Oct 15, 2018

In California's blue utopia, liberal health care dreams stagnate

California Gov. Jerry Brown. Photo: Stephen Lam/Getty Images

Even in California, one of the nation's most liberal states, industry pressure and moderate lawmakers have stymied ambitious efforts to control health care costs.

Why it matters: As the national Democratic Party swings left on health care, California shows that even with strong liberal majorities, it's still an uphill battle to successfully chip away at the health care industry's bottom line.

Details: Even aside from California's failed single payer bill, more substantively realistic proposals have hit roadblocks, too.

  • The biggest of these was a controversial bill that would have regulated prices for health care services within the private insurance system.
  • That bill passed through committee in the state assembly, but then was shelved. It faced fierce opposition from doctors and hospitals, but the bill's sponsor said that he'd draft a new version of the bill next year, per the LA Times.
  • Carmela Coyle, president and CEO of the California Hospital Association, told reporters last week that it's unlikely that lawmakers will come up with a bill that's palatable to hospitals.
  • "Any attempt to control prices will bring the health care industry out in force," the Kaiser Family Foundation's Larry Levitt said. "Politically speaking, there likely needs to be some counterweight to hospitals and doctors for that effort to succeed."

An ambitious bill to cap dialysis payments also died, after Gov. Jerry Brown vetoed it late last month. The dialysis industry is now working to defeat a related ballot initiative that would cap dialysis clinics' profits.

There are exceptions. California has passed laws regulating pharmacy benefit managers, requiring a justification for prescription drug price hikes above a certain amount, and creating more oversight of health plan mergers.

Yes, but: California has so far had a lot more success expanding coverage and defending the Affordable Care Act than in controlling costs — widely seen as the next big health care debate.

  • The state has banned short-term health plans, and limited the use of association health plans.

What's next: California lawmakers will likely continue to duke it out over high-profile efforts like the all-payer bill, but they will also continue to focus on coverage-related issues, like increasing the Affordable Care Act's subsidies.

  • “The big question, I think, is going to be, how do discussions happen in the next two years to lay the groundwork for...the next administration federally?" said Covered California's Peter Lee. "Whether or not California pulls out its wallet...we’ll see. Will that information help thinking for 2020 and beyond? We think so.”
  • Some advocates are also hoping for a big change from Gavin Newsom, who's expected to win the governor's race this year. Newsom is seen as more liberal than Brown.

"There are now high expectations for what a new governor might do beginning next year," Levitt said.

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