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2003

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 nation

October 15, 2003

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 care 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 at Berkeley’s 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 IPAs 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% of California medical groups, compared to 46.5% 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% of medical groups received income for quality, compared to 39.8% 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.

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Health Affairs – How Different Is California? A Comparison of U.S. Physician Organizations