Covered California Announces Initial Results of Its Quality Transformation Initiative Aimed at Improving Health Care Disparities Across the State

SACRAMENTO, Calif. - Covered California announced the first-year results of its first-in-the nation health plan accountability program, the Quality Transformation Initiative(QTI), today at its board meeting.

The QTI - aimed at improving health care outcomes and reducing disparities for members - was created with input from consumer advocates, health care providers and health insurance companies. It was developed in collaboration with the Department of Health Care Services and CalPERS.

The QTI establishes direct and substantial financial incentives (up to 1 percent of premium in the first year, rising to 4 percent of premium in future years) for all Covered California health insurance companies by requiring payments for failing to meet specified benchmarks for a focused, meaningful set of health-outcome measures. These equity-centered outcome measures include blood pressure and diabetes control, colorectal cancer screening and childhood immunizations.

Nearly all qualified health plan issuers saw improvement year over year in these categories in the first year of the Quality Transformation Initiative. These improvements translate to important health outcomes for Covered California enrollees: more enrollees receiving recommended cancer screenings, more children being vaccinated and more Californians able to manage their chronic conditions. Despite these improvements, Covered California will collect over $15 million from health insurance companies for not delivering the level of outcomes that the Quality Transformation Initiative holds them accountable for. These dollars will be invested back into Covered California enrollees through targeted population health investments in 2025.

"We are extremely proud of this first-in-the nation program designed to hold health plans accountable, so that Californians can get the equitable health care they all deserve," said Dr. Monica Soni, chief medical officer of Covered California and leader of the program's implementation team. "We wanted to select a small set of measures with high clinical impact to improve health outcomes for as many Californians as possible."

Figure 1: First Year of Quality Transformation Initiative Leads to Health Screening Improvements[1]

Image available in PDF.

Covered California health plans delivered the most significant improvements for measures of chronic-condition management, with 12 of 13 issuers increasing the percentage of members controlling their high blood pressure and managing their diabetes. Overall, diabetes management improved 6 percent on average, while blood pressure control improved by 12 percent on average. Blood pressure was chosen as it is a key risk factor for cardiovascular disease (heart attacks and strokes), which is the leading cause of death in the United States. Additionally, 50 percent of Californians have diabetes or pre-diabetes, so it is a major health concern across all demographics in the state.

Ten of 13 health insurance companies also increased the rate of colorectal cancer screening among their members, at an average increase of 12 percent. Cancer is the second leading cause of death after heart disease in the United States, and colorectal cancer is the second leading cause of cancer death after lung cancer.

While some health insurance companies did improve their childhood vaccination rates, there was an average decline across the marketplace that is indicative of broader national trends in vaccination. "Childhood immunizations have decreased in the past five years, a trend that needs to be reversed and an outcome that Covered California will remain focused on," said Dr. Soni. Childhood immunizations prevent up to 10.5 million diseases annually and for every $1 spent on immunizations, there can be as much as $29 in health care savings.

"The Quality Transformation Initiative is another example of California building upon the Affordable Care Act and making sure health care is equitable across the state," said Covered California Executive Director Jessica Altman. "We want to thank our partners at DHCS and CalPERS for working with us to hold our health plan issuers accountable and make care equitable in California."

Figure 2: Performance Increases Across All Subpopulations for Diabetes and Blood Pressure Control

Image available in PDF.

For plan year 2024, up to 2 percent of premium is at risk under the Quality Transformation Initiative and may increase to up to 3 percent of premium for plan year 2025. With the rising level of financial accountability, Covered California's health insurance companies will continue to make critical investments to improve health care outcomes for their members.

"These performance improvements are exactly what we had hoped for when creating the Quality Transformation Initiative," Dr. Soni said. "We are optimistic the qualified health plan issuers will continue to improve each year and ultimately that all Californians will get the care they deserve."

Figure 3: Qualified Health Plan Issuers Participating in the Quality Transformation Initiative[2]

PY2023	PY2024	PY2025	PY2026
Anthem	Anthem	Aetna	Aetna
Blue Shield of California	Blue Shield of California	Anthem	Anthem
Balance by CCHP	Balance by CCHP	Blue Shield of California	Blue Shield of California
Health Net	Health Net	Balance by CCHP	Balance by CCHP
Kaiser Permanente	Kaiser Permanente	Health Net	Health Net
LA Care	LA Care	Kaiser Permanente	Inland Empire Health Plan
Molina Healthcare	Molina Healthcare	LA Care	Kaiser Permanente
Sharp Health Plan	Sharp Health Plan	Molina Healthcare	LA Care
Valley Health Plan	Valley Health Plan	Sharp Health Plan	Molina Healthcare
Western Health Advantage	Western Health Advantage	Valley Health Plan	Sharp Health Plan
		Western Health Advantage	Valley Health Plan
			Western Health Advantage

About Covered California

Covered California is the state's health insurance marketplace, where Californians can find affordable, high-quality insurance from top insurance companies. Covered California is the only place where individuals who qualify can get financial assistance on a sliding scale to reduce premium costs. Consumers can then compare health insurance plans and choose the plan that works best for their health needs and budget. Depending on their income, some consumers may qualify for the low-cost or no-cost Medi-Cal program.

Covered California is an independent part of the state government whose job is to make the health insurance marketplace work for California's consumers. It is overseen by a five-member board appointed by the governor and the Legislature. For more information about Covered California, please visit www.CoveredCA.com.

[1] Comparison of 2022 to 2023 quality-rating system performance.

[2] Participating means that they are subject to the program and assessments, not necessarily that they owe any funds.

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