Status, Challenges, and Opportunities of the Delegated Model in California

Calif. J. Politics Policy 2014; 6(2): 237–239 Commentary Jill M. Yegian* and Thomas R. Williams Status, Challenges, and Opportunities of the Delegated Model in California Keywords: commercial insurance; delegated model; fee-for-service; Health Main- tenance Organization; transparency. DOI 10.1515/cjpp-2014-0018 California has long been known as a national leader in integrated medical care and delegating financial risk to provider entities. In recent years, however, the delegated model has been experiencing gradual enrollment decline in Cali- fornia’s commercial HMO and Point-of-Service (POS) market. Although enroll- ment in risk-based Medicare Advantage has been holding steady and managed Medi-Cal enrollment has been growing, shrinking commercial enrollment in risk-based models raises the possibility that California could lose the benefits associated with investment in coordinated care that have been painstakingly gained over the last couple of decades. To illuminate the status and prospects for the delegated model, we review current data on risk-based commercial enroll- ment, reasons for the decline, and opportunities in the current environment. These issues must be addressed if the vision outlined in the Berkeley Forum Report is to be achieved. Data from the Department of Managed Health Care (DMHC) show a decline in the number of commercially-insured Californians enrolled in “risk-based organi- zations,” (physician organizations that contract with health plans) from approxi- mately 5.5 million to under 4 million between 2008 and 2012 (see Figure 1). Of note, DMHC’s definition of risk-based enrollment does not include integrated medical group enrollment, such as Kaiser. In contrast with the decline in com- mercial “risk-based organization” enrollment, Kaiser, which comprises approxi- mately 40% of California’s commercial market, has maintained steady enrollment over the last several years (California HealthCare Foundation 2013). *Corresponding author: Jill M. Yegian, Integrated Healthcare Association, Oakland, CA, USA, e-mail: jyegian@iha.org Thomas R. Williams: Integrated Healthcare Association, Oakland, CA, USA