Bill would have state set health care prices
SACRAMENTO – In one of the most aggressive efforts in the nation to curb soaring health care spending, a California measure introduced Monday would put the state in charge of setting prices for hospital stays, doctor’s visits and most other medical services covered by commercial insurers.
The bill, backed by labor unions and consumer groups, is certain to rouse fierce opposition from physicians and hospitals, setting the stage for a brawl between some of the Capitol’s top lobbying heavyweights. Proponents also face friction on the left from advocates of single-payer health care, who espouse an alternate vision of how to overhaul the state’s health care.
Despite the political hurdles, an effort to rein in prices is tantalizing for policymakers, as health care costs gobble up more of state budgets, employers’ bottom lines and workers’ paychecks.
“It’s quite bold,” said Kristof Stremikis, director of market analysis with the nonprofit California Health Care Foundation. “I’m not surprised that a proposal like this has been put forward. I don’t think many people would disagree with the assertion that health care costs in the state are far too high.”
The measure would establish a commission that would set rates for health care services based off what the government pays for such services under Medicare.
The commission, which would be an independent state entity, would determine the rates for all services covered by commercial health plans, including those offered by employers to their workers and those sold in the individual marketplace. Public health programs, including Medicare and Medicaid, would not be affected by those price caps.
The proposal takes some inspiration from the model established by Maryland, in which the state sets the prices paid by all payers – including insurance companies and public health care programs – for hospital services.
California Assemblyman Ash Kalra, a San Jose Democrat who is carrying Assembly Bill 3087, said the measure marks a shift in the health care debate, from maximizing insurance coverage to addressing the cost of care.
“Access must be coupled with affordability,” Kalra said. “Just having access to health care by itself doesn’t mean you’re going to get the health care you need.”
But opponents counter that capping prices could inhibit patients’ ability to get care by driving doctors out of the state and hospitals to scale back services.
Dr. Theodore M. Mazer, a San Diego ear, nose and throat specialist who is president of the California Medical Association, called the bill a “poorly conceived, unprecedented threat to patient access to health care.”
“This dangerously flawed legislation would result in governmentsanctioned rationing of care and higher outof-pocket costs for patients,” Mazer said in a statement. “It would also likely cause an exodus of practicing physicians, which would exacerbate our physician shortage and make California unattractive to new physician recruits.”
Driving the measure is the country’s escalating health care spending, which is by far the highest in the world. The United States spends about 18 percent of its gross domestic product on health care, nearly doubling the average of other advanced industrialized nations, according to the Organization for Economic Cooperation and Development.