Blue Shield of California is providing about $20 million to 18 California hospitals, health systems, clinics and physician groups that are seeking to participate more effectively in Accountable Care Organizations (ACOs).

Monday's announcement revealed that the funds will support numerous health information systems that ACOs will require to be successful. These include support for clinical information, data management, and information tracking systems. The funds will also go toward system integration and the establishment of health information exchanges. Among the examples of healthcare delivery organizations that will use their grants for IT projects are:

-- Brown & Toland, a San Francisco, Calif.-based independent practice association (IPA) of more than 800 community physicians, which will use its $1.7 million grant to create a local health information exchange to connect with other such exchanges locally and regionally and with other enterprise or stand-alone electronic health records.

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-- The Greater Los Angeles Care Innovation Corridor, located in Southern Calif., which will use its $300,000 grant to develop a system of care and coverage that seeks to lower the annual costs of care, enable consistent delivery and transparent reporting around quality and safety, and implement an interoperable health information exchange.

-- Physicians Medical Group of Santa Cruz, located in the Greater Bay Area, which will apply its $475,000 award to create a real-time care management tracking system to help reduce emergency room visits and readmissions while increasing post-discharge follow-up, complex case management, care coordination, and data sharing.

-- The Chinese Community Health Care Association, based in the Greater Bay Area, which will use its $971,000 award to improve electronic laboratory ordering and reporting, develop care coordination initiative, and implement electronic health record system enhancements.

"Acquiring, implementing, and/or adopting interoperable electronic medical records; local or regional health information exchanges; tools for measuring and reporting clinical outcomes; and patient registries will be critical for any ACO to succeed. That's why we made IT one of our criteria in making our grant decisions," Paul Markovich, senior vice president and chief operating officer at Blue Shield of California, told InformationWeek Healthcare.

Markovich also said ACOs can create financial and clinical integration between providers and health insurance companies, a link that is critical to fostering greater efficiency and quality in the delivery of care.

The ACO grants are part of Blue Shield's 2% pledge, a commitment the company made last June to limit annual net income to 2 percent of revenue and to return the difference collected above that amount to customers and the community. The $20 million in grants represent an average of $10 million for each of the two fiscal years (2010 and 2011) that the pledge has been applied.

"As the largest independent federally qualified health center, grants like this one allow us to provide our patients, most of whom are uninsured or underinsured, with the latest technology and care," Dr. Martin Serota, vice president and chief medical officer at AltaMed Health Services Corporation, told InformationWeek Healthcare./em>

Based in Southern Calif., AltaMed Health Services will use its $1 million grant to fund hardware and software upgrades, licensing fees, and staff to implement the technology to build a health information exchange among community partners that will help to reduce avoidable hospital admissions, length of stay and service duplication.

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