To qualify for the incentive funds under the new program, Santa Clara Valley developed a five-year plan with 267 specific milestones to measure improvements in patient safety and clinical outcomes, preventive health, expansion of capacity in outpatient clinics and chronic-disease management, among others. Payments from the funds will be based on how well the hospital meets its goals. Between $115 million and $147.5 million in matching funds is at stake each year.
“We are in a different era as far as healthcare and how the money will be parceled out,” says Santa Clara County Supervisor Liz Kniss, also chairwoman of the county board's health and hospitals committee.
The overall intent of the hospital's improvement plan is to move from a focus on treating episodes of acute illness to managing patients' overall health. It is a huge undertaking for a public hospital: “We think about one-third of our patients fall into our system or leave our system based on their insurance status in a given year,” says Linda Smith, CEO of Santa Clara Valley Medical Center.
Meeting the performance goals for the at-risk funding is crucial because the majority of the hospital's patients are on government-sponsored insurance. The payer mix in 2010 was 47% Medicaid, 11% managed-care Medicaid, 16% Medicare, 15% commercial insurance and 11% ability to pay or uninsured.
Overall, the public hospital cared for nearly a quarter, or 22%, of Santa Clara County's residents in 2010, logging 116,746 inpatient days and 824,594 outpatient visits. (Other county residents went to private providers, which include Kaiser Permanente, Stanford Hospital & Clinics, HCA and the Daughters of Charity Health System.)