What is the California Health Care Coalition (CHCC)?

The California Health Care Coalition a growing alliance of unions, health and welfare trust funds and employers dedicated to implementing effective solutions to the health care cost crisis and the adverse pressure it places on profits, wages and retirement funds, health access, and quality of care. Our goal is to achieve maximum value for health care dollars by holding hospitals, physicians and health plans accountable for care that is appropriate, high quality and efficient.

Who governs CHCC?

Incorporated as a California public benefit membership organization, CHCC is governed by a 16-member board of directors, with eight of these directors representing labor and eight representing employers. Labor and employer directors are elected at an annual meeting by the voting representatives of CHCC member organizations. The CHCC board meets at least quarterly. Meetings are generally open to all voting representatives and to representatives of eligible organizations considering membership.

Who is eligible to join CHCC?

Any labor organization, employer and/or health care purchasing entity that negotiates for and/or purchases health benefits is eligible to join if it meets any of the following criteria:

· A collective bargaining agreement is in place between management and labor
· A joint labor-management committee (or its equivalent) exists that provides equal participation in health benefits decisions
· No outstanding labor disputes exist at place of employment if neither of the first two criteria apply

Associations of unions, employers and purchasing entities may also join, insofar as all of their individual members meet one of the three qualifying criteria. Health industry organizations such as health plans, insurance carriers, hospitals, and physician organizations are ineligible for membership.

What is CHCC’s program to reduce costs without degrading benefits?

High and rising health costs result largely from provider failures to treat effectively, the over-use of inappropriate or unnecessary treatments, opportunistic pricing by consolidated health plans and providers, and our collective failure as purchasers to demand transparent cost and quality data from those with whom we do business. Unless we address these problems, purchasers and patients alike will continue to be faced with rising bills for health care of uncertain quality.

CHCC is organizing purchasers, statewide and in local health care markets, to adopt a common set of performance standards for the health industry. We seek to leverage our collective purchasing power to address serious system deficiencies that drive up costs for all of us. Here’s our strategy:

1. Build a critical mass of purchasers to demand high quality at fair prices
2. Educate plan members and the broader community about widespread differences in provider costs and quality
3. Establish and apply a common set of performance criteria for health plans and providers
4. Engage in collective, direct negotiations with health plans and providers on the basis of these performance criteria
5. Move our business to health plans and providers that meet our performance criteria and are most willing to work with us to leverage system improvements
6. Promote industry-wide performance standards and information disclosure for purchaser and public benefit.

How can my organization join?

Eligible organizations pay a one-time initiation fee of $10,000, which then entitles them to appoint two voting representatives. These representatives elect the CHCC board. To lower financial barriers to participation, organizations can combine to join as one member. For example, the Los Angeles Unified School District Health Benefits Committee, which has eight member unions, has joined CHCC. Had they joined as individual units, each would have paid $10,000 and each would have had two voting representatives. As it is, they joined as a group. We encourage statewide or large organizations to join on their own and smaller employers, unions and trust funds to join as a group.

What are the benefits of membership?

CHCC organizational members receive a number of benefits. They include:

· The increased leverage that active purchaser collaboration provides to obtain better value from health plans and providers on an on-going basis
· The opportunity to develop and participate in CHCC member-only programs aimed simultaneously at achieving cost savings and reforming industry practices
· Provider performance information, health cost and industry analysis

In what specific communities does CHCC work?

To start, we have targeted five health care markets: Modesto, Sacramento, San Francisco Bay Area, Los Angeles, and San Diego.

Why target providers community by community? Why not challenge the providers with legislation or state-wide strategies?

While every part of California suffers from out of control medical costs and uneven quality, delivery system problems vary from community to community. For example, in some communities, consolidated hospital systems are driving up costs because they have the power to set prices. In other communities, provider failure to effectively treat chronic conditions, such as diabetes or hypertension, results in expensive hospitalizations and treatments later on. In still other communities, an over-supply of hospital beds or medical specialists may drive costly over-use of unnecessary medical services. These and related factors are best addressed by local purchasers banding together to bring pressure upon health plans and local providers to disclose performance information and implement improvements. As for legislation, we have seen reform after reform fail in Sacramento because the health industry has focused, well-financed lobbying influence that health purchasers and consumers do not. We do have our purchasing power, however, and we can begin to use it to compel information disclosure, set price and quality standards, educate our plan participants and the general public about the problems, and use our leverage to drive needed industry and delivery system change.

Is participation in these local efforts contingent on joining CHCC?

No, but we do encourage local participants to join CHCC on their own or in some combination of organizations. Membership growth will send an important signal to health plans and providers about our intention to hold them accountable for performance. It will also expand our capacity to help you and other purchasers in your community identify key local cost drivers, adopt a common negotiating position vis-à-vis health plans and providers, educate plan participants and the general public about the medically unjustified differences in provider quality and costs, and support movement toward those who meet our standards for quality and cost-efficiency. We suggest that smaller entities join CHCC by sector. For example, smaller school districts in one of our five targeted communities could combine to purchase one organizational membership and designate two voting representatives. Similarly, building and construction trades employers could decide to join as a group. The same holds for smaller union locals or trust funds.

If I join CHCC, will my organization lose control over plan design?

No, CHCC members will maintain complete control over their health benefits, from eligibility to plan design to administration. We share information and analyses, we then adopt policies that each member organization can adapt and use to its own advantage. Our strength derives from adopting a common set of performance standards and applying them across the board to health plans and providers with whom we do business. In this way, purchasers set their own co-pays, deductibles and eligibility requirements, while joining with other purchasers to leverage our collective demands for information disclosure and performance improvements.

Can I participate in CHCC if my organization participates in CalPERS?

Yes, and we urge you to do so. CalPERS is a single purchaser that seeks reform through partnership with their three health plans, Kaiser Permanente, Blue Shield and Blue Cross. Aside from Kaiser, however, the health plans lack critical mass at the local level to bring about effective local reform. They are spread too thin across the state and providers have consolidated into larger and larger systems. As a result, health plans’ primary response to rising health costs has been to raise premium rates, offer high deductible insurance products to stem enrollment declines, or both. CHCC’s goal is to build a critical mass of purchasers, community by community, with sufficient market power to compel information disclosure by consolidated providers and to set and apply price and quality standards. So, please join us. We need every employer, every union, and every consumer working with us to build effective local pressure on providers in our communities. In the long run, informed purchasers and consumers working together will have a far greater impact on health care costs and quality than the health plans themselves.