In remarks that are as baffling as they are dangerous, many Office of Health Care Affordability (OHCA) board members are doubling down on an arbitrary, accelerated, and punitive process to drain hospitals of resources needed for patient care.
At last month’s OHCA board meeting, members discussed the enforcement process should hospitals fail to meet an annual spending target. Setting aside the fact that the statewide 3.5% target — along with the lower 1.8% target for seven specific hospitals — is far below health care inflation generally, the board appears indifferent to exigent and emerging demands that could cause hospitals to exceed the target.
This, despite the fact that the law requires OHCA to provide a reasonable and meaningful opportunity for hospitals and other health care providers to explain why a target might have been exceeded — including allowing them to provide information that would support a waiver from the enforcement process, such as investment in services, technologies, and programs that provide equitable, high-value care.
And those are only the activities that a hospital might have discretion over. How can any hospital be reasonably expected to meet a spending target when factors outside of its control cause spending to increase?
Through stated indifference to the impact of these external factors, the OHCA board seems to be suggesting that hospital spending on health care is solely driven by hospital decisions.
That simply isn’t the case.
In a letter sent to the board earlier this week, CHA calls attention to OHCA board members’ remarks that outright dismiss key drivers of health care spending increases. For example:
- Following the largest health care cuts in the nation’s history, passed under the One Big Beautiful Bill Act, hospitals will have no choice but to increase payments from other sources to sustain access to care or be forced to curtail services — but this was disregarded as a compelling reason to exceed the spending cap.
- Investments to keep pace with a $25 per hour minimum wage for health care workers also would result in penalties from OHCA.
- Cost pressures from new blockbuster drugs like Ozempic and Wegovy — drugs with life-changing impacts and for which patients are clamoring — were not deemed appropriate reasons for exceeding the target.
- One board member stated that only “acts of God” should be justifiable, but even that was curtailed by other board members’ opinions that such exceptions should be very narrow to avoid a “slippery slope” of granting more and more exceptions.
July’s OHCA board discussion is just the latest reminder that this agency is one that has consistently, since its inception, flouted both the letter and spirit of the statute that created it — especially the parts of the law that require OHCA to protect access to quality, equitable health care for all.
If the board continues in this direction, with no guardrails, it will be every Californian who suffers.
