A pair of recent articles by nationally renowned health care policy experts — one in Health Affairs and one in The New York Times — underscores points that CHA has been making for years around the unintended consequences of artificially capping spending on health care services without adequately considering the impact on access to care, jobs, and patients’ experience.
In “Rhode Island’s Affordability Standards Led to Substantial Reductions in Hospital Staffing and Labor Costs by 2022,” a team of health care researchers at Brown University found that Rhode Island’s adoption of affordability standards in 2010 has had a significant and detrimental effect on hospital staffing and wages. Among the study’s findings:
- For registered nurses, the standards decreased staffing by 13.4% per bed.
- The standards reduced all non-physician wages by 5.9%, including a 3.8% cut for registered nurses.
- Rhode Island hospitals’ national ranking on staffing per bed for registered nurses fell from 21st before implementation to 30th after.
These data are central to a concept that the state’s Office of Health Care Affordability has brushed aside to date — that without balancing the need to both hold cost growth in check and maintain access to vital services, hospitals will be forced to make painful decisions that lead to job loss and reduced access to care.
The Brown University researchers are not alone.
In “This Is Not the Answer to Soaring Health Care Costs,” Lorens Helmchen, an associate professor of health policy and management at George Washington University, and Tony LoSasso, a professor of public affairs at the University of Wisconsin, Madison, make the case that the current trend of capping what hospitals, drug makers, and insurers can charge does not reflect high quality or convenience of health services. From the piece:
“A price cap isn’t merely a limit on what can be charged; it’s a claim that regulators know what the maximum price should be … Nor do price controls suppress market behavior. They redirect it. When prices are capped, care can become harder to get in other ways: longer waits, less convenient scheduling and greater restrictions on which patients get served. Canada illustrates the issue. Its provincial health systems set prices and operate within fixed budgets, and patients often pay with time rather than money. According to one estimate, the median wait from referral by a family doctor to treatment was 28.6 weeks in 2025.”
These articles are being published at a time when OHCA is considering its enforcement scheme for hospitals that exceed the 3.5% annual spending cap, where some penalties could be in the hundreds of millions of dollars for even a single-year violation —eviscerating hospital finances and the jobs and health services those finances support.
Health policy experts are finally talking out loud about the missing piece of the health care affordability conversation: That care must become more affordable but simply cannot come at the expense of access. There must be a path that serves both ends.
California hospitals stand ready to do their part, and state regulators have an opportunity — along with a legislative mandate — to collaborate with providers to build a stronger health care system that works for our state. That should begin immediately.
