While California health policy leaders have been working at breakneck speed to implement the Affordable Care Act, little attention has been paid to the growing problem of rising health care costs.
Earlier this summer, Massachusetts policymakers enacted dramatic new legislation to control health care spending because, while coverage and access increased, costs were spiraling out of control following the passage of the state’s health reform law.
But, California is not Massachusetts.
Massachusetts officials were far down the path in implementing their health reform law and did not address health care costs from the outset.
Massachusetts implemented rate regulation that falsely held down premiums while the underlying health care costs continued to escalate.
Let’s make the right policy choices for California so the success of health reform is not threatened by skyrocketing health care costs.
First, we should seek to avoid the necessity of having to test out experimental approaches to hold down spending, as they are doing in Massachusetts.
Instead of controlling provider rates, plans, providers and the government should work together to reduce health care costs.
Let’s reduce the cost shift — when providers shift losses from underpayment for public health coverage onto private insurance — by ensuring the government pays providers enough to cover their costs for treating Medi-Cal beneficiaries. Right now, California ranks worst in the nation in Medicaid provider payments.
Let’s expand upon the success of California’s managed care and payment models in private and public programs. California was the birthplace of managed care and has diminished the use of fee-for-service health care that is rampant across the nation, but we can do more.Â
Let’s be mindful when considering legislation that drives up health care costs for everyone.Â While a new mandate for coverage may be popular, can policyholders ultimately bear increasing costs? Affordability is directly tied to the achievement of universal coverage.Â If coverage costs too much, not enough people will buy it.
We will be closely watching to see if Massachusetts’ efforts to curb rising health care costs work, but in the meantime, policymakers in California can work to avoid the need to take such measures.