Think Tank

What Can California Learn From Healthy San Francisco?

A new study suggests that Healthy San Francisco, the country’s first government-sponsored effort to provide health care access to all residents, is working. San Francisco’s previously uninsured residents seem to be getting healthier, and providers are generally satisfied with the program and intend to continue participating.

Lessons learned in the first move toward universal coverage might help inform efforts to prepare for national reform, according to the study by Mathematica Policy Research, “Evaluation of Healthy San Francisco.”  

Since the program launched in 2007, non-urgent emergency department visits and hospitalizations are dropping in San Francisco (as they continue to rise elsewhere in the state), and a centralized system has helped the program keep tabs on the city’s uninsured population.

Healthy San Francisco — which is not an insurance program but a subsidized system providing access to care for the uninsured — “has helped San Francisco prepare for health reform in several important ways,” according to Mathematica researchers.

Can state, county and city policymakers apply lessons learned in the Healthy San Francisco program to help the rest of California make the most of health care reform?

We got responses from:

San Francisco Clearly on Right Track

At the National Academy for State Health Policy, and the online network that I lead, we help state health policy leaders and doers learn from each other and spread successful policies and programs from one state to the next. California can certainly learn from other states as it works to implement health reform. However, as an enormous state with a robust history of experimentation within its borders, California leaders also should remember to look inward, at programs like Healthy San Francisco.

Healthy San Francisco clearly is on the right track. In a short time, just four years, the program has enrolled nearly 100,000 people and retained a majority of them; increased access to preventive care; reduced emergency department use and hospital stays; and improved patient satisfaction. In the complicated world of health care reform, these are very positive results in a short amount of time.

Healthy San Francisco is successful because it built on already existing systems and infrastructure. For example, the program didn’t try to create a new eligibility and enrollment system from scratch. Instead, officials built off One-e-App, an existing and commercially available Web-based enrollment product that had been effective in enrolling participants into a range of local and state health and social service programs. Similarly, the San Francisco program didn’t try to create a new care delivery system, but built off existing medical home initiatives. Healthy San Francisco also took advantage of a growing health information technology infrastructure. It used an existing electronic specialty care referral system and built off patient information shared electronically through a longstanding electronic clinical repository of test results, notes and discharge summaries.

California leaders would be wise to do what Healthy San Francisco did: look carefully at the best programs within its borders and use health reform as an opportunity to build on them and bring them to scale. California should take an inventory of the most successful programs, systems and infrastructure in both the public and private sector, and consider ways to grow them. The state also should identify the talented individuals who develop and run these programs at the local level or in the private sector and involve them in the health reform implementation process at the state level.

Programs like Healthy San Francisco and the people who create and run them can help California make the most of health reform by building on a record of success.

Lessons in Four Specific Areas

While the Affordable Care Act will greatly expand health insurance coverage, some individuals will remain uninsured, including undocumented immigrants and individuals who are excluded from the mandates to secure coverage. Healthy San Francisco offers some important lessons for other communities looking to expand access.

  • Coordinating enrollment. A coordinated system for identifying the uninsured and tracking where they are getting care allows access problems and other supply-side concerns to be addressed more effectively. At a minimum, the system would produce an accurate count of uninsured individuals and a snapshot of their health care use; at its best, it would provide a means to connect individuals to a primary care medical home and improved care management.
  • Providing care, not insurance. By leveraging existing resources for the uninsured and organizing the delivery system, HSF was able to expand access to care for existing and newly uninsured adults with less additional funding than would have been required to provide insurance. Communities with good information about the size and health status of their uninsured population will be in a better position to assess whether providing insurance is possible with existing funds.
  • Establishing medical homes. By connecting each person with one medical home and making providers accountable for a set of patients, HSF has demonstrated that it is possible to generate important access and quality improvements for low-income adults. Establishing medical homes for this population may also reduce stress on safety-net providers by allowing them to focus on meeting the needs of a clearly defined panel of patients instead of worrying about limitless demand. HSF’s experience suggests that once providers experience the benefits of the new approach, they are likely to support it.
  • Funding care for the uninsured. Data suggest that encouraging HSF participants to go to their medical homes instead of the emergency department and providing better coordinated primary care resulted in both fewer non-emergent ED visits and fewer potentially avoidable hospitalizations, changes that should save the safety-net system money in the long run. At the same time, the short-term costs of preventive and primary care services may increase. Although HSF sought to use existing resources to make the most of its funding, additional resources were required to cover these new costs.

Each of these strategies improved access to appropriate care. As other communities consider adopting some or all of them, it will be important to be mindful of their separate impacts, as well as their combined effects.

Medi-Cal Pursuing Similar Strategies

The Healthy San Francisco program represents an important innovative and ongoing effort to expand health coverage in California that, on several fronts, aligns with our interests in expanding coverage, controlling costs through better health outcomes, health homes and care coordination, and beneficiary and provider satisfaction. The initiative by San Francisco, coupled with what we’ve undertaken through the state’s Medi-Cal program, will provide important lessons learned for many of the shared goals and results that we are pursuing as we move toward implementing the Affordable Care Act in the Golden State.

Recent studies, including this review of Healthy SF and a Medicaid coverage expansion pilot program in Oregon, have shown that access to health care is beneficial for underserved populations who will enroll and stay in programs like these. These studies indicate that better access and coverage lead to better health outcomes and decreases in preventable emergency department and inpatient stays in hospitals. In short, better care can lower health care costs.

Both Healthy SF and California’s Medi-Cal program are focused on expanding coverage ahead of health care reform implementation in 2014. Through the Low Income Health Program (LIHP) — which is one component of our Medicaid Section 1115 waiver that will bring $10 billion to California over the next five years — the Department of Health Care Services is working with all counties to provide coverage to more individuals who are currently ineligible.

One important aspect of Healthy SF’s program is a focus on a health home that includes a usual point of care and good care coordination, both of which are very important for people with complex health conditions. California is pursuing this goal for its most vulnerable populations, including seniors and persons with disabilities through the current transition to managed care; dual eligibles (Medi-Cal/Medicare) and California Children’s Services beneficiaries through new integration pilot programs; and the Medicaid expansion population through our local LIHPs.

Beyond increased access and better coordination, the findings from focus groups and other sources that beneficiaries like and are more satisfied in Healthy SF are particularly encouraging. An equally important finding is that health care providers have high levels of satisfaction with the program. We will continue to promote coverage through our ACA Medicaid expansion in 2014 and the early expansion local LIHPs, and we will look to Healthy SF and this evaluation for lessons learned as we plan and implement our expansion.

Healthy Employer Environment for Health Reform

Policymakers have much to learn from Healthy San Francisco and its recent evaluation by Mathematica Policy Research. The evaluation found the program is highly regarded by participants and providers, effective at enrolling and retaining residents of San Francisco and able to coordinate care for some of the city’s sickest residents.

Another set of important questions has to do with the law — San Francisco Health Care Security Ordinance — that established the Healthy San Francisco program. Beginning in 2008, the San Francisco Health Care Security Ordinance mandated that firms with more than 20 employees spend a minimum, per-worker-hour amount on health benefits — ranging from $1.17 per hour/employee for firms with 20 to 99 employees to $1.76 per hour/employee for those with 100 or more workers. More stringent than similar provisions in the federal Affordable Care Act, the “pay or play” mandate granted the city’s employers three options:

  1. Paying for employees’ health insurance directly;
  2. Paying into employee medical reimbursement accounts; or
  3. Paying into the city’s Healthy San Francisco public option, which offers heavily subsidized access to care.

Did employer-sponsored insurance offerings and take-up change? Did employers cut workers’ benefits or wages in response to the law’s requirements? By providing some answers to these questions, Healthy San Francisco offers important insights into how employers may react to ACA.   

Studies from the Forum for Health Economics and Policy and the National Bureau of Economic Research — How Do Employers React to a Pay-or-Play Mandate? Early Evidence from San Francisco” and “The Labor Market Impact of Employer Health Benefit Mandates” — that were funded by the Robert Wood Johnson Foundation and conducted by researchers at UC-Berkeley and Dartmouth College shed light on this subject. Researchers found that San Francisco employers who did not offer insurance prior to 2008 were 33 percentage points more likely to report that they planned to begin offering insurance after implementation of the law compared with Bay Area firms who are not subject to the law. Moreover, researchers found that employment and earnings patterns in San Francisco did not change appreciably in the wake of the law’s passage.

This is an encouraging sign for state policymakers around the country who are implementing health reform and have concerns that the new law will cause employers to drop coverage for their employees. It also echoes similar results from Massachusetts’ reform experience, where the rate of employer coverage increased following the law’s implementation. Despite the concerns of many, employers aren’t inclined to make staffing shifts or otherwise adapt their workforce in order to make themselves exempt from such requirements. This bodes well not only for California, but also nationwide as ACA coverage provisions are implemented in the coming years.

Patient-Centered Medical Home Is Key

While disastrous budget cuts to the Medi-Cal program loom over California, a saner and more effective solution — universal access to primary care and a medical home — is proving effective in Healthy San Francisco.

Not a single study shows that cutting health care benefits and barring access to primary care will prevent illness or improve health. The truth, as the recent Mathematica report shows, is that universal access to primary care providers and a medical home provides meaningful improvements to patient well-being and health care costs. With improved access to primary care, non-urgent emergency department visits and hospitalizations drop significantly.

The California Academy of Family Physicians is a leading champion of the patient-centered medical home, the health care delivery model responsible for much of the HSF success. Providing patients with a physician-led primary care team to coordinate their care and help manage and prevent chronic diseases saves money while improving the quality of their care. As documented in the HSF report, patient and provider satisfaction also improve.

CAFP is co-sponsoring legislation promoting patient-centered medical homes in California — SB 393 authored by Sen. Ed Hernandez (D-West Covina), chair of the Senate Health Committee. Improving how we deliver care in the Medi-Cal program is a more humane way to save health care dollars than is eliminating coverage.

Research published by the Patient-Centered Primary Care Collaborative has examined PCMH initiatives involving more than one million patients cared for in thousands of diverse practice settings, covered by both private and public payers nationwide. The findings show that moving to the PCMH model saves money and improves health.

The Medicaid program Community Care of North Carolina, for example, realized savings of $974.5 million over six years, along with a 40% decrease in hospitalizations for asthma and 16% fewer ED visits. The Colorado Medicaid program found that the median annual cost of care for a child was nearly 25% less in the PCMH model than in non-PCMH delivery models. Vulnerable children in Denver with chronic conditions saw their care improve with access to a PCMH, and the state saw the median annual cost of care for those children decrease by 33%.

With the recent Mathmatica study, we have proof of this model’s effectiveness in our own state. It is fiscally irresponsible for state leaders to continue to ignore the growing evidence.

Encouraging Evaluation

Program evaluation can often be a luxury in the government sector where the natural inclination is to prioritize funding for client services over other activities. However, when the San Francisco Department of Public Health implemented Healthy San Francisco more than four years ago, it knew that it would be important to evaluate whether and how the program achieved its goals.

HSF is an effort to improve access to health care for uninsured adult residents. Its goals are to increase access to and satisfaction with care, ensure appropriate utilization of care, and improve quality of care and patient outcomes in a cost-effective manner.

The evaluation took on added significance because HSF is not health insurance. The evaluation had the potential to document the appropriateness and feasibility of non-health insurance models to achieve improved health access. With generous philanthropic support and city and county funding, the department retained Mathematica Policy Research to do an independent evaluation of HSF.

Led by Catherine McLaughlin, the evaluation found, among other things, that: 

  • HSF appears to have enrolled a large portion of working-age uninsured adults in San Francisco;
  • More than 85% of HSF enrollees remain in the program for at least 12 months, and more than half (56%) of these participants renew enrollment at the first opportunity;
  • In general, HSF participants were satisfied with their access to needed health care services;
  • Among those enrolled for at least 12 continuous months, 80% received at least one service;
  • HSF participants show steadily declining ED use over time; and
  • Most participants with ED visits or inpatient admissions received prompt outpatient follow-up.

These encouraging evaluation findings give credence to the tremendous effort undertaken by San Francisco providers to develop a more coordinated health care delivery system for uninsured adults focused on health access, not health insurance. Working together, public and private providers have made improvements in the traditional safety-net system of care – improvements that also will serve patients and providers well as we tackle health reform implementation.

The Public Health Department has and will continue to use the HSF evaluation findings as an opportunity to identify any potential program modifications. We’ve always known that health care delivery is local. The HSF evaluation documented the extent to which a local community can implement positive changes in their delivery systems and simultaneously position itself for federal health reform.