structure. The analysis also considers some of the key effects that these collaborations might have on cost, quality, and access to care in local health care markets. The intent of the paper is not to provide an exhaustive catalog of all collaborations undertaken by providers; instead, the focus is on those initiatives highlighted by hospital and physician executives, as well as market observers, as particularly important to the overall strategies and objectives of provider organizations. The focus of this paper is on collaborations formed by mainstream health care providers — those that serve large populations of commercial and Medicare patients.