BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  April 27, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


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


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          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. 









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          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  








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            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  








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            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










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