SB 598 threatens California small businesses with higher health care costs

Stethoscope and calculator, image by Michail Petrov

OPINON – California business owners are facing mounting difficulties amidst the challenging 2023 business landscape. Rising inflation has led to soaring healthcare costs for businesses and compounding these challenges is SB 598, a bill currently under consideration in the California Legislature. If enacted, it would further burden businesses, especially small businesses, with additional costs while introducing low-value care into the state’s healthcare system, harming patients across California.

One of the key provisions of SB 598 is the dismantling of prior authorization, a vital tool used in limited circumstances to maintain affordable healthcare costs and ensure high-quality and safe patient care. Prior authorization serves as a critical oversight mechanism for healthcare providers, prioritizing evidence-backed procedures and avoiding unnecessary, expensive, and potentially harmful treatments.

For the small businesses, including businesses my Chamber represents in Downtown Los Angeles, providing healthcare remains one of the most significant costs, impacting the ability to attract talented employees and grow payrolls. Managing rising healthcare costs is not a welcome burden, especially in the many neighborhoods still recovering from the pandemic’s impact like downtowns and business districts. While lawmakers acknowledge the need for relief from rising prices, they are not prioritizing legislation and policies that would effectively reduce the cost of healthcare. Instead, bills like SB 598 would further increase healthcare expenses for small businesses and their employees without delivering improved affordability or quality of care.

SB 598 essentially grants healthcare providers a free hand to prescribe treatments and medications, even those often associated with fraud and abuse, without any oversight or review. This can result in higher healthcare premiums for businesses without providing any additional value to employers or employees. As a result, employees would not see improved healthcare quality even as healthcare premiums rise for small businesses.

Managing rising healthcare costs is not a welcome burden, especially in the many neighborhoods still recovering from the pandemic’s impact like downtowns and business districts.

Moreover, patient risks abound in the absence of prior authorization. Shockingly, one in four children prescribed antibiotics in hospitals receives incorrect prescriptions, while up to 20% of echocardiograms in the US are rarely appropriate according to established guidelines. Prior authorization acts as a crucial check to limit dangerous, expensive, and wasteful misdiagnoses.

Opposition to SB 598 is not limited to small businesses and other business organizations. America’s Physician Groups also opposes the bill, as they have witnessed firsthand the cascades of unnecessary care that did not lead to clinically meaningful outcomes yet caused harm to patients physically and financially. The voices of these organizations make it clear that the legislation fails to align California’s lofty healthcare affordability goals and legislative outcomes.

In conclusion, it is imperative for the California legislature to halt the progress of SB 598 to protect small businesses from increased healthcare costs. This deeply flawed legislation reduces oversight, promoting excessive treatments that drive up premiums and compromise the safety of California’s patients. Small businesses, chambers of commerce, health plans, business groups, and physicians’ groups are in agreement – SB 598 would lower the value of care that Californians expect and deserve.

Claudia Oliveira is the CEO of Downtown Los Angeles Chamber of Commerce

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