An Assessment of Pay for Performance Under California's Delivery System Reform Incentive Payment Program

California was the first state to implement the Delivery System Payment Reform Incentive Payment (DSRIP) program, which focused on improving health care delivery for Medicaid beneficiaries in specific public hospitals. With an overall $6.7 billion investment, California provided financial incentives toward transforming infrastructure and care delivery, and toward achieving better outcomes. The authors sought to describe the California DSRIP program's level of investment in transforming infrastructure and care delivery, and self-reported outcomes of care. Data on the level of investment per hospital, project, and specific metrics per project were used to calculate investment per metrics and self-reported reduced mortality and morbidity for specific measures. Most financial incentives were allocated to development of infrastructure and process of care redesign. Among outcomes, allocations per reduction were lowest for prevention of central line-associated bloodstream infection prevention, hospital-acquired pressure ulcers, and sepsis mortality and highest for stroke deaths and surgical site infections. DSRIP is an important example of the mechanism used by California with the goal of promoting system change, improved outcomes, and increased accountability under the Medicaid program. The results highlight the potential level of investment that may be needed to achieve these goals in similar under-resourced safety net providers.