BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  April 12, 2016


                            ASSEMBLY COMMITTEE ON HEALTH


                                   Jim Wood, Chair


          AB 2345  
          (Ridley-Thomas) - As Amended March 18, 2016


          SUBJECT:  Commission on Health Care Cost Review.


          SUMMARY:  Creates the Commission on Health Care Cost Review  
          (Commission) to study and analyze public policies relating to  
          health care costs and access to health care coverage.  
          Specifically, this bill:  


          1)Creates the Commission consisting of five members, in which  
            three members are appointed by the Governor, one member is  
            appointed by the Senate Committee on Rules, and one member is  
            appointed by the Speaker of the Assembly.  Specifies that each  
            member will serve a term of four years and each member will  
            not receive compensation.  


          2)Requires the Commission to study and analyze public policies  
            affecting health care costs and access to health care coverage  
            in California and report its findings to the Assembly and  
            Senate Committees on Health every two years in a report, as  
            specified.


          3)Allows the Department of Managed Health Care (DMHC) to accept  
            voluntary contributions to pay for the costs of operation of  








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            the Commission and such voluntary contributions will be  
            deposited into the Health Care Affordability Fund, which is  
            created in the State Treasury, as specified.  Requires that  
            implementation of the Commission is contingent upon a  
            determination by the DMHC that sufficient voluntary  
            contributions exist or will exist in the Health Care  
            Affordability Fund.  


          EXISTING LAW:  


          1)Establishes the California Health Benefit Review Program  
            (CHBRP) to assess legislation that proposes to mandate or  
            repeal a mandated health benefit or service.  

          2)Regulates health plans under the Knox-Keene Health Care  
            Service Plan Act of 1975 through the DMHC and regulates health  
            insurers under the Insurance Code through the California  
            Department of Insurance.

          3)Establishes various programs relating to health policy and  
            planning, including the Advisory Committee on Managed Health  
            Care and the Clinical Advisory Panel in the DMHC.  


          FISCAL EFFECT:  This bill has not yet been analyzed by a fiscal  
          committee.  


          COMMENTS:  


          1)PURPOSE OF THIS BILL.  According to the author, legislators do  
            not have adequate information to respond to the myriad of  
            policy concerns regarding the health care industry.  Consumers  
            are faced with difficulties in finding a contracted provider.   
            The author contends that providing the Legislature with timely  
            analysis of those accessibility issues and related  








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            recommendations as well as information about the types of  
            policies available and how they affect price would give policy  
            makers a holistic understanding of this complicated area so  
            they can make better decisions for their constituents.  The  
            author also states that this bill is necessary so members of  
            the legislature can better understand the larger policy  
            context of the health care industry so they can make informed  
            decisions about particular aspects of the system.  For  
            example, as recent changes to the federal and state health  
            care system are still working their way through down to  
            consumers, issues related to the cost of coverage and access  
            to services still plague many communities.  The author states  
            that the intent of this bill is to identify the cause of these  
            and other larger issues so meaningful and direct action can be  
            taken by the legislature.


            The author notes that some may argue that this bill  
            establishes a Commission to perform the same functions as  
            CHBRP, however the author notes that the aim of the Commission  
            is to provide a comprehensive analysis of any policy affecting  
            health care cost and access to coverage and make related  
            recommendations to improve those areas. According to the  
            author, CHBRP does not provide policy recommendations.  CHBRP  
            provides valuable information; however its conclusions are  
            academic in nature and only relate to pending legislation.   
            The information provided by the Commission would go beyond  
            pending legislation proposing to mandate or repeal a benefit  
            or service to address things including, but not limited to,  
            gaps in access, regional trends, healthy communities, and  
            social determinants of health and provide related policy  
            recommendations.


          2)BACKGROUND.  


             a)   CHBRP.  Existing law establishes CHBRP to assess  
               legislation that proposes to mandate or repeal a mandated  








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               health benefit or service.   It also requests the  
               University of California to provide the analysis to the  
               appropriate policy and fiscal committees of the Legislature  
               within 60 days after receiving a request for the analysis.   
               This analysis would include relevant data discussing  
               impacts to public health, medical and financial, as  
               specified.  SB 125 (Hernandez), Chapter 9, Statutes of  
               2015, expanded this request to include impacts on essential  
               health benefits and on the California Health Benefit  
               Exchange in the analysis prepared under the program.  SB  
               125 further requested that the University of California  
               assess legislation that impacts health insurance benefit  
               design, cost sharing, premiums, and other health insurance  
               topics.  SB 125 extended the operative date of the program  
               and the fund, including the annual charge on health care  
               service plans and health insurers, to June 30, 2017 and  
               would repeal the described provisions as of January 1,  
               2018.


             b)   Little Hoover Commission.  The Little Hoover Commission  
               (Commission) on California State Government Organization  
               and Economy, is an independent state oversight agency that  
               was created in 1962.  Its mission is to investigate state  
               government operations - through reports recommendations and  
               legislative proposals - promote efficiency, economy and  
               improved service.  The Commission selects study topics from  
               citizens, legislators and other sources and explore how  
               programs could and should function in today's world.  The  
               Commission also produces in-depth, well-documented reports  
               that serve as a factual basis for crafting effective reform  
               legislation.  


             c)   Covered California and Other States.  California's  
               Health Benefit Exchange (also referred to as Covered  
               California) is currently considering amendments to its  
               Qualified Health Plan (QHP) contracts with QHP issuers to  
               develop and implement policies and practices that will  








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               promote the Triple Aim (seeking to lower costs, improve  
               quality, and improve health outcomes), impacting not just  
               the enrollees of Covered California but the QHP's entire  
               California membership. Based upon the description of this  
               amendment, QHP Issuers have the opportunity to take a  
               leading role in helping Covered California support new  
               models of care which promote the vision of the Affordable  
               Care Act and meet consumer needs and expectations.


               In Colorado, the Colorado Commission on Affordable Health  
               Care has a three year mission to analyze health care costs  
               and make policy recommendations to its Legislature and  
               governor for lowering health care costs in the state.  The  
               Colorado Commission is expected to complete its work and  
               submit a report to the Colorado General Assembly and  
               Governor's Office in late 2017.



               In Massachusetts, the Massachusetts Health Policy  
               Commission (HPC) is an independent state agency that  
               develops policy to reduce health care cost growth and  
               improve the quality of patient care.  The HPC's mission is  
               to advance a more transparent, accountable, and innovative  
               health care system through its independent policy  
               leadership and investment programs.  The HPC's goal is  
               better health and better care at a lower cost across the  
               Commonwealth.  The HPC's main responsibilities include  
               monitoring the performance of the health care system;  
               analyzing the impact of health care market transactions on  
               cost, quality, and access; setting the health care cost  
               growth benchmark; and, investing in community health care  
               delivery and innovations.
               In Maryland, the Health Services Cost Review Commission  
               (HSCRC) is an independent state agency with seven  
               Commissioners appointed by the Governor.  The HSCRC was  
               given broad responsibility regarding the public disclosure  
               of hospital data and operating performance and was  








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               authorized to establish hospital rates to promote cost  
               containment, access to care, equity, financial stability  
               and hospital accountability.


          3)SUPPORT.  The California Primary Care Association states that  
            it is important to fully understand how to improve access to  
            care and this commission is one way to achieve this goal.  


          4)PREVIOUS LEGISLATION.  AB 1801 (Pacheco) introduced in 2002  
            would have created the Commission on Health Care Cost Review  
            and would have required the commission to study and report to  
            the Legislature and the Department of Finance on specified  
            matters, including the public policies affecting health care  
            costs and access to health care coverage in California.  AB  
            1801 was never heard in the Health Committee.  


          5)RELATED LEGISLATION.  


             a)   SB 1159 (Hernandez) would require the Secretary of  
               California Health and Human Services to convene an advisory  
               committee composed of a broad spectrum of health care  
               stakeholders and experts, as specified, to, among other  
               things, develop the parameters for establishing,  
               implementing, and administering a health care cost and  
               quality database. SB 1159 would require the secretary to  
               arrange for the preparation of an annual report to the  
               Legislature and the Governor that examines and addresses  
               specified issues, including, among others, containing the  
               cost of health care services and coverage. SB 1159 would  
               provide that members of the committee not receive a per  
               diem or travel expense reimbursement, or any other expense  
               reimbursement.  Currently pending in Senate Health  
               Committee.  










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             b)   AB 1764 (Waldron) would additionally request the  
               University of California to include as part of its CHBRP  
               financial impact analysis, relevant data on the impact of  
               coverage or repeal of coverage of the benefit or service on  
               anticipated costs or savings estimated upon implementation  
               for the two subsequent state fiscal years and, if  
               applicable, for the five subsequent state fiscal years, as  
               specified.  Currently pending in Assembly Health Committee.  
                


          6)POLICY COMMENTS.  This bill would create a Commission to study  
            and analyze public policies affecting health care costs and  
            access to health care coverage in California and will report  
            its findings to the Assembly and Senate Committees on Health  
            every two years in a report.  The Health Committee may want  
            the author to address the following:


             a)   Scope of the Commission's review and whether the  
               Commission is tasked with a specific issue like Colorado or  
               meant to address issues that arise from legislation or  
               questions from the Assembly and Senate Committees on Health  
               and whether the Commission acts as an advisory committee.  


             b)   Report requirements, if any, and whether this  
               information should include clinical studies, actuarial  
               information, or information from different stakeholders.  


             c)   Commission members' background and expertise, if any.


             d)   Impact of report findings, specifically with respect to  
               the authority of the Commission and how the report or the  
               Commission impacts pending legislation or how bills are  
               introduced.  









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             e)   How often should the Commission meet and will the  
               Commission have support staff.  


             f)   Inclusion of a sunset clause of two years.  


          REGISTERED SUPPORT / OPPOSITION:




          Support


          California Primary Care Association




          Opposition


          None on file.




          Analysis Prepared by:Kristene Mapile / HEALTH / (916) 319-2097

















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