New Bill Would Create CA Commission to Set Health-Care Prices

Roxane Sanchez, president of SEIU California, spoke at a news conference Monday in support of AB 3087. Photo Credit: California Assembly

Suzanne Potter
California News Service

SACRAMENTO, Calif. – Labor unions and consumer advocates are throwing their support behind a bold new bill in California to control health-care costs by creating a commission to set limits on what providers can charge.

Supporters held a rally Monday April 9 in Sacramento to push Assembly Bill 3087, citing skyrocketing health-care costs.

The bill, written by Assembly Member Ash Kalra, D-San Jose, would create an independent Cost, Quality and Equity Commission made up of many stakeholders, including providers, insurers and patient groups who would aim to stop price gouging while ensuring a reasonable markup for doctors and hospitals.

“It takes into account a wide range of factors to ensure that the number set is appropriate, in order to actually pay for the services and allow our system to be sustainable,” Kalra said.

The system would be modeled on the way Medicare sets reimbursement rates, and on a similar system established in Maryland in 1971 that has given that state the lowest rate of hospital markups in the country.

Opponents argue that government-mandated lower prices would drive doctors out of the state, exacerbating the current physician shortage and reducing access for patients.

A recent report from the University of California-Berkeley showed that consolidation among health-care systems led to higher prices, even though it was supposed to make the system more efficient and thus, lower costs and improve care.

But Kalra said now, more people are going to the doctor less frequently, to save money.

“The data showed that consolidation has not led to a drop in prices – rather, what we’ve seen is an increase in prices and a drop in utilization,” Kalra explained. “Consolidation is leading to higher prices, because they have more of a percentage of the market, so it’s actually having a reverse effect.”

The bill also creates a system of appeals, giving providers a forum to argue for just compensation; and it introduces what is known as “global budgeting” for hospitals, a system intended to discourage unnecessary procedures and incentivize preventive care.