California governor proposes office to curb hospital, physician, payer costs

California Gov. Gavin Newsom wants to tackle the state's rising healthcare costs by creating the Office of Health Care Affordability, according to ABC News.

The goal of the proposed office would be to regulate costs set by hospitals, physicians' offices and payers. The state would also have the power to impose major fines for violations.

From 2002-17, monthly health insurance premiums for privately insured Californians rose 249 percent, according to an analysis by the California Health Care Foundation. In 2021, about half of Californians said they skipped or delayed a healthcare service because they could not pay for it.

''This elevates a very important, what I like to call, 'single-payer principle,' which is take control of costs and create a great deal of transparency on what consumers are getting,'' said Mark Ghaly, MD, secretary of the California Health and Human Services Agency.

The proposed office is expected to gather data from the state's healthcare system, but much of it would remain private to protect sensitive information. The governor and California General Assembly would appoint eight experts to a board that would set cost targets in regions across the state.

Though California is proposing arguably the most far-reaching state healthcare office, Massachusetts, Rhode Island, Maryland and Oregon currently have similar departments. 

''We are continuing to work with lawmakers to address our concerns. We will consider our position when the proposal comes up for its next hearing," a California Hospital Association spokesperson said in a statement to Becker's Hospital Review.

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