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May 10, 2022   |   Press Releases
Better Quality, Lower Costs When Providers and Health Plans Share Financial Risk
Press Release
IHA’s Atlas results map healthcare cost, quality, and utilization across California

OAKLAND, Calif., May 10, 2022 – The Integrated Healthcare Association released the most recent results of its California Regional Healthcare Cost & Quality Atlas, a key statewide source for comparative healthcare performance information. The Atlas uses over two dozen metrics, such as preventive screenings, care for chronic conditions, emergency department visits, and member cost-sharing, to examine performance across a wide range of clinical quality, hospital utilization, insurance type, and cost of care topics.

Health plans, providers, purchasers, policymakers, and consumers can use the Atlas to compare quality and cost of care provided to Californians. The 2020 Atlas results cover nearly 16 million Californians. This includes 14.1 million commercial lives and nearly 2 million Medicare Advantage lives – around 70% of each of these populations.

Users can access the interactive web tool to compare year-over-year results, as well as results across insurance type, regions, and provider risk-sharing categories.

With the Atlas, users can find answers to questions such as:

  • Which type of insurance provides better patient care?
  • How did California’s healthcare performance fare during the first year of the pandemic?
  • What quality and cost of care trends have occurred over the past 5 years?
  • How does quality and cost for Covered California compare to other commercial insurance?
  • How does the region where I live influence the care I receive?

“The onset of the COVID-19 pandemic in 2020 created unprecedented challenges across healthcare. These challenges shined a new light on what our Atlas data has consistently shown us — when health plans and providers share financial risk, patients benefit from coordinated, integrated care that improves outcomes and lowers total cost of care,” says Anna Lee Amarnath, MD, MPH, General Manager of IHA’s Align. Measure. Perform. (AMP) Program. “Atlas is a valuable tool for identifying and reducing discrepancies in healthcare costs and quality, pointing the industry in the right direction toward healthier futures for Californians.”

Consistent with prior years, the results released for 2020 show that better care and lower costs typically result when plans and providers share in the financial risk through a capitation arrangement compared to fee-for-service models. This analysis is based on data from 11 health plans, representing 7.9 million commercial lives cared for under health maintenance organization (HMO), preferred provider organization (PPO), and exclusive provider organization (EPO) products, both fully insured and self-insured.

Sharing financial risk linked to higher clinical quality for commercially insured

  • On average, clinical quality was higher for commercially insured members cared for by providers sharing financial risk. Clinical quality composite rates for providers with full financial risk were 6.2 percentage points higher than providers not sharing risk.
  • If all commercially insured patients in California received care from providers sharing risk:
    • 18,000 more women would have been screened for breast cancer and hundreds of cases might have been diagnosed earlier when cancer is more treatable.
    • 7,000 more Californians with diabetes would have received nephropathy screenings.

Sharing financial risk associated with lower costs to the healthcare system and patients

Total cost of care was 4.9% lower when providers shared financial risk. The trend also held true for medication costs and patient cost-sharing.

  • Pharmacy costs were up to 25% lower for providers sharing risk
  • On average, patients cared for by risk-sharing providers paid $246 per year in out-of-pocket medical costs compared to $636 per year for patients who were not.

About the Integrated Healthcare Association (IHA)

The Integrated Healthcare Association (IHA) brings the healthcare community together to solve industry-wide challenges that stand in the way of high-value care. As a non-profit industry association, we use our decades of expertise, objective data, and unique role as a trusted facilitator to make the healthcare system work better for everyone. We provide insights that help the healthcare system continuously improve. We build new tools that simplify how the industry works together. And we provide a forum for cross-industry leaders – through our boards and programs – to have honest conversations that guide the future of healthcare.

For more information, please visit https://www.iha.org or contact Ashley Burkett at press@iha.org.

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