Incentive Plan Working for Public Hospitals

A big component of the federal Medicaid waiver California officials negotiated last year was the provision to set up an incentive program to redesign systems and improve quality in public hospitals.

It’s going well, apparently.

Melissa Stafford Jones of the California Association of Public Hospitals said all the state’s public hospitals “met their milestones.”

That means every one of the 21 public hospitals in the state received a financial reward for hitting quality-improvement goals. Now comes year two.

“July marks the beginning of the second year of the Medicaid waiver,” she said. “It has been an unprecedented opportunity to make real, on-the-ground progress in quality improvements.”

There are markers every year for five years in four different health care improvement categories:

  • Infrastructure development, such as creating disease registries;
  • Redesign of systems, such as developing the medical home model of care;
  • Population-based improvements, such as tracking mammogram rates; and
  • Improving in-house care, such as lowering in-hospital infection rates.

If California public hospitals hit all of their incentive markers every year for five years, they stand to receive $3.3 billion from the federal government.

The first year goals of the program were a little easier to attain and sort of grabbed the low-hanging fruit of reform, Stafford Jones said. She pointed at staffing up to prepare for an expansion of primary care capacity as an example.

“I think what makes the incentive program so important is that it really is about the on-the-ground, roll-up-the-sleeves work of how we deliver care,” Stafford Jones said. “So it’s smarter, better for patients, and they’re a partner in their care. We want to be more efficient, and provide better care in a cost-containment model.”

That’s exactly what national health care reform is trying to accomplish, she said. Really, California’s public hospitals are just doing it a few years ahead of schedule.

“This is what will define success in health care reform,” Stafford Jones said. “It’s going to make the difference for people in the care they receive — to change their health care, but also their health.”

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