FOR IMMEDIATE RELEASE
October 1, 2024
Contact: Madeleine Baudoin Ghorashi, Director
Email: Madeleine_Baudoin@rapadmin.com
Phone: 619-417-6853
Contact: Bill Barcellona, Executive Vice President, Government Affairs
Email: wbarcellona@apg.org
San Diego, CA – California Governor Gavin Newsom signed legislation today ensuring the continuity of an important pilot program that enables California’s school districts to partner directly with medical groups to purchase high-value health care for their workforce. The pilot will now be in place for a full four years, as anticipated in the original California state legislation creating the pilot, AB 1124.
The pilot, an agreement between California Schools VEBA (VEBA) and members of America’s Physician Groups (APG), aims to introduce a value-based payment model designed to reduce overall health care costs while improving the quality of patient outcomes. In the first eight months of the pilot, which launched January 1, 2024, VEBA has already reported $1 million in savings for nearly 5,000 enrollees, demonstrating the potential for even greater cost savings and improved care with this extension.
Both APG and VEBA saluted the pilot’s extension. “America’s Physician Groups applauds the Governor for signing AB 2063, which will allow California to continue exploring innovative payment models that lower health care costs and improve patient outcomes,” said Bill Barcellona, Executive Vice President of Government Affairs for America’s Physician Groups. “VEBA has partnered with top-tier providers in the Western United States, including Sharp Healthcare, Rady Children’s Hospital, and the U.C. San Diego Medical Group and Hospitals. These providers are leaders in health care delivery, and their participation in this pilot further enhances its potential for success.”
“Direct Contracting is groundbreaking,” said Laura Josh, General Manager of California Schools VEBA. “For the first time, California can assess how integrated care and risk-based payments can both lower health care costs and improve performance. This extension is a major milestone in our legislative efforts, and VEBA is proud to lead this first-of-its-kind program, made possible through Assemblymember Brian Maienschein’s leadership. VEBA is confident that the program will drive even greater savings and improve patient care for Californians,” she said.
Data from the Integrated Health Care Association at a recent OHCA Affordability Board meeting highlighted the importance of this pilot. Between the two major coverage models – HMO with capitated-delegated networks and PPO with independent fee-for-service networks – the rate of cost increase was 3.12% versus 9.93%, respectively, over a five-year period prior to the pandemic. This threefold difference highlights the critical need for innovative payment models like those tested in this pilot.
Oversight is provided by the Department of Managed Health Care (DMHC), ensuring patient safety and program success.
The extension provided by AB 2063 ensures that the pilot will have the necessary time to achieve its intended impact.
About California Schools VEBA
For over 30 years, California Schools VEBA (VEBA) has harnessed the collective strength of our members to provide quality, cost-effective health care benefits and resources for public sector employees throughout California. With strong advocacy and equitable services, VEBA administers health care benefits and programs for more than 153,000 members from over 73 employers and school districts. California Schools VEBA is a 501c(9) health care trust, governed by a Board of Directors. VEBA strives for efficient operations and administration of all programs and actively pursues legislative reforms that revolutionize access to health care benefits in groundbreaking ways. Our aim is to help our members, and their families secure effective, high quality, accessible care at a price they can afford. Learn more at www.vebaonline.com.
About America’s Physician Groups
America’s Physician Groups is the nation’s leading professional association representing physician organizations practicing value-based care. Our nearly 350 member organizations across the United States are dedicated to delivering high-quality, affordable care to more than 90 million patients. Through advocacy, education, and support, APG is committed to transforming the future of health care. Learn more at www.apg.org.
