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.
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.
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.
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%.
The CHRI project recommended that California establish a new government entity to address health care costs and affordability in these ways:
The Entity will set a Cost Target annually by region, applicable to health plans and providers, for year-to-year change.
The Entity will provide increased price and quality transparency.
The Entity will make recommendations regarding how to remove barriers that may impair Target achievement and identify systemic approaches to reducing cost and improving quality as described in expert reports.
When a provider or health plan exhibits excessive low performance, the Entity may issue consequences.
Check out our donate page or contact our development team to learn more.
Never Miss an Update!