Policy Briefing California Bill Targets Healthcare Affordability BY B I L L B A R C E L LO N A , E X EC U T I V E V P, G OV E R N M E N T A F FA I R S , A M E R I C A’ S P H YS I C I A N G R O U P S
For many years, California was the home of HMO affordability. The state’s loss of that moniker—due to employer abandonment of HMOs in the early 2000s in favor of full-replacement high-deductible PPO plans—has left California with a slightly higher-than-average cost escalation in the healthcare sector of the state’s domestic product. Policymakers are looking for ways to improve that cost trend. One proposal is California Assembly Bill 1130, an ambitious piece of legislation that would create a state Office of Health Care Affordability. APG’s California Board members recently met with the bill’s author, Assembly Member Jim Wood (D-Santa Rosa), who chairs the Assembly Health Committee, as well as with representatives of the Newsom administration; Office of Statewide Health Planning and Development (OSHPD) Director Elizabeth Landsberg; and Vishaal Pegany, Assistant Secretary of the California Health & Human Services Agency. After a lengthy discussion, APG has moved toward a “support if amended” position on this legislation. APG will likely be one of the few provider-oriented organizations to take this position during this legislative session. What does the Office proposal entail, and what are the ramifications for the California healthcare economy?
A DEEPER LOOK AB 1130 would create a framework for collecting information on the healthcare ecosystem within California. The idea is for policymakers to understand where cost drivers exist so they can attempt to correct affordability issues at the state level and perhaps even at the regional or “sectoral” levels as well. In addition to cost control, the proposal’s objectives include the expansion of value-based provider payment, standardized quality metrics, systematic decrease of health disparities, support for primary care and behavioral health integration, and monitoring of healthcare workforce stability. How would all of this oversight come about? The bill creates an Office of Health Care Affordability within the state government. This is different from the direction taken by Massachusetts, with its famous Health Policy Commission model that relies on a public board loosely affiliated with the Commonwealth’s attorney general. Massachusetts created a system in which state staff report to a publicly appointed board of experts, whereas the California proposal would create an advisory board that would debate and recommend strategies to the director of the Department of Health Care Affordability and Infrastructure. Thus, the California proposal vests final authority with the governor, who also controls the
16 l JOURNAL OF AMERICA’S PHYSICIAN GROUPS
Spring 2021
“It represents a sea change in the approach to strategic oversight of the healthcare market.”
