CAPH - California Association of Public Hospitals and Health Systems

California's five-year Section 1115 Medicaid Waiver created the Delivery System Reform Incentive Program, a federal pay-for-performance quality improvement initiative that is the first of its kind in the nation in terms of its structure and scope. Through the Incentive Program, 21 public hospital systems are transforming how care is delivered through multiple, simultaneous undertakings that impact every part of their system.

The Incentive Program builds on previous quality improvement efforts and creates opportunities for public hospital systems to dramatically expand them system-wide: outpatient, inpatient, specialty and emergency/trauma settings. Examples of specific Incentive Program projects include: expanding access to primary care and specialty care, implementing patient centered medical homes, increasing availability of diseases registries to proactively manage patients with chronic illnesses, reducing health disparities through new data and population health measures and decreasing hospital based infections. These large-scale efforts embody the principles of health care reform — expanding access to care, enhancing quality, improving population health and containing costs.

Financing for the Incentive Program is based on performance. Public hospital systems receive federal funding if and only if they achieve hundreds of ambitious milestones that measure progress toward intended outcomes. On average, public hospital systems are taking on 15 different projects simultaneously, with 217 milestones. If all milestones are attained, public hospital systems have the opportunity to receive $3.3 billion in federal funding over the 5 year program.