- Joined
- Aug 10, 2013
- Messages
- 25,675
- Reaction score
- 32,833
- Location
- Cambridge, MA
- Gender
- Male
- Political Leaning
- Slightly Liberal
California has joined the small-but-growing list of states that are trying to force stakeholders to get a handle on rising health care costs by setting a statewide spending growth target. The results in other states thus far are a bit mixed, or at least unclear, but with the California's single-payer bill seemingly perennially stalled this is a signal they're going to try to get at the issue in other ways.
California Dabbles With Reining in Health Spending
California Dabbles With Reining in Health Spending
California is now among the states trying to keep health-care costs down by setting spending caps — a task that pits public officials against a deeply entrenched and heavily lawyered set of players. It’s uncertain whether the state can get insurers, hospitals and medical groups to collaborate on containing costs even as they jockey for their slice of California’s $400 billion-plus health-care pie.
The verdict could take years.
In late April, the state’s new Office of Health Care Affordability set a five-year target for spending growth that starts at 3.5 percent for 2025 and drops to 3 percent by 2029. The goal of the embryonic agency is to make care more affordable and accessible while improving health outcomes and reducing inequity. . .
For health-care organizations that miss the target, a long and messy process begins that could end with fines of as much as 100 percent of the overspending. But that probably wouldn’t happen until 2030 or beyond, if ever.
In 2013, Massachusetts was the first state to set annual spending targets. Connecticut, Delaware, Nevada, New Jersey, Oregon, Rhode Island and Washington are among other states that have set targets.
The results in Massachusetts have been mixed: The state beat its target in three of the first five years, falling below the average national spending increase.
But more recently, its health spending has increased. In 2022, it exceeded the target by nearly double, and the state’s Health Policy Commission, which oversees spending control efforts, warned of “many alarming trends.”