Sacramento: Health Providers Collaborate and Weather Economic Downturn

Sacramento: Health Providers Collaborate and Weather Economic Downturn

Community Report | By the Center for Studying Health System Change

Sacramento's health care market demonstrated how provider collaboration and a tradition of managed care could help a community weather economic turbulence. Despite the severe recession and California's deep state budget cuts, Sacramento's health care system maintained relative stability, drawing on strong relationships between health plans and provider organizations that had been built over decades of managed care experience.

Managed Care Tradition Provides Foundation

Sacramento had long been one of California's strongest managed care markets, with high HMO penetration rates and well-established relationships between health plans and medical groups. Kaiser Permanente, the largest integrated health plan in the market, served as an anchor for the managed care model. Other plans, including Health Net and Blue Shield, maintained active managed care products that competed with Kaiser on both price and quality. This competitive environment, though concentrated among relatively few major players, had fostered a culture of collaboration between plans and providers that proved valuable during economic stress.

Recession Impacts on Coverage and Access

The economic downturn affected Sacramento in ways familiar across the country: rising unemployment reduced employer-sponsored coverage, the number of uninsured residents grew, and state budget cuts threatened public insurance programs. Sacramento's large state government workforce provided some economic buffer, but the housing crisis hit the region hard, with many families losing both their homes and their financial stability.

Provider Collaboration Sustains Services

What distinguished Sacramento from many other communities was the degree to which health care providers worked together to maintain services during the downturn. Safety net providers coordinated referrals and shared resources. Community health centers expanded hours and locations to serve growing numbers of uninsured patients. Hospitals that had built collaborative relationships with physician groups during the managed care era leveraged those connections to manage costs without dramatically reducing services.

The Sacramento market's experience suggested that communities with a history of managed care -- and the organizational infrastructure and collaborative relationships it fostered -- were better positioned to adapt to economic disruption than communities where providers operated more independently. The managed care legacy gave Sacramento's health care organizations experience in coordination, resource management and quality improvement that proved useful well beyond the managed care context.

Sources and Further Reading

This report was published by the Center for Studying Health System Change as part of the Community Tracking Study, funded by the Robert Wood Johnson Foundation.