The growing cost of health care continues to vex state policymakers

In a sign of the times, Capitol Weekly’s annual health care conference on Thursday focused broadly on expenses and efficiency, befitting for an American health care system that has become one of the most expensive in the world.

Keynoting the event was Assemblyman Jim Wood (D-Healdsburg), the former longtime chairman of the Assembly Health Committee, who noted that there are some estimates that 20 to 30 percent of health care spending is wasted.

“There’s a lot of waste in the system because there’s usually a third party paying the bills,” he lamented.

Wood also spoke about the growing influence of private equity in healthcare and the concerns inherent in its tendency to consolidate and “gobble up” small practices and other entities.

“It’s multiple transactions that lead to less competition within a geographic area … which can lead to because of the nature of these rollups … put debt on the entity,” he said. “And because there is debt there is a perverse incentive for the entity to start churning services.”

The day began with a panel about the use of artificial intelligence in health care, with a lineup of Kara Carter, senior vice president of strategy and programs at the California Health Care Foundation; Sam Chung, vice president of state government relations for California Life Sciences; Dr. Matthew Solomon of Kaiser Permanente; and Chris Waugh, Sutter Health’s first chief innovation officer, speaking about how advances in technology are improving care from offering more efficient medical records to developing drugs more quickly.

“You are able to rely on AI technology to really speed up that discovery process,” Chung said.

Universally, the panel touted the potential AI has to ensure that medical care is better, cheaper, more equitable and more efficient on numerous fronts.

“This is really powerful stuff,” Waugh said.

Still, it was clear from the discussion that we’re only in the beginning chapters of the deployment of AI into the healthcare system.

“Innovation moves at the speed of trust,” Carter said, “and trust is sometimes slow.”

Next up was a panel on the new state Office of Health Care Affordability, established in 2022 to transition the Golden State to a lower-cost health care system. Panelists Ben Johnson, a vice president of the California Hospital Association; Lynne Kinst, executive director of the Hemophilia Council of California; Elizabeth Mitchell, president and CEO of the Purchaser Business Group on Health; and former State Sen. Dr. Richard Pan, a member of California Health Care Affordability Board spoke about the opportunity this new office represents to offer more affordable medical services in the Golden State.

“We are engaging heavily with this new Office of Health Care Affordability,” Johnson said. “We agree affordability remains a significant challenge.”

But he and others noted that they didn’t want to see affordability trump patient care and access in terms of importance to the medical system.

“Access and quality are our top priorities,” Mitchell said, adding that studies have found that better access to health care leads to lower costs. “I think it’s a false choice that we’re talking about access versus affordability.”

Said Pan, “you’ll know when a health plan is successful when it seeks out patients with chronic conditions, because right now our system depends on having a system loaded with healthy people, not sick ones.”

“That’s our opportunity I see with this office … to create that incentive,” he said.

Finishing the day was a panel on the impact the recent state budget shortfall might have on health care in California. Jess Bartholow, director of Government Relations for SEIU California; Michelle Cabrera, executive director of the County Behavioral Health Directors Association of California; Beth Capell, lobbyist for Health Access California; and Scott Graves, budget director of the California Budget and Policy Center, discussed the constraints that the budget have inflicted upon the Golden State’s healthcare system.

Graves opened the conversation by warning that “much of what we see as coming in as better than expected revenues” can’t be counted towards an increase to healthcare spending, because of budgetary constraints like Proposition 98.

Still, Capell said it was impressive that the administration and legislature were able to avoid severe cuts to the healthcare system during this latest round of budget negotiations.

“It’s never fun to face a difficult budget,” she said, “but for those of us went through the really dark years of 2008, 9, 10, it’s really good to be in a better place.”

Bartholow praised the “creative” budgeting employed this year.

“We rejected austerity as a path forward,” she said, adding, “Not having health care is one of the most inhumane experiences.”