CHA News Article

Report Outlines Road Map for Managing Cost of Care

The California HealthCare Foundation (CHCF) has released a report that examines renewed efforts by health care organizations to manage the cost and quality of patient care, largely driven by implementation of the Affordable Care Act, including the influx of newly insured Californians through Covered California and the Medi-Cal expansion. The California Quality Collaborative interviewed top-performing health care organizations to identify best practices for managing total cost of care. The project sought to identify replicable patient management strategies that effectively reduce unnecessary services while improving the quality of patient care.

The health care organizations interviewed offered valuable insights into how they managed the cost of care. In summary, a roadmap emerged for provider organizations interested in sharpening their own focus on the cost side of the value equation:

  • Assess the cultural and leadership foundation of your health care organization. Successful organizations shared common cultural attributes driven by the organization leadership.
  • Pick a strategy: primary care based or organizationally based. Organizations face a major strategic decision about whether to organize programs and resources within primary care practices and assign accountability at the local level (primary care based) or to collaborate with primary care practices and assign accountability centrally or regionally for program execution (organizationally based).
  • Initially, target inpatient and facility costs. Successful programs provided many examples aimed at reducing per-member costs, often measured by surrogate measures of cost, such as hospital days per 1,000 enrollees.
  • Make sure the organizational foundation for this work is sound. Based on the diversity of provider organizations reporting success, any organization appears capable of addressing cost of care. The common element appears to be the foundation from which an organization begins the work — whether the leadership is committed to, and the culture supports, a shift from volume to value.

The full report is available on the CHCF website.

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