The Office of Health Care Affordability (OHCA) is racing toward imposing even tighter spending growth caps well below the rate of inflation on a handful of California hospitals, which will irreparably harm patient care.
On Tuesday, the OHCA board discussed yet another method to identify and single out “high-cost” hospitals. The approach suffers from critical flaws and appears to be arbitrary and capricious, yielding 11 dissimilar hospitals — all with a story to tell if OHCA will listen.
The growth target for this group of hospitals would be approximately half of the statewide target of 3.5%, which itself is well below national health care inflation.
In a Feb. 21 letter to the OHCA board, CHA lays out significant concerns with the current approach, including:
- Failure to account for underlying differences in the cost of providing patient care
- Failure to address payer mix, where Medicare and Medi-Cal reimburse well below the cost to care for patients
- Exclusion of a full 40% of the services hospitals provide by removing outpatient services from key calculations
- And more
Of greatest concern is that these calculations fail to address the most important question: “In what way will these targets affect patients’ access to high-quality care?” OHCA is required by law to answer that question — but has not yet done so.
With California hospitals being forced to close service lines and federal cuts to Medicaid and Medicare looming, this is the wrong time to recklessly plow forward with equally sizable spending cuts by the state of California.
The board’s discussion this week sets up a new, aggressive timeline for cutting hospital services in California. A vote could come as early as April, with new targets to be in place starting in January 2026.
In the coming weeks, CHA will share more information about how you can engage to help the OHCA board and state legislators understand the consequences and harm that these targets would have on the patients you serve.
