Berkeley Healthcare Forum

Principle Investigators

Dr. Richard Scheffler, PhD
Dr. Stephen Shortell, PhD


Our nation has embarked on one of the boldest social initiatives in its history: To expand health insurance coverage to nearly all Americans while simultaneously trying to reduce the rate of increase in healthcare spending. The challenge is great everywhere in the country, but especially here in California, due to our state’s large and diverse population and its sizeable number of uninsured residents.

Some social problems are so complex that they cannot be solved by any single firm, industry, sector or government agency acting alone. Instead, they require a partnership and leadership across organizations. Recognizing this, private and public sector leaders in California came together to address the challenge of developing a more affordable and cost-effective healthcare system that would contribute to improved population health for all Californians.

This was the motivation behind the Berkeley Forum for Improving California’s Healthcare Delivery System. The Forum includes the CEOs of six of California’s leading health systems, three health insurers and two large physician organizations, along with the California Secretary of Health and Human Services, the U.S. Department of Health and Human Services Region IX Director and California insurance regulators.[1] The University of California, Berkeley School of Public Health was pleased to serve as a neutral facilitator for discussions and as the analytic staff for this effort. “A New Vision for California’s Healthcare System: Integrated Care with Aligned Financial Incentives” is the result of the collective work of all involved.

This report is based on extensive analysis and careful investigation using multiple data sources (see appendices), in consultation with healthcare experts at both the state and national level. In the pages that follow, we provide a brief history and background of the state’s delivery and payment systems, along with a discussion of the healthcare affordability crisis. We then analyze how seven specific initiatives might reduce healthcare spending relative to the state’s gross domestic product, or bend the “Cost Curve,” defined in this report as the share of Gross State Product (GSP) spent on healthcare. Particular emphasis is paid to the 5% of Californians who routinely account for more than half of the state’s healthcare expenditures. We also assess two specific initiatives aimed at improving the health and healthcare of Californians, one involving increasing physical activity, the other expanding palliative care. And we lay out a vision for California’s future healthcare system that is intended to better align financial incentives and increase care integration.

This document complements Governor Brown’s “Let’s Get Healthy California” report of December, 2012. The Governor’s report established baseline indicators and target goals for assessing the health of Californians in priority areas, along with examples of initiatives. This report provides estimates of the expenditure reductions that can be achieved by pursuing some of those initiatives. To have their maximum impact, the initiatives will require sustained leadership from the healthcare delivery, public health, education, housing, labor, transportation, social services and related sectors, all working together.

The ultimate result of these efforts will be measured by improved affordability and a healthier California. While much is already happening, this report urges accelerated action. We need to reach farther and dig deeper. We all need to put our oars in the water and start rowing in the same direction to make California the healthiest state in the nation at a cost that we can afford. I hope you will engage with the ideas and analyses in this report and think hard about what you will do to move us forward.

Best wishes,

Stephen M. Shortell, Ph.D., MPH, MBA

Chair of the Berkeley Forum for Improving California’s Healthcare Delivery System
Blue Cross of California Distinguished Professor
Dean, School of Public Health
University of California, Berkeley

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Appendix II. California’s Delivery System Integration and Payment Systems (Methodology)

Appendix III. California Cost Curve, Health Expenditures and Premium Projections

Appendix IV. Introduction to Appendices V – XI

Appendix IX. Nurse Practitioners and Physician Assistants (Initiative Memorandum)

Appendix V. Global Budgets, Integrated Care Systems (Initiative Memorandum)

Appendix VI. Patient-Centered Medical Homes (Initiative Memorandum)

Appendix VII. Palliative Care (Initiative Memorandum)

Appendix VIII. Physical Activity (Initiative Memorandum)

Appendix X. Healthcare-Associated Infections (Initiative Memorandum)

Appendix XI. Preterm Births (Initiative Memorandum)

Appendix XII. Assessing California’s Healthcare Spending

Updates to the Berkeley Forum

Proposal to Use Three Initiatives to Lower Healthcare Spending and Finance Universal Health Insurance Coverage in California