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California has long sought to achieve universal health insurance coverage for its residents. The state's uninsured population was dramatically reduced as a result of the Affordable Care Act (ACA). However, faced with federal threats to the ACA, California is exploring how it might take greater control over the financing of health care. In 2017 the state Senate passed the Healthy California Act, SB-562, calling for California to adopt a single-payer health care system. The state Assembly did not vote on the bill but held hearings on a range of options to expand coverage. These hearings highlighted the many benefits of unified public financing, whether a single- or multipayer system (which would retain health plans as intermediaries). The hearings also identified significant challenges to pooling financial resources, including the need for federal cooperation and for new state taxes to replace employer and employee payments. For now, California's single-payer legislation is stalled, but the state will establish a task force to pursue unified public financing to achieve universal health insurance. California's 2018 gubernatorial and legislative elections will provide a forum for further health policy debate and, depending on election outcomes, may establish momentum for more sweeping change.

California became very successful in controlling rising health care costs by promoting price competition through market-based, managed care policies. However, recent data reveal that the state has not been able sustain its initial success in controlling growth in hospital prices. Two powerful trends emerged in California that eroded the conditions needed to sustain price competition. To ensure timely access to emergency hospital services, government regulators enacted regulations that had the unintended effect of giving hospitals tremendous leverage when contracting with health plans. Also, antitrust authorities allowed hospitals to consolidate into multihospital systems by adding members that were not direct competitors in local markets. The combined effect of these policies and consolidation trends was a substantial reduction in the competitiveness of provider markets in California, which reduced health plans' ability to leverage competitive provider markets and negotiate lower prices and other benefits for their members. Policy makers can and should act to restore competitive conditions.

The Affordable Care Act includes provisions to increase the value obtained from health care spending. A growing concern among health policy experts is that new Medicare policies designed to improve the quality and efficiency of hospital care, such as value-based purchasing (VBP), the Hospital Readmissions Reduction Program (HRRP), and electronic health record (EHR) meaningful-use criteria, will disproportionately affect safety-net hospitals, which are already facing reduced disproportionate-share hospital (DSH) payments under both Medicare and Medicaid. We examined hospitals in California to determine whether safety-net institutions were more likely than others to incur penalties under these programs. To assess quality, we also examined whether mortality outcomes were different at these hospitals. Our study found that compared to non-safety-net hospitals, safety-net institutions had lower thirty-day risk-adjusted mortality rates in the period 2009-11 for acute myocardial infarction, heart failure, and pneumonia and marginally lower adjusted Medicare costs. Nonetheless, safety-net hospitals were more likely than others to be penalized under the VBP program and the HRRP and more likely not to meet EHR meaningful-use criteria. The combined effects of Medicare value-based payment policies on the financial viability of safety-net hospitals need to be considered along with DSH payment cuts as national policy makers further incorporate performance measures into the overall payment system., (Project HOPE—The People-to-People Health Foundation, Inc.)

Safety-net hospitals rely on disproportionate-share hospital (DSH) payments to help cover uncompensated care costs and underpayments by Medicaid (known as Medicaid shortfalls). The Affordable Care Act (ACA) anticipates that insurance expansion will increase safety-net hospitals' revenues and will reduce DSH payments accordingly. We examined the impact of the ACA's Medicaid DSH reductions on California public hospitals' financial stability by estimating how total DSH costs (uncompensated care costs and Medicaid shortfalls) will change as a result of insurance expansion and the offsetting DSH reductions. Decreases in uncompensated care costs resulting from the ACA insurance expansion may not match the act's DSH reductions because of the high number of people who will remain uninsured, low Medicaid reimbursement rates, and medical cost inflation. Taking these three factors into account, we estimate that California public hospitals' total DSH costs will increase from $2.044 billion in 2010 to $2.363-$2.503 billion in 2019, with unmet DSH costs of $1.381-$1.537 billion., (Project HOPE—The People-to-People Health Foundation, Inc.)

Alzheimer's disease and other dementias are chronic, incurable diseases that require coordinated care that addresses the medical, behavioral, and social aspects of the disease. With funding from the Center for Medicare and Medicaid Innovation, we launched a dementia care program in which a nurse practitioner acting as a dementia care manager worked with primary care physicians to develop and implement a dementia care plan that offers training and support to caregivers, manages care transitions, and facilitates access to community-based services. Postvisit surveys showed high levels of caregiver satisfaction. As program enrollment grows, outcomes will be tracked based on the Triple Aim developed by the Institute for Healthcare Improvement and adopted by the Centers for Medicare and Medicaid Services: better care, better health, and lower cost and utilization. The program, if successful at achieving the Triple Aim, may serve as a national model for how dementia and other chronic diseases can be managed in partnership with primary care practices. It may also inform policy and reimbursement decisions for the recently released transitional care management codes and the complex chronic care management codes to be released by Medicare in 2015.

Millions of uninsured Americans rely on hospital emergency departments (EDs) for medical care. Throughout the United States, uninsured patients treated in or admitted to the hospital through the ED receive hospital bills based on what hospitals call "billed charges." These charges are much higher than those paid by insured patients. In 2006 California approved "fair pricing" legislation to protect uninsured patients from having to pay full billed charges. We found that by 2011 most California hospitals had responded to the law by adopting financial assistance policies to make care more affordable for the state's 6.8 million uninsured people. Ninety-seven percent of California hospitals reported that they offered free care to uninsured patients with incomes at or below 100 percent of the federal poverty level. California's approach offers a promising policy option to other states seeking to protect the uninsured from receiving bills based on full billed charges.