Strategic Approach

California’s health industry delivers uneven and frequently sub-standard care and is among the most expensive in the world. Wide, medically unwarranted variation exists in the appropriateness, quality and cost of hospital and physician care. Provider prices also vary dramatically and without regard to the quality of care provided..

Despite these variations, purchasers and patients lack even the most basic comparative information on provider performance. As the number of uninsured and under-insured grows and cuts are made in public health programs, purchasers spend billions of dollars on care that too often is ineffective, delayed, inappropriate and over-priced.

CHCC organizes group purchasers to engage selected health plans, hospitals and physician organizations in collaborative efforts to improve the safety, appropriateness, effectiveness and price of health care services.

Group purchasers of health care need and are entitled to know:

• Which physicians achieve better outcomes for their patients;

• Which hospitals have lower than expected mortality and complication rates;

• Why such wide variations in health care utilization exist among similar populations;

• How much hospitals and physicians get paid for their services.

Alone, purchasers do not have enough market power to require performance disclosure by health plans or providers. But together, we can obtain performance information, inform plan members which providers offer the best care for their particular medical conditions and negotiate performance-based contracts with health plans, hospitals and medical groups that achieve specific performance improvements. Furthermore, they can do so with no loss of autonomy over the design of their own health plans.

CHCC offers an important vehicle for building purchaser strength in the marketplace. We are the only labor-management nonprofit coalition in California organized to address the structural problems in California’s health care industry that dramatically inflate costs for everybody.

CHCC strategies, which do not require members to give up control over the design of their health plan benefits, are based on the following:

1. Health costs are essentially a function of the volume of services used times the price of those services;

2. Price and service utilization vary widely from provider to provider and community to community. This variation, which is often medically unjustified, reflects the treatment preferences and business decisions of local providers;

3. Health costs can be controlled at the community level when group health care purchasers work together to require performance data and use it to drive continuous improvements in appropriateness, quality, efficiency and price.