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delivery system partnership—the “Community Health Network for the Underserved.”  This includes the public system, private hospitals, medical groups and Federally Qualified Health Centers (FQHCs) to assure the full scope of care for more than 100,000 Medi-Cal and uninsured residents of the county, with the Medi-Cal health plan providing management of all of the target patients.

San Francisco has included both its public system and FQHCs and private hospitals in its Healthy San Francisco coverage initiative.

Other communities are looking at restructuring approaches to assuring access to specialty services (a major gap in care for both the uninsured and Medi-Cal patients) or entering into partnerships in the operation of public hospitals (i.e., LA County’s Martin Luther King Hospital).

Change Options

In order to create these new delivery models for underserved populations, counties need to go through a two-part redesign process: 1) becoming as lean and effective as possible within their own systems (whether they are direct service providers or payers); and, 2) reaching out to other providers serving their geographic area to construct networks that address the full continuum of care needed for a defined patient population.  

In building these networks, the counties, or their health systems, can play an important role as honest brokers in bringing providers together to ensure access to the full scope of primary, specialty, diagnostic, inpatient, mental health and long term care services for the medically indigent.  To be successful, networks also must:

Allow all providers come to the table as equals with clear and predictable expectations of what is being asked of them in terms of providing specific services;

Provide services in the most appropriate setting, where the investment in improving service delivery has been made and core competencies already established;

Effectively manage patients to assure appropriate use of services; and

Give providers credit and incentives for their participation.

Counties have shown that with an investment of time and dollars they can improve their delivery systems.  This is being further shown in the current waiver-funded coverage initiatives.  The waiver could look at how to use a part of the waiver funding to improve the delivery of care in these large health care systems and how to restructure Medi-Cal reimbursement to change the program payment incentives.  For example, these networks should be able to be reimbursed for their care management activities.  This type of change in the waiver may be a critical component of receiving more federal funds for safety net hospitals.  


System reform will require an upfront initial investment of funds that in the long term should reduce the cost of health care.  Without action, more County Boards of Supervisors will be faced with the choice of whether to reduce or close public hospitals and clinics.  Closures will further strain an already fragile safety net and increase state general fund cost. For example, shifts of patients from public hospitals to private hospitals will shift the non-federal share of the cost of

Health Management Associates/Harbage ConsultingPage 14

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