What’s happening: At the Office of Health Care Affordability’s (OHCA) Oct. 14 board meeting in Sacramento, board members expressed interest in moving swiftly on adopting a regional hospital sector spending target, at least in Monterey County, which OHCA announced will also be the subject of an investigative hospital market competition study.
What else to know: The board welcomed its newest member and approved the state’s first primary care investment benchmark.
The OHCA board’s interest in accelerating adoption of sector spending targets served as a follow-up to the board’s August assessment of Monterey’s hospital market, as adopting such targets would allow OHCA to differentiate the spending target by provider type, region, and individual health care entity.
Under state law, OHCA is required to adopt sector spending targets for no later than the 2029 calendar year, but it may do so sooner at the board’s discretion. Multiple OHCA board members shared that Monterey’s hospitals should be subject to a spending target lower than the current 3.5% target, while others sought further analysis of other regions and hospitals where costs are high. The board directed OHCA staff to present options for a sector spending target for Monterey County’s hospitals.
The purpose of the investigative hospital market competition study in Monterey County is to provide information to the public, and the results will be released in a public report that is expected to be completed in six to nine months.
The board also welcomed its newest member, California Health and Human Services Agency Secretary Kim Johnson, who was appointed following the resignation of former secretary and board chair Mark Ghaly, MD, MPH. At its Nov. 20 meeting, the OHCA board intends to vote on its next board chair.
Finally, the OHCA board approved its first primary care investment benchmark: a goal to increase the share of total health care spending that goes toward primary care. Specifically, the board approved two related primary care investment benchmarks:
- Annual improvement benchmark: 0.5 percentage points to 1 percentage point per year increase in primary care spending as a percent of total medical expense for each payer for performance years 2025 through 2033
- Statewide investment benchmark: 15% of total medical expense allocated to primary care for all payers by performance year 2034
Contact Ben Johnson, group vice president, financial policy, at bjohnson@calhospital.org with any questions.
