California Health Reform

Convergence California Health Reform Initiative

How a New Office of Health Care Affordability Will Contain Costs in California  

On June 30, 2022, California’s Governor Newsom signed legislation establishing the Office of Health Care Affordability. The Office was proposed by Asm. Jim Wood (Assembly Bill 1130) and funds for Office were included in Gov. Newsom’s budget. It mirrored the recommendations issued by Convergence’s California Health Reform Dialogue in March 2020.

The new Office is planned to create a strategy for controlling health costs, including by establishing and enforcing cost targets for health care providers and insurers based on statewide expenditure and claims data, a concept that has the support of a broad coalition of consumer, business, labor and health care stakeholders brought together by Convergence and others as outlined in Convergence’s CA Health Reform report “A New Government Entity to Address Health Care Costs & Affordability.”

On Wednesday, May 5, 2021, Convergence hosted a webinar, “How a New Office of Health Care Affordability Will Contain Costs in California,” with special guests Dr. Jim Wood, California Assembly Health Committee Chair, and Elizabeth Landsberg, Director of the California Office of Statewide Health Planning and Development (OSHPD), along with participant stakeholders from Convergence’s California Health Reform Initiative (CHRI). During the webinar, moderated by Convergence’s Vicki Veenker (Director, CHRI and Managing Director, West Coast), panelists discussed the Office of Health Care Affordability proposal and its impact.

Watch the event recording below! 

A New Solution to Rising Health Costs

At a Nov. 9th virtual event hosted by California Assemblymember Marc Berman (AD-24) and moderated by Convergence’s West Coast Managing Director Vicki Veenker, Convergence’s California Health Reform Initiative (CHRI) participants promoted their proposal to rein in rising health care costs. 

Participant Bill Kramer, Executive Director for Health Policy at the Pacific Business Group on Health, described the group’s proposal that California creates a new state entity to set annual cost growth targets for health plans and providers, offer assistance in achieving the targets and set consequences for missing them. 

“If you had told me two years ago that this group of participants would find agreement to…any policy recommendation related to health care costs, I would have been surprised,” said dialogue participant Laurel Lucia, director of the Health Program at UC Berkeley Labor Center. 

Another dialogue participant, Lanhee Chen, Hoover Institution Fellow and Director of Domestic Policy Studies at Stanford University, noted the proposal would allow Californians to better understand where the health care market is failing. 

“[The plan] combines …cost targets with efforts at increasing price and quality transparency, which has been an elusive thing…over these many years,” said Chen. “A lot of people, whether they are conservatives or progressives, have talked about the need for greater transparency… It’s crucial to understanding what’s happening…” 

Watch the event recording below!

California Health Reform Initiative – Final Report

CHRI’s broad coalition of stakeholders released a report recommending that California establish a new government entity to address health care costs and affordability.  After a year-long study, including analysis of efforts in Massachusetts, Maryland, and other states, CHRI’s recommendation adds weight to the growing chorus of support for Governor Newsom’s proposed Office of Health Care Affordability.  California’s health care spending has been growing more rapidly than wage growth or inflation, creating an affordability problem.  To address this, the new entity would set annual cost targets, increase transparency regarding provider performance, and take other steps as outlined in the report. 

Four of our stakeholders discussed with Project Director Vicki Veenker the unique conversations they were able to have at CHRI’s convenings and how they managed to achieve consensus on challenging issues related to our health care system. Bill Barcellona, EVP of America’s Physician Groups, Laurel Lucia, Director of the Health Care Program at UC Berkeley Labor Center, Gary Cohen, VP at Blue Shield of California, and Bill Kramer, Exec. Director for Health Policy at Pacific Business Group on Health, share their experiences in this video:

The Challenge
For more than twenty years, California’s leaders have been debating how to effectively reform California’s health care system. The debate continues to take center stage as the Governor has prioritized health system policymaking since taking office in 2019. Policymakers and health care leaders alike believe the time is right for bold reforms that will make health care more affordable to consumers, businesses, and governments, and provide equitable access to high-quality care and service.

Project Overview
Convergence brought together a broad group of leaders representing diverse constituencies for a deep, creative discussion on pathways to health care reform. As a neutral, non-partisan convener, Convergence facilitated the conversation by establishing trust, uncovering common ground, and building consensus.

Using Convergence’s dialogue-to-action model, the California Health Reform Initiative (CHRI) launched its stakeholder process in October 2018 with its first stakeholder meeting in Sacramento. Senior officials representing providers, consumers, employers, insurers, workers, and academia came together for a respectful and robust conversation about common goals for California’s health care system. CHRI held seven convenings over more than a year, along with numerous working group sessions and videoconferences.

Moving Forward

The CHRI Report and Recommendation is the first-ever generated from a Convergence project outside of Washington, DC. As Convergence continues to enhance and expand our impact in this second decade of operation, CHRI demonstrates that the Convergence process works outside the Beltway and at the state level. 

Prior Convergence Health Projects
Convergence has substantial experience with health-related projects. At the national level, Convergence convened a successful Health Reform Roundtable involving ideologically diverse and nationally respected health policy thought leaders. The members of that separate Convergence effort reached agreement on bipartisan policy pathways forward at two critical points in the 2017 health care debates. Convergence remains engaged on a national level in health care policy issues through the Future of Health project.

Convergence has received generous funding from Maja Kristin and the Hellman Family to support the California Health Reform Initiative, as well as generous pro bono support from White & Case LLP.