At its inaugural meeting on March 21, the California Office of Health Care Affordability’s new Health Care Accessibility Board (HCAB) discussed health care spending in the state, elected its first chair, and reviewed potential government spending targets.
The HCAB falls under the Department of Health Care Access and Information (HCAI). Its eight members have been appointed February 28. Members offer a wide range of expertise and will work to increase public transparency regarding total health spending in the state.
The council—established by Senate Bill 184 in 2022 – focuses on developing health care cost growth targets to reduce Californians’ ever-increasing affordability challenges. From 2001 to 2020, California had the second highest average annual growth rate in expenditure per subscriber for private insured persons. In 1991, per capita healthcare spending in California was $2,659 while in 2020 it was $10,299. The average annual growth in health care spending per capita in California from 1991 to 2020 was 4.8%.
High health care costs disproportionately impact Black and Latino/x Californians, with 36% of Blacks saying they or a family member have had difficulty making payments or haven’t been able to pay their medical bills in the past 12 months. For Latino/x individuals, it was 40%.
Testimony on the impact of high healthcare costs
Clementina Gonzalez drove three hours to share her experiences with HCAB regarding an expensive hospital in Monterey County. She lives in Marina and works as a housekeeper in Monterey.
“About 10 years ago I went to a community hospital in Monterey for treatment for a blood alignment,” Gonzalez said. “I was hospitalized, (and) received transfusions and other procedures. Even with the health insurance I had, I had to pay over $10,000 – and I didn’t not that.
Gonzalez described how she did her best to pay the hospital for services in a timely manner, but regardless of her attempts, the hospital sent her to collections and, she said, ruined her credit.
“My family and I get very stressed and depressed when we had to cut back on food and other needs just to pay off those bills,” Gonzalez said. “Meanwhile, my daughter was supposed to start college and she decided to stay home for a few years just to take care of me.”
While her daughter made a major sacrifice for her health, Gonzalez said that over the next few months her condition worsened and she sought treatment at a local community hospital in Monterey. She thought the community hospital would be more affordable, but it was just as expensive, she says.
“I was billed thousands and thousands and thousands and thousands of dollars just to keep me going,” Gonzalez said. “Even though my insurance covered part of the bills, I am again in debt and I am worried. Please do what you can to reduce these costs. I tried to avoid going to the hospital, but sometimes I get too sick and need treatment.
Gonzalez was one of many who testified before the board about the unaffordable costs resulting from unavoidable health issues.
Members elect HCAB President
Following public testimony, HCAB members solicited nominations for the position of Chairman of the Board. David M. Carlisle, MD, PhD, nominated California Health and Human Services Secretary Mark Ghaly, MD, and members were quick to support the motion.
“I’m concerned about how quickly everyone has supported this motion,” Ghaly joked. “I would say it would be a tremendous honor to serve as chair of this board. I think the role of chair, not just to work with Elizabeth (Landsberg, director of HCAI) and your very capable team, but to really gather the expertise of board members, to make sure that we pay attention to the star polar what the people who have just left this room, the people who have just spoken about their struggles.
Sample Spending Goal: Massachusetts
Michael Bailit, president of Bailit Health (a Massachusetts consulting firm), showed the board examples of the variety of spending goal processes currently in place in several states, with a focus on Massachusetts.
“The spending target by itself won’t be enough to slow healthcare spending in California, at least that’s my prediction,” Bailit said. “We need additional actions.
In 2012, Massachusetts passed legislation to establish a spending target program, and as soon as it was implemented, spending fell below the annual national growth rate, or about $7 billion. reduced business expenses, according to Bailit.
“To me, this is the most telling indication that their target has had an impact on the commercial market, which is the market that most needs to have an impact,” Bailit said.
He acknowledged how the data in 2020 and 2021 has picked up and acknowledged that the purpose of spending targets is not to reduce spending costs for individuals, but rather to slow the rate of growth in healthcare spending.
“People who testified today and talked about their personal expenses – that doesn’t solve their problem,” Bailit reiterated.
Next steps for the HCAB
The development of spending goals for California will involve numerous board meetings to discuss design decisions, which include reporting levels, year-over-year percentage change calculations, strategies for to ensure that data is reported completely and accurately and adjustments to the performance of spending targets. This will be one of the main objectives of the HCAB until the third quarter of this year.
This fall, the HCAB will finalize its recommendations and issue regulations for collecting 2022-2023 total health expenditure data for its baseline report. In the spring of 2024, a statewide spending target will be adopted, and that summer payers and fully integrated delivery systems must submit their 2022-23 total health care spending data to the Bureau of affordability of health care.
To begin 2025, spending goals will be implemented but not subject to enforcement, and in the spring, recommendations will be made for the 2026 statewide spending goal and report. reference on health expenditure will be published. The board would also have the option of adopting multi-year or annual spending targets.
The 2026 statewide spending goal will be subject to enforcement. By 2027, the first annual report covering spending target performance for payers and fully integrated delivery systems from 2024 to 2025 will be published. By this fall, the HCAB will define the initial health care sectors so that the board can set specific goals for each sector.