Frequently Asked Questions
What is CHCC?
The California Health Care Coalition is a nonprofit
membership organization bringing employers and unions together to
require California’s health industry to deliver safe, effective,
prevention-oriented, efficient and fairly priced health care. Our
members include 45 public and private sector employers, unions and trust
funds, currently representing 3 million Californians. We believe that
performance transparency and accountability in health care will save
lives, reduce costs and preserve and expand access to affordable
comprehensive benefits for California employers, families and
communities.
What Problems does CHCC
Address?
Poor quality: California ranks 50th in health
care quality, according to a recent Commonwealth Fund report comparing
the states on health system performance. Our “non-system” of health care
delivery has many interacting but uncoordinated parts, with multiple
points at which failure can and does occur. Research shows widespread
under-use of effective care, provider-driven over-use of unwarranted
services, and misuse of services that reflects provider, not patient,
treatment preferences when more than one medically reasonable treatment
option exists. Medical errors are also commonplace, with far too many
patients harmed by institutional, management and organizational failures
to assure patient safety. In short, quality problems are not only
everywhere, as the Institute of Medicine reported in 2001, they are also
disturbingly persistent.
High costs, high prices and misaligned incentives:
Poor quality is tremendously costly. Experts routinely estimate that
30 to 40 percent of health care spending reflects poor quality care.
High prices further add to high costs. As California hospitals and
physicians have consolidated into larger and larger economic units, they
have been able to negotiate significant rate increases without regard to
the quality or efficiency of their services. How we pay for care also
contributes to poor quality. Fee-for-service payment arrangements
encourage provider-driven overuse or misuse of services because
providers get paid more when they deliver more services. They also get
paid more when quality failures result in higher utilization, as is the
case when patients are admitted or readmitted into hospitals for
preventable reasons.
Little performance disclosure or accountability:
Despite decades of alarming statistics, scant progress has been made
toward meaningful improvement in the safety, appropriateness and quality
of care. A major obstacle to reform is the lack of publicly collected
and reported performance data on hospitals and physicians. In
California, we spend tens of billions of dollars annually on health care
services, yet we lack information on which providers in our communities
achieve the best patient outcomes for most medical and surgical
conditions, which are most efficient, what they get paid for their
services and which should be avoided because of consistently
sub-standard performance.
What is CHCC’s Overall
Strategy?
CHCC’s strategy brings employers, unions and trust funds
together at the community level to require performance transparency and
improvement for the billions of dollars our members spend.
Our focus on local purchaser organizing reflects two key
facts. First, health care services are locally delivered, so purchasers
can most rapidly affect the quality and cost of health care when they
organize locally. Second, the purchasing community is highly fragmented,
leaving purchasers without the necessary market influence to require
performance information or improvement. Even the largest purchasers in a
community represent only a tiny fraction of the business of a major
commercial health plan or community provider. CalPERS is a prime
example. It is the second largest purchaser in the country, but its plan
beneficiaries make up only three percent of Sutter Health’s patient
base. It therefore lacks the ability to negotiate with Sutter Health for
quality, efficiency and price improvements.
When CHCC organizes and represents the interests of
multiple employers, trust funds and unions, we can effectively engage
providers on both quality and cost issues. CHCC applied this strategy in
Modesto, where it organized employers and unions representing 60,000
lives out of a residential community of 200,000. With this base, we
successfully negotiated a “Pay for Quality Improvement” program with
Doctors Medical Center, with provisions for joint performance reviews,
joint setting of improvement goals and the best commercial rates for
those who make DMC their preferred provider.
DMC has made strong progress toward meeting the 49
specific and measurable improvement goals we established in the
agreement. For example, while DMC was one of the state’s four worst
facilities for coronary artery bypass graft surgery, today it is among
the best. DMC’s progress confirms that the most rapid improvements occur
when local purchasers join together to require them. When more and more
local employers, trust funds and unions join CHCC, we build our
collective power to hold providers accountable for the consistent
delivery of safe, effective, efficient and fairly priced health care
services.
What Programs and Services
Does CHCC offer?
1. Detailed performance profiles on all general acute
care hospitals in California, including risk-adjusted mortality rates,
infection rates, complication rates, average length of stay, and average
charges for almost all medical and surgical conditions;
2. CHCC-led negotiations with major community hospitals,
hospital systems and medical groups, leading to Pay for Quality
Improvement (PQI) agreements with major community providers serving our
members. Our agreements contain provisions for joint performance
reviews, joint setting of improvement goals and payment arrangements
that reward providers when they meet specific and measurable improvement
goals;
3. CHCC collaboration with Blue Shield of California to
build better HMO and PPO networks in selected areas of California, with
an initial focus on Southern California and the Central Valley. The
collaboration resulted from a year-long negotiations process in which
CHCC met with 4 major health plans to determine which would commit most
strongly to CHCC’s collaboration criteria: joint evaluation and
selection of providers, based on the safety, quality and efficiency of
their care.
4. CHCC negotiation of a model contract with Catalyst Rx
to administer and manage the prescription drug benefits of member
organizations with self-insured pharmacy plans. Our contract –
negotiated on the basis of 3 million lives – is one of the most powerful
tools our members can use to reduce their overall pharmacy costs without
increasing co-pays or deductibles;
Who can join CHCC and how much does
it cost?
Any employer, health care purchasing entity or labor
organization that purchases or negotiates for health benefits can join
CHCC if it meets any one of the three criteria:
-
A collective bargaining agreement is in place
between management and employee organizations;
-
A joint labor-management committee (or its
equivalent) exists that provides equal participation in decisions
about employee health benefit design and cost sharing;
-
No outstanding labor disputes exist, if neither #1 nor #2 apply.
Membership is also open to labor and employer
associations, insofar as all of their individual members meet one of the
criteria set forth for membership. Health plans, insurance carriers,
hospitals, physician organizations or any other type of health industry
organization and/or individuals that finance and/or deliver health care
services and/or products are ineligible for membership.
Annual membership is based on a $1 per member per year basis, with a
minimum dues payment of $2,000 and a maximum dues payment of $10,000.
Because CHCC members include different kinds of organizations, “member,”
for purposes of determining the annual dues, is defined as follows:
-
Employers or Trust Funds – “member” refers to
the total number of lives covered by the health plan;
-
Unions – “member” refers to the total number
of union members;
-
Employer associations or purchaser coalitions
– “member” refers to the total number of covered lives represented
by the associations’ organizational members;
-
Labor associations – “member” refers to the total number of union
members, represented by the associations’ organizational members.
Eligible organizations can also join CHCC as a
group. For example, six small school districts and their bargaining
units in the Sacrament area joined together as the North Sacramento
School District Labor-Management Consortium, with each entity
contributing a portion of the annual membership.
Who governs CHCC and how is CHCC financed?
CHCC is governed by a 16-member labor-management
board of directors who are elected by the voting representatives of our
member organizations. Each member organization appoints two voting
representatives who participate in annual board elections. Voting
representatives can also nominate candidates and run for election to the
board.
CHCC operations are primarily financed through
membership dues. As we grow, we anticipate that additional revenues will
be generated through member voluntary participation in CHCC-developed
programs to promote health, improve quality and lower costs. We have
also pursued grants from philanthropic foundations. However, we strongly
believe that CHCC will be most successful if we remain largely
self-financed. In no case will we accept financial payments or
contributions from any health industry entity we recommend or with which
we negotiate and partner.
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