BILL ANALYSIS Ó AB 2345 Page 1 Date of Hearing: April 27, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 2345 (Ridley-Thomas) - As Amended April 18, 2016 ----------------------------------------------------------------- |Policy |Health |Vote:|19 - 0 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill 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, and requires the Commission report its findings to the Assembly and Senate Committees on Health every two years, as specified. It also: 1)Allows the Department of Managed Health Care (DMHC) to accept voluntary contributions to pay for the costs of operation of the Commission. AB 2345 Page 2 2)Creates the Health Care Affordability Fund and 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. 3)Sunsets on January 1, 2020 if sufficient voluntary contributions are not available, and sunsets in January 1, 2025 if sufficient voluntary contributions are available. FISCAL EFFECT: 1)Unknown, significant cost pressure, likely in the low millions annually for staff and contract costs to support the commission (Health Care Affordability Fund, funded by private donations). For comparative purposes, the California Health Benefits Review Program (CHBRP), which has a narrower mission than the commission envisioned by this bill, has an annual budget of $2 million. A health policy commission with more expansive duties in Massachusetts has a budget of about $10.5 million, about one-third of which is attributed to market review activities similar to those envisioned by the bill. 2)Minor administrative costs to DMHC to establish and administer funds to create the commission (Managed Care Fund). COMMENTS: 1)Purpose. According to the author, legislators do not have adequate information to respond to the myriad of policy concerns regarding health care. The author states the intent of this bill is to enhance the information available to AB 2345 Page 3 legislators, in order to assist them in identifying and responding to issues related to cost, coverage, and access to services. The California Primary Care Association has expressed support and the bill has no opposition. 2)Current California efforts. As of 2013, health care accounted for 12% of California's Gross State Product. Pursuant to Governor Brown's Executive Order B-19-12 on May 3, 2012, California established the Let's Get Healthy California Task Force under the Secretary of the Health and Human Services Agency to develop a 10-year plan for improving the health of Californians, controlling health care costs, promoting personal responsibility for individual health, and advancing health equity. The Secretary convened a task force and issued a report, and recently unveiled a website to track progress towards health goals. Various types of state health policy decisions are also made by the CoveredCA Board, CalPERS for health benefits for government workers, and the Department of Health Care Services, often with stakeholder input. CHBRP is housed within the University of California Office of the President and is tasked with reviewing the costs, medical effectiveness, and public health impacts of legislation that proposes to institute or repeal health insurance benefit mandates. Private foundations regularly commission health policy reports and issue related recommendations. Recent studies have discussed regional market reviews, surveys of access to health care in Medi-Cal, and other issues. However, the state does not have a centralized commission to review issues relating to health care costs, coverage, and access broadly. 3)Other states. Colorado, Maryland, and Massachusetts have AB 2345 Page 4 established health policy commissions. Maryland's commission appears to focus on hospital care. Colorado's is envisioned as a one-time commission tasked with specific recommendations, while the commission in Massachusetts determines the state's health care cost growth benchmark, assesses market performance, and researches cost trends, as well as other activities. 4)Prior legislation. AB 1801 (Pacheco) of 2002 created the Commission on Health Care Cost Review and 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 not in any policy Committee. 5)Related legislation. SB 1159 (Hernandez), currently pending in Senate Health Committee, requires 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 also requires 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. Analysis Prepared by:Lisa Murawski / APPR. / (916) 319-2081 AB 2345 Page 5