Safety Net Integration – Can it Happen Here?

July 8, 2013

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The ACA requires and rewards integration of services. Accountable care organizations, bundled payments, pay for performance, penalties for excessive hospital readmissions and patient centered medical homes are examples. In California, Kaiser is the best (and only remaining) model of fully integrated delivery system.


Safety nets in Alameda County have had the closest working relationships. Safety nets in Humboldt, San Mateo, Contra Costa, Napa, San Diego, and Los Angeles have been making excellent progress in coordinating care and service delivery.[1]  In some counties, physical and behavioral health providers are also improving their working relationships through co-location and joint planning.[2]


Integration requires a strong partnership among the clinics, safety net hospitals and safety net plans. It requires both financing integration and service delivery integration. The progress to date has centered primarily on the development of competitive local health plans,[3] the development of LIHPs and DSRIPs[4], and service coordination[5] among some aspects of the safety net.


The trend towards safety net integration could be accelerated through the pilot programs for the dual eligibles (Medi-Medis), the Medicaid expansion for the MIAs, and the Exchange (Covered California).

  • Improving care for the duals is going to require very careful coordination of care for a population with far higher levels of medical need.[6]
  • The Medicaid expansion will challenge local safety nets in several respects. First, the safety nets must compete with the private sector for the allegiance and customer satisfaction of their existing and new patients.[7] Second, local safety nets must compete on price, as the Medicaid managed care plans and ultimately the state and federal governments are going to be concerned with the comparative value and health outcomes of local provider networks.[8]  Third, they will need to coordinate the delivery of care for Medi-Cal and remaining uninsured populations within a shift in revenues.[9]
  • The Exchange will offer their customers an apples-to-apples comparison of plans and providers. Due to the structure of premium subsidies the lowest priced and second lowest priced plans are likely to see the lion’s share of enrollment.[10] If the safety net plans and providers cannot demonstrate “value” in the Exchange, they are unlikely to see a significant share of enrollment.
  • Bridge plans are available as an additional option for local safety nets to compete in the Exchange.[11] This is an excellent alternative for local safety nets that are leery of full-scale participation in the Exchange and permits them to serve the uninsured population subgroups with whom they are most familiar.


While some safety nets, particularly the clinics, compete effectively, others have had challenges in the pioneer programs of the Massachusetts Health Connector.[12] Now is the time for each of California’s local safety net components to assess how to improve their integration and effectiveness. The first steps are outreach, education and enrollment of their patients. The second needs to be improved coordination with their partners. And the third, the least developed and most vital for the future, has to be financial integration[13] and improved efficiency.

[1] Wulsin, Driscoll and Cohen, 1115 Waiver Implementation (ITUP, January 2012) at

[2] Gupta, Integrating Medical Care with Mental Health and Substance Use Disorder Services: A Status Report (ITUP, October 10, 2012) at

[3] Tuttle and Wulsin, California’s Safety Nets and the Need to Improve Local Collaboration: Counties, Clinics, Hospitals and Local Managed Care Plans (ITUP, October 2008) at

[4] 1115 Waiver Implementation (ITUP, January 2012)

[5] Ibid.

[6] See Dual Eligibles Coordinated Care Demonstration – Cal MediConnect, Medi-Cal’s Coordinated Care Initiative Population, Combined Medi-Cal and Medicare Cost, Utilization and Disease Burden (DHCS, November 2012) at

[7] While it is true that in some counties, pregnant women migrated from the public sector to the private sector, this is not the case with Medi-Cal managed care, and indeed the community clinics have experienced a phenomenal (nearly 72%) growth in Medi-Cal managed care patients over the past 6 years. See Wulsin and Yoo, California’s Free and Community Clinics, 2008-2011 OSHPD Data (ITUP, April 2013) at

[8] Community clinics and public hospitals are somewhat insulated from competing on price in Medi-Cal managed care due to their subsidies through PPS and DSH; however, these pricing advantages are not going to insulate them from a look at utilization patterns. To the extent that clinics are achieving reductions in avoidable hospitalizations and emergency room use, they will be valued partners.

[9] Safety net hospitals are facing reductions in federal DSH and state health realignment funds due to the anticipated, but as yet unrealized, growth in fully funded coverage of California’s uninsured. See Gupta and Yoo, Proving Care to the Residually Uninsured in a Post Reform World (ITUP, July 2012) at and Connolly, Redefining the Relationship between California’s State and County Governments: Creating Healthier Communities through Innovative Collaboration and Financing (ITUP, April 2013) at:

[10] See, Wulsin, Covered California Releases its List of Plans and Rates for 2014 (ITUP, May, 2013) Individuals choosing the lower priced bronze and silver plans will receive a substantial price discount compared to those choosing the plans with higher premiums. There is a concern on the part of some county and community clinics that their full PPS rates may make them less attractive partners for the most competitively priced plans.

[11] Medi-Cal managed care bridge plans will offer coverage for the parents of Medi-Cal eligible children and those who lose Medi-Cal due to an increase in income (i.e. over 133% but under 250% of FPL).  See SB 3 X1 (Hernandez) Bridge plans must meet a higher medical loss ratio of 85% and offer coverage that is less costly than the lowest priced silver plan.

[12] Jennifer Daley, What’s Happening in Massachusetts: Lessons from the Front Lines of Healthcare Reform at

[13] The siloed funding streams of the past will give way to the pay for performance incentives inherent in the Accountable Care Organizations of the future.