Covered California Starts Innovative Program to Improve Population Health

By Claudia Boyd-Barrett. Originally published in The CHCF Blog on December 4, 2024.

CHLPI’s Erika Hanson was quoted in this article.

In 2023, officials with the state’s health insurance marketplace, Covered California, faced a welcome but challenging dilemma: How might they invest a new revenue stream to improve the overall health of the 1.8 million Californians enrolled in the exchange’s health plans? 

The available money — which totaled about $15 million in 2024 — is the byproduct of Covered California’s new Quality Transformation Initiative (QTI). It requires insurers selling health plans on the exchange to meet minimum quality and equity benchmarks for high blood pressure and diabetes treatment, colorectal cancer screenings, and children’s vaccinations. Plans that fall short of the benchmarks must pay financial penalties to Covered California. These increase over time if the plans continue to underperform.  

Health plans, which participated in the QTI’s creation, had assumed the penalty money would return to them in some other form, said Monica Soni, MD, Covered California’s chief medical officer. But as she and other department officials discussed what to do with the funds in early 2023, alternate ideas emerged.  

“It was pretty out of the box to say, I don’t know, can we just give it back to the people?” said Soni. “Or could we give it to primary care providers? Or should we build parks? We really started from spaghetti-on-the-wall style.” 

Reinvesting Population Health Funds

The project that emerged over the next 16 months was an innovation in the world of health insurance. Covered California will take money from fines levied against health insurance companies and give it directly to their members in the form of debit cards to purchase food and financial incentives for completing childhood vaccinations. Some money will be given to medical providers serving Covered California plan enrollees to help them modernize and better serve their patients.  

These distributions, called Population Health Investments or PopHI (pronounced “poppy”), aim to tackle underlying social and structural problems that contribute to poor health. Funds will be deployed starting in February 2025.  

“We know that we are severely underinvesting in population health and the provision of social services across California,” said Kristof Stremikis, MPP, MPH, director of market analysis and insight for the California Health Care Foundation. Stremikis served on the independent panel that advised Covered California on where to direct the QTI money. “This generates, in a way that is unique, some additional resources that can help address important, underfunded public health priorities in the state,” he said. 

Read the full article.