CA/Healthcare—
By Suzanne Potter, producer, California News Service, a bureau of Public News service.
The cost of healthcare in California keeps rising every year and on Aug. 26, the board for the state Office of Healthcare Affordability will look at proposals designed to bend the spending curve.
Over the past two years, the state established cost growth targets for hospitals, as well as both provider and insurance groups.
Chris Noble, organizing director for the nonprofit Health Access California, said the agency is now considering fines for companies that repeatedly overspend.
“To actually ensure that target is enforceable, that will create a real material incentive for these different sections of the healthcare system to find ways to contain costs and make healthcare more affordable for all of us,” Noble explained.
Stats on healthcare costs
Noble noted healthcare costs typically go up 6% each year, outpacing inflation, wage growth and premium increases, adding hospitals are a major contributor, with some high-cost hospitals spending 300% to 500% of the Medicare reimbursement rate.
Hospitals said they are working to bring costs down and keep patient care affordable. Santa Barbara Cottage Hospital said in a public statement it offers financial assistance programs to patients and is working to find new efficiencies in purchasing supplies. Over the summer, Health Access held town hall meetings in areas where healthcare costs have spiked, including Monterey, Santa Barbara and Santa Clara County.
Conor O’Brien, president of the Greater Santa Cruz Federation of Teachers, said some newly hired educators in his district put a quarter of their monthly income toward health insurance premiums.
“We’re getting crushed by healthcare costs,” O’Brien stressed. “Last year, our rates went up by 19% for Sutter Health and this year they are going up by 22.6% and we can’t afford it.”
The cost growth targets are based on the median income wage growth of Californians and are designed to grow with people’s ability to actually afford care. Before any fines would be imposed, companies would be asked to implement a performance improvement plan.
