Eight details:
- The California Office of Health Care Affordability established a 15% benchmark for primary care spending in October, up from the current 7%. The goal is to strengthen the primary care workforce, which would in turn enhance residents’ access to care and reduce the need for costlier healthcare services in the future.
- “It’s ambitious but achievable,” Elizabeth Landsberg, director of the state’s Department of Health Care Access and Information, which includes the affordability office, told the news outlet. “Plans and health systems need time to build the infrastructure to really change the way they’re providing care.”
- Under the newly set target, health plans will be expected to increase primary care spending from 0.5% to 1% of their total medical spend annually to reach the 15% target. The agency will begin collecting data on health plans’ annual primary care spending next year.
- Six months ago, the same agency set a 3.5% cap on annual healthcare spending growth, raising questions among health plans about how these policies will align.
- “How these two policies will interact is unclear and we believe it is important to not lose sight of our overall goal of reducing the growth of healthcare costs,” Mary Ellen Grant, a spokesperson for the California Association of Health Plans, said in a statement to KFF Health News.
- Since the affordability agency lacks authority to enforce the spending target, it is leaning on financial incentives to encourage health plan compliance. For instance, insurers may exceed the 3.5% cap on overall spending growth if they demonstrate increased primary care spending.
- A handful of states have implemented primary care spending targets, including Rhode Island, which set a nearly 11% target. In that state, primary care spending doubled from 2008-18, while overall healthcare spending fell, according to KFF Health News.
- California is also considering a spending target for behavioral health, with a vote expected in summer 2025.
