California

The Petris Center has analyzes changes and initiatives in California’s healthcare system relating to mental health, insurance premiums, marketplace plans, and regulation.

The Seven Percent Solution: Costing and Financing Universal Health Coverage in California

By Richard M. Scheffler and Stephen M. Shortell | Published February 24, 2019 | Link to Full Report

As of 2017, California’s uninsured rate stands at just over 7 percent. Moving towards universal health coverage in California for the 3.72 million projected to be uninsured in 2020, of which about 1.5 million are undocumented, is a significant challenge but has considerable benefits. A healthier workforce will be more productive and absenteeism will decline.4 Moreover, taxes collected from these healthier workers will increase. All Californians will have their risk of disease lowered. Universal coverage will allow all Californians to have improved access to care so they can prevent and treat illnesses that can be passed on to others. Children will have a better start to life and there will be less absenteeism in schools. In addition, the expensive treatment in emergency rooms would surely decline. Beyond these benefits for all Californians, it is the right thing to do. Most Californians support universal coverage, but have reservations about the cost of doing so.

California Dreamin’: Integrating Health Care, Containing Costs, and Financing Universal Coverage

By Richard M. Scheffler and Stephen M. Shortell | Published February 8, 2019 | Link to White Paper | Link to Attendee List

Building on California’s distinct integrated health system we show how expanding it and using risk adjusted capitation payments are able to reduce spending and improve quality. Moreover, this approach puts California on a path that will achieve universal coverage. Finally, we provide a new plan to finance universal coverage in California.

Consolidation in California’s Health Care Market 2010-2016: Impact on Prices and ACA Premiums

A Report by the Petris Center | Published March 26, 2018 | Link to Full Report

This report details the rapid consolidation of the hospital, physician, and insurance markets in California from 2010 to 2016. It finds that the vast majority of counties in California warrant concern and scrutiny according to the DOJ/FTC Guidelines. It also finds that consumers are paying higher health care prices and ACA premiums as a result of market consolidation.  The significant variation in prices and ACA premiums across the state  – particularly the large discrepancy between Northern and Southern California – suggests regulatory and legislative solutions need to be implemented to address health care market concentration in California.

Proposal to Use Three Initiatives to Lower Healthcare Spending and Finance Universal Health Insurance Coverage in California

By Richard M. Scheffler, Brent D. Fulton, Donald D. Hoang, and Stephen M. Shortell | Published March 28, 2018 | Link to Full Report

Health expenditures in California continue to grow with respect to the state’s gross domestic product, resulting in healthcare becoming more unaffordable to the state, employers, and individuals. In this report, we project health spending in the California from 2015 to 2022. We then estimate potential reductions in spending from the Berkeley Forum for Improving California’s Healthcare Delivery System’s initiatives to increase the use of global budgets/integrated care systems, patient-centered medical homes, and palliative care. By 2022, these initiatives generate an estimated $15.4 billion in health spending reductions, an amount sufficient to provide universal health insurance coverage in the state at a cost of $7.2 billion. The State of California, the federal government, and the private sector should consider accelerating their programs related to these initiatives to help achieve these health expenditure reductions. A companion article “Financing Universal Coverage in California: A Berkeley Forum Roadmap” to this report was published on the Health Affairs Blog on March 29, 2018.

Differing Impacts of Market Concentration on Affordable Care Marketplace Premiums

By Richard M. Scheffler, Daniel R. Arnold, Brent D. Fulton, and Sherry A. Glied | Published May 2016 in Health Affairs | Link to Full Article

Recent increases in market concentration among health plans, hospitals, and medical groups raise questions about what impact such mergers are having on costs to consumers. We examined the impact of market concentration on the growth of health insurance premiums between 2014 and 2015 in two Affordable Care Act state-based Marketplaces: Covered California and NY State of Health. We measured health plan, hospital, and medical group market concentration using the well-known Herfindahl-Hirschman Index (HHI) and used a multivariate regression model to relate these measures to premium growth. Both states exhibited a positive association between hospital concentration and premium growth and a positive (but not statistically significant) association between medical group concentration and premium growth. Our results for health plan concentration differed between the two states: it was positively associated with premium growth in New York but negatively associated with premium growth in California. The health plan concentration finding in Covered California may be the result of its selectively contracting with health plans.

States Can Contain Healthcare Costs. Here’s How: A New York Times Op-Ed

By Richard M. Scheffler and Sherry A. Glied | Published May 2016 in the New York Times | Link to Op-Ed

In this op-ed, Sheffler and Glied discuss the increasing concentrated health insurance market in the wake of the Affordable Health Care Act, and the need for competition and regulation to work together to benefit consumers. The two report on research comparing how the states of California and New York designed their healthcare marketplaces in response to the law, and the flexibility states have in designing their marketplaces.

Avoiding Spending While Meeting Patients’ Wishes: A Model of Community-Based Palliative Care Uptake in California from 2014-2022

By Eric R. Kessell, Richard M. Scheffler, and Stephen M. Shortell | Pubished in November 2015 in the Journal of Palliative Medicine | Link to Full Article

Community-based palliative care can improve outcomes and avoid unnecessary spending, but the effects of its widespread adoption on health care spending in California is unknown. To estimate the spending avoided if, by 2022, more than 100,000 Californians received community-based palliative care (CBPC) per year. We estimated the 6-month per-patient spending avoided through three mature CBPC programs in California and extrapolated data to predict the total avoided spending statewide over 8 years if enrollment in the three programs proceeded according to our model. If Californians participated in CBPC in the numbers envisioned, in 2014 there would have been a $72 million reduction in intensive hospital-based care, while still respecting patients’ wishes, and nearly $1.1 billion in spending could be avoided in 2022. Overall hospital spending would be reduced by more than $5.5 billion through 2022. The paper concludes that existing CBPC programs have the potential to provide care that is both in alignment with patients’ wishes and avoids substantial amounts of unnecessary hospital-based spending.

Covered California: The Impact of Provider and Health Plan Market Power on Premiums

By Richard M. Scheffler, Eric R. Kessell and Margareta Brandt | Published in October 2015 in the Journal of Health Politics, Policy, and Law Link to Full Article 

We explain the establishment of Covered California, California’s health insurance marketplace. We describe the market shares of health plans in California and in each of the nineteen rating regions. We examine the empirical relationships among measures of provider market concentration, health plans, and the variation in premiums across the rating regions. We found that the concentration of medical groups and hospitals was positively associated with the variation in Covered California premium rates in the rating regions while the concentration of health plans is not statistically significant. We estimate the impact of reducing hospital concentration to levels that would exist in moderately competitive markets. This produces a predicted overall premium reduction of more than 2 percent. However, in three of the nineteen rating regions, the predicted premium reduction was more than 10 percent. These results suggest the importance of provider market concentration on premiums.

Covered California: A Progress Report

By Richard M. Scheffler and Jessica Foster | Published January 31, 2014 by the Petris Center | Link to Full Report

In its first several months of open enrollment, Covered California despite its challenges has been a bright spot among state health insurance Exchanges created under the Affordable Care Act. About 23% of national enrollments in 2013 came from California. More than 1.4 million California residents have completed Covered California applications, more than 625,000 people have enrolled in subsidized or unsubsidized health plans, and more than 1.2 million are expected to be newly enrolled in Medi-Cal. Though it experienced a slow start in October, Covered California by the end of the year had surpassed its enrollment goal for the first half of open enrollment. This report provides a summary of the Covered California rollout, including a breakdown of application and enrollment trends, plan affordability and cost estimations, and questions and concerns for future analysis.

CPAC Health Insurance Premium Rate Review Regulation: Case Studies to Inform California

by Brent D. Fulton, Richard M. Scheffler | Published April 2012 by the Petris Center and the California Program on Access to Care | Link to Full Report

The objective of this study is to examine health insurance rate review regulation in Minnesota and Massachusetts, to inform California policy-makers regarding evidence on prior approval authority. This evidence is intended to inform California’s proposed change from file-and-use to prior-approval authority, based on AB 52 “Health Care Coverage: Rate Approval.” The methods included reviewing the literature on rate review regulation, interviewing officials from state agencies that approve rates, and interviewing senior actuaries and executives from health insurance carriers. Three interviews were conducted on Minnesota, three interviews were conducted on Massachusetts, and two interviews were conducted on California. Minnesota was selected because it has exercised its prior approval authority for at least 15 years, which provides a long period of time to analyze. Massachusetts was selected because it only began exercising its prior approval authority—technically prior review and disapproval authority—in April 2010, providing an example of a state just starting prior approval rate review.