We've been running a series of posts on the Health CEOs for Health Reform, highlighting innovative models of integrated care, health IT, comparative effectiveness, and clinical excellence.

Today, we examine a collaboration being developed between payers, providers, and health plans in California to share in the savings of higher quality, lower cost care. Tomorrow, we'll wrap-up the series by looking at how these real-world experiences can be translated into practical policies for health reform.

In the video below, Wade Rose of Catholic Healthcare West and Mike Johnson of Blue Shield of California describe a pilot project being developed with the Hill Physicians Group and the California Public Employees Retirement System (CalPERs).

It's an experiment in shared savings. Beginning in 2010, Catholic Healthcare West, Blue Shield of  California and the Hill Physicians Group have agreed to hold health care costs for CalPERs members living in the Sacramento area at or below their 2009 levels. They will do this while maintaining their commitments to quality care and patient satisfaction. If they deliver quality care in 2010 at rates less than their 2009 levels, the organizations will share in the savings. If costs rise above their 2009 levels, each organization will share the responsibility for a part of that burden.

The project is an encouraging example of how we can realign incentives within our system toward a more integrated model of care. Currently the interest of insurers, hospitals, doctors, and employers are often at odds. One group's savings is another group's loss. Under a model of shared savings, stakeholders have a reason to work together to deliver high value health care. Already there are more than 100 different initiatives being developed to improve quality and reduce costs. They're looking at ways to:

• Improve coordination of care following patient discharge from hospitals to reduce complications and readmissions
• Expand patient participation in disease management and complex case management programs
• Promote palliative care
• Increase the use of generic drugs
• Minimize physician practice variation

What makes this project even more relevant is the nature of its participants. Blue Shield of California has more than 3.4 million members in California. CalPERs, which  provides benefits to 1.6 million state, school and local public employees, retirees and their families, is Blue Shield's biggest customer and the second biggest purchaser of health care in the state. Catholic Healthcare West is the largest private health care system in the state and Hill Physicians Medical Group is one of the nation's largest independent physician associations. (For more on Hill Physicians, check out the work of our colleague, Tom Emswiler, here and here, who's studied the group extensively as part of a project between the New America Foundation and the Commonwealth Fund).

These are not tiny players. As Wade Rose noted in his presentation, Catholic Healthcare West represents the way most health care is currently delivered in the U.S. As Rose says, "We are the reason there needs to be health care reform."

The outcomes from this project, therefore, are not exceptions to the rule, but rather proof that real change can happen within our existing system. Already, this past June, CalPERs reported the lowest increase in overall premiums in 14 years -- and that's before the project is fully off the ground. If they can do it in California, we can do it as a nation.