Board will support the Office of Health Care Affordability

SACRAMENTO — With the appointment of Health Care Affordability Board members on Tuesday, California took a significant step toward ensuring that all Californians have health care that is accessible, affordable, equitable and high-quality.

“Health care costs are growing faster than Californians’ wages and it’s simply unsustainable for California families,” said Department of Health Care Access and Information (HCAI) Director Elizabeth Landsberg. “The Board will be an essential partner to the HCAI Office of Health Care Affordability (OHCA) in achieving the vision of a more sustainable, affordable healthcare system for all Californians.”

“As a physician, I’ve seen too many patients struggle to pay for essential care or medications, and it’s heartbreaking,” said California Health and Human Services Secretary Dr. Mark Ghaly, who will sit on the Health Care Affordability Board. “As a state we have a unique opportunity through the work of the Office of Health Care Affordability to identify what’s driving consistently high health care costs and set spending limits to slow the rate of growth, which can help families get high-quality, equitable care at an affordable cost.”

The eight-member Board has a broad range of expertise and experience. It is charged with setting statewide and sector-specific spending targets, appointing a Health Care Affordability Advisory Committee, and approving key benchmarks, such as alternative payment model adoption and the share of spending dedicated to primary care and behavioral health. Board members may not receive compensation from health care entities.

Health Care Affordability Board Members:

• Dr. David Carlisle, President and CEO of Charles R. Drew University of Medicine and Science.
• Dr. Mark Ghaly, Secretary of the California Health and Human Services Agency.
• Dr. Sandra Hernandez, President and CEO of the California Health Care Foundation.
• Dr. Richard Kronick, Professor in the Herbert Wertheim School of Public Health, University of California, San Diego.
• Elizabeth Mitchell, President and CEO of the Purchaser Business Group on Health.
• Don Moulds, Chief Health Director of the California Public Employee Retirement System. Moulds is a non-voting member.
• Ian Lewis, Political and Research director of the National Union of Health Care Workers.
• Dr. Richard Pan, a pediatrician and former state Senator.

• Increasing public transparency on total health care spending in the state. OHCA will collect total health care expenditure data, broken down by category (e.g., hospital care, physician services, prescription drugs, etc.) and supplement it with additional sources. OHCA will publish an annual report in conjunction with a public meeting on health care spending trends and underlying factors, along with policy recommendations to contain costs and improve the quality and equity of the health care system.
• Setting an overall statewide spending target and specific targets for different sectors of the health care industry. The Health Care Affordability Board will establish an overall spending target for per capita spending in California and have the authority to set specific targets by health care sector, geographic regions, and individual health care entities, as appropriate.
• Enforcing compliance with the spending targets. Enforcement will begin with technical assistance to health care entities not in compliance with the spending targets and may progressively increase to include testimony at public meetings, performance improvement plans, and assessment of financial penalties.
• Promoting and measuring quality and equity through performance reporting. Because focusing on spending alone can have unanticipated consequences, OHCA will measure and publicly report on system performance to prevent unintended consequences.
• Setting statewide benchmarks for adoption of alternative payment models and developing standards for use by payers and providers during contracting. OHCA will set a statewide benchmarks for adoption of alternative payment models that reward high quality and cost-efficient care. OHCA will measure progress towards the benchmarks and adopt standards for alternative payment models that may be used by providers and payers during contracting.
• Measuring and promoting a sustained systemwide investment in primary care and behavioral health. OHCA’s enabling statute highlights the foundational role primary care plays in an effective health care system and highlights the strength of evidence supporting association of greater use of primary care with key outcomes, such as lower costs, fewer hospitalizations and emergency department visits, and lower mortality. Models that integrate primary care and behavioral health services have been shown to improve access to effective behavioral health services that improve outcomes, as well as reduce downstream health care costs.
• Monitoring and addressing health care workforce stability. OHCA will examine the role of the health care workforce and assist health care entities with strategies to implement cost-reduction strategies that do not exacerbate existing workforce shortages and that will promote health care workforce stability.
• Increasing public transparency on health care consolidation and market power. Research has linked market consolidation among health plans, hospitals, medical groups or physician organizations, pharmacy benefit managers, and other health care entities to higher prices paid for health care services. OHCA will increase public transparency through cost and market impact reviews on transactions that are likely to significantly impact market competition and affordability for consumers and purchasers.

WHAT COMES NEXT

The first meeting of the Health Care Affordability Board will be March 21, 2023. An early activity of the Board will be appointing the Health Care Affordability Advisory Committee. This committee will provide input to the Board on topics ranging from spending targets to benchmarks for adoption of alternative payment models. For additional information about the Advisory Committee’s role, eligibility criteria, and the process for expressing interest in membership, please view the Advisory Committee Submission of Interest Form.

ORIGIN OF THE BOARD

The creation of OHCA was included as a recommendation in the final report of the Healthy California for All Final Commission (HCFA). The HCFA Commission shared a vision of a Healthy California for All that ensures health care is accessible, affordable, equitable, high-quality and universal. HCFA was charged with developing a plan that included options for advancing progress toward a universal health care delivery system in California. This plan provides coverage and access to health care through a unified financing system for all Californians, including but not limited to, a single-payer financing system. OHCA will advance a key pillar of the Healthy California for All shared vision by ensuring that the health care system is sustainable over the long term by slowing growth in health care spending.

Additional information on the Board’s role is available at the OHCA webpage, and details about Board members are available at the Health Care Affordability Board webpage. Meeting agendas, materials, and minutes will be posted at HCAI’s public meeting webpage.

Please subscribe to our mailing list, to receive regular updates from the Office of Health Care Affordability.

For more information on the Office of Health Care Affordability and the Health Care Affordability Board, or to subscribe to OHCA’s distribution list, visit the webpage.

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