Convergence Center For Policy Resolution

Convergence's
CALIFORNIA HEALTH REFORM INITIATIVE

This project was made possible by generous funding from Maja Kristin and The Hellman Foundation, as well as gracious pro bono support from White & Case LLP. 

The Vision

For over a year, Dialogue participants met as part of the California Health Reform Initiative (CHRI) project, convened by Convergence Center for Policy Resolution. CHRI’s diverse members engaged in deep discussions on how to meaningfully improve California’s health care system to benefit consumers and workers by containing costs, promoting quality, increasing access, and improving equity. 

CHRI urged the State of California to establish a government entity to address health care costs and affordability, including setting an annual Cost Target. California Governor Gavin Newsom’s proposal to create an Office of Health Care Affordability is in direct alignment with CHRI’s recommendation. On June 30, 2022, Governor Newsom signed legislation establishing the Office of Health Care Affordability. 

The Problem

At the time of the CHRI project, California spent much more on health care than comparably sized countries and spending had been growing more rapidly than wage growth or inflation. As a result, health care affordability was a challenge for many California consumers, workers, and purchasers. Also, inequities in affordability, quality, access, and health outcomes persisted based on income, race, ethnicity, gender, region, insurance type, and other individual characteristics.  

Compounding the problem, the state health care data was limited, and often fragmented or non-standardized, adversely affecting the ability to analyze and address these issues. Tackling affordability requires collaboration and innovation by all – government, insurance companies, physicians, labor, hospitals, employers, and consumers. At the time of the final report release, no single government entity was responsible for monitoring or addressing health care affordability, cost, quality, access, and equity for all Californians.  

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At the national level, total out-of-pocket health spending by US households (including family contributions to health insurance premiums, co-insurance, and deductibles) grew a cumulative 58% while workers’ average wages grew only 27% from 2007 through 2017.
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Total health care-related spending for a family with employer-sponsored insurance cumulatively increased by 142% from 2003 through 2018 in California, while median household income grew by 43%.
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Dialogue Recommendations

The CHRI project recommended that California establish a new government entity to address health care costs and affordability in these ways:

Cost Target

The Entity will set a Cost Target annually by region, applicable to health plans and providers, for year-to-year change. 

Providing Data-based Transparency

Near-term, high-priority actions are needed to address economic insecurity among paid caregivers, workforce shortages, burnout and exhaustion, and turnover. In parallel, longer-term actions are needed to broaden the “pipeline” of caregivers and create a true caregiving profession with ladders of advancement.

Supporting Target Achievement

Over the coming decades, the nation needs to commit significantly more resources and use those resources more efficiently and creatively to pay for older adults’ supports and services. This funding must come from a mixture of public and private sources.

Consequences of Performance Against Target

Over the coming decades, the nation needs to commit significantly more resources and use those resources more efficiently and creatively to pay for older adults’ supports and services. This funding must come from a mixture of public and private sources.

Project Outcomes

Convergence in California Event - CHRI Panel

Convergence in California was held March 2020. Watch this segment of the full event, where California Project Director Vicki Veenker moderated a panel discussion on bridging divides in the Golden State with CHRI participants.

Play Video

New Solution to Rising Health Costs Event

For the first time, a panel of participants from Convergence’s California Health Reform Initiative presented their innovative health care cost containment recommendation, aiming to improve health care affordability post-pandemic. The event was hosted by California Assemblymember Marc Berman (AD-24) in November 2020.

Health Care Affordability in California

Convergence Dialogue participants identified housing-related areas as ripe for collaboration. They also suggest strategies involving federal programs and policies that could reach systems and providers serving older and disabled adults.

Testimonials

In the News

A Holistic Remedy To Lower Health Care Costs

“Studies show that if costs continued to rise only at the rate of general economic growth, the proposed Office of Health Care Affordability could save Californians billions of dollars every year. The idea received broad support from health policy leaders, stakeholders and academics from three California universities during an 18-month dialogue facilitated by Convergence Center for Policy Resolution. Despite sometimes being on different sides of issues, we and other participants agreed that an effort to collect cost data and set enforceable cost targets is what California needs now.”

Consumer, Business Groups Push CA To Drive Down Health-Care Costs

“Consumer and business groups are speaking out in favor of California legislation to create an agency dedicated to cutting health-care costs. Bill Barcellona, executive vice president of government affairs for America’s Physician Groups [and a Signatory of the Convergence California Health Reform Initiative report, “A New California Government Entity to Address Health Care Costs & Affordability Report And Recommendation from the California Health Reform Initiative”], said experts are needed to ferret out where, how and why the marketplace is failing patients. ‘You have to have someone at the top of the system looking at the data, finding the gaps and driving innovation,’ said Barcellona. “And on the negative side, driving compliance.”‘ Assembly Bill 1130 from Assemblymember Jim Wood – D-Santa Rosa – would establish a State Office of Health Care Affordability. The agency would have the power to set cost targets for health plans, hospitals and more – and to enforce them.”

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Broad Coalition Of Health Leaders Releases Report Recommending New California Entity To Address Health Care Costs And Affordability

SACRAMENTO, CA – A diverse coalition of senior health policy leaders today released a report recommending a new California government entity to improve health care affordability, including by setting cost targets for health plans and providers. California Health Reform Initiative (CHRI) stakeholders, including some who often find themselves on opposite sides, met together in a year-long process to develop this recommendation. The group analyzed health care affordability in California and efforts by other states to address skyrocketing health care costs. The report comes as a growing chorus of health care industry and consumer groups have voiced support for Governor Gavin Newsom’s proposal to create a new state Office of Health Care Affordability.

Program Funders

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