What’s happening: In separate meetings this week, members of the Office of Health Care Affordability’s (OHCA) board and advisory committee offered varying perspectives on OHCA’s proposed spending target of 3%, some endorsing the target and others questioning its rationale and attainability.
What else to know: CHA commented in writing and at both meetings testified in person, joined by hospital and health care organizations advocating for changes as OHCA contemplates a final target.
OHCA is tasked with slowing the growth of health care spending, principally by setting and enforcing a target for the annual growth in per capita total health care expenditures.
On Jan. 17, OHCA staff proposed a 3% statewide spending growth target, applicable on an annual basis for 2025-29. The target value is based on the historical growth in median household income over the past 20 years. After the public comment period ends on March 11, OHCA’s board must approve the spending target — potentially with changes — no later than June of this year.
On Jan. 23, OHCA’s advisory committee met to provide feedback on the proposal and other matters. Committee members voiced various opinions, with several endorsing the proposed target and arguing against any adjustments. Other members aired concerns that the methodology does not account for cost trends in health care, such as the impacts of aging or costs associated with advancements in health care, like new technologies or specialty drugs.
On Jan. 24, OHCA’s board met to discuss the spending target proposal and other issues. As with the advisory committee, board members aired varying perspectives, with certain board members endorsing the proposed target, others expressing concerns that it is too low, and others not offering a view at this point. This meeting marks the beginning of a 45-day public comment period for stakeholders to provide feedback on the proposed target, which ends on March 11.
A diverse array of payer and provider organizations — including representatives of health plans, physicians and physician groups, children’s hospitals, and individual hospitals — testified in support of a more reasonable target. CHA thanks the members who lent their voice to this important discussion. Consumer groups and organized labor representatives also provided comment, urging against adjustments that would increase the spending target value.
Both meetings this week included an update on OHCA’s proposed data collection regulations and an introductory discussion of a methodology for measuring hospital spending. The latter is intended to kickstart a process that will continue over the next year to increase transparency on hospital spending. In the coming months, a work group will be formed to provide input on this new effort.
For more information, contact Ben Johnson, vice president, policy, at bjohnson@calhospital.org.
