UCLA Center for Health Policy Research

California has 12 county-owned and operated hospital systems and 5 University of California hospitals designated as public hospitals. These organizations deliver the majority of inpatient care and a significant amount of outpatient care to Medicaid patients in the state. In 2010, California was the first state in the nation to implement a five-year Delivery System Reform Incentive Payment (DSRIP) program under the Section §1115 Medicaid "Bridge to Reform" waiver to improve the capacity of these hospitals to deliver high quality and more efficient care. The California DSRIP was the first program in a continuing national initiative to reform the Medicaid delivery system while remaining budget neutral. An extensive evaluation revealed major advances in infrastructure development, delivery of health care, and patient outcomes during the program. The results highlight the importance of joint federal and state investments in bolstering the capacity of safety net providers to deliver high-quality care, and they emphasize the need for continued investment in the safety net. The California DSRIP was followed by a program called Public Hospital Redesign and Incentives in Medi-Cal (PRIME), which incentivizes improvements in expanded and new areas of care not addressed by DSRIP