California wrestles with key decision on the future of health reform

Published on
September 20, 2018

After years of pursuing ambitious health reforms under the mantle of the Affordable Care Act, California now stands at a crucial crossroads.

State leaders are staring down two big options: Continue with incremental change that builds on and protects the ACA, or push for a single-payer system to bring about universal coverage. That’s what leading economists, stakeholders, health care providers and other experts concluded this week when they gathered at the RAND Corporation in Santa Monica for an in-depth look at “Health and Health Care in California.” The gathering was organized by the health policy journal Health Affairs, whose September special issue focuses on the lessons learned from the bellwether state.

California can claim much success in its efforts to implement the ACA. The state’s uninsured rate fell to 7 percent last year, a 10 percent drop from 2013, the largest in the nation. Medi-Cal, the state's version of Medicaid, now covers more than 13 million people, including childless individuals and undocumented children.

But California’s size, social and economic disparities, and highly consolidated health care systems pose big challenges for further attempts to expand coverage or control costs. The Trump Administration’s attempts to repeal the ACA also loom large.

 “If we want to talk about health, we need to be talking about social determinants as well, not just about health care,” said Michael Wilkening, secretary of the California Health and Human Services Agency. “We need to talk about how to keep people out of health care.”

One such approach to keeping people out of hospitals is a program called Be There San Diego. A coalition of physicians and service providers have fanned out all over San Diego County since 2010 to focus on patients most at risk of heart attacks and strokes. A study of the program in Health Affairs found that, from 2011 to 2016, an estimated 3,826 heart attacks were avoided, according to Dr. Christine Thorne, the program’s medical director. She estimates the program saved $85.8 million in health care costs during that five-year period.

But while that program is touted as a success, larger forces in the health care industry can derail such efforts to improve outcomes and reduce costs.

Community hospitals and physician practices, for example, have been steadily bought up by large health systems, leading to a lack of competition and higher costs. Health care premiums are 30 percent higher in the Bay Area compared to the southern half of the state because of the consolidation trend, said health care economist Richard Scheffler of the University of California, Berkeley.

California’s drug transparency law, meanwhile, continues to face ongoing lawsuits from pharmaceutical companies. Passed in 2017, Senate Bill 17 requires prescription drug companies to provide a 60-day advance notice and explanation for any price hike of more than 16 percent in a two-year period. Drug companies have called that provision unconstitutional on the grounds that it violates the little-known “dormant commerce clause,” explained Jaime King, associate dean and faculty director of the University of San Francisco’s Hastings Consortium on Science, Law and Health Policy. The legal challenges states face in passing such laws are formidable, she added, and SB 17 remains tied up in the courts.

Access to services also remains a concern, a result of primary care physician shortages in many parts of the state. Compared to other states, California has not updated its laws to allow nurse practitioners to expand the scope of care they can deliver, said Ulrike Muench, an assistant professor at UCSF’s School of Nursing. Even if more primary care physicians were added, there would still be a shortfall of 5,000 doctors by 2025, Muench said.

“California is the only western state that has nurse practitioner restrictions,” Muench added.

Meanwhile, at the community level, efforts to expand family planning services to more women have lagged, said Dawnté Early, president and CEO of Early Research and Consulting. Early said her research found that while the state’s Medicaid expansion covered more low-income women, an estimated one in every three of them continued to have unmet contraceptive needs or access to family planning services.

“Obviously, this is disappointing,” Early said. “It means that more work is needed.”

“California produces a lot of ideas,” and much can be learned from its failures as well, said Walter Zelman, professor and chair of the Department Public Health at California State University, Los Angeles.

The momentum has to be there to make historic health policy changes, Zelman said. Pointing to the state’s surfing culture as a metaphor, Zelman said, “You have to be in the position to catch it and once you catch it, know how to ride it,” he said.