Assembly Passes AB 1130 (Wood) – Office of Health Care Affordability

Thursday, June 3, 2021

SACRAMENTO—Today, AB 1130, the California Health Care Quality and Affordability Act authored by Assemblymember Jim Wood (D-Santa Rosa), passed the California State Assembly and moves to the Senate.

This bill establishes, within the Office of Statewide Health Planning and Development, the Office of Health Care Affordability (OHCA). This office will analyze the health care market for cost trends and drivers of spending and develop data-informed policies for lowering health care costs for consumers ensuring affordability for consumers and employers by enforcing cost targets.

“The health care marketplace is a free-for-all and costs reflect whatever the market can bear, but it’s the people who can’t bear the impact of these costs and haven’t for a long time,” said Wood. “Costs prevent people from seeking care and we know that every day people delay or even avoid seeking care including cost-effective early intervention and prevention.”

According to the 2020 Health Care Priorities and Experiences of California Residents: Findings from the California Health Policy Survey, conducted by the California Health Care Foundation on how Californians view health care policy and their experiences with the health care system, eight out of 10 residents say that making health care more affordable is an “extremely important” or “very important” priority for the Governor and Legislature to address in 2020.

“Health care has been a front-and-center issue for many years and if you weren’t concerned about it before the COVID-19 pandemic, you are now. We will never be able to provide health care to everyone without controlling costs and we can’t do that unless we first create a process that can gather all those costs, analyze them and establish cost targets,” said Wood. “We’ve been allowing health care costs to grow uncontrollably without any transparency or data about what’s working well and what’s just costing a lot of money.”

This legislation requires virtually all health care entities to provide information, including health care service plans, health insurers, hospitals, and physician organizations, focusing on those groups or entities that are dominant enough in an area that they have a significant impact on pricing. Independent physician practices that do not belong to a group are exempt from the reporting requirements.

“Let’s be clear, this legislation would make this the most comprehensive health care cost containment initiative in the nation,” said Wood. “The breadth of this office’s ability to analyze costs is unprecedented. And that’s exactly why getting it to this point has been the most significant challenge of my legislative career.”

“Every stakeholder in health care has had an opinion about this legislation,” said Wood. “And many of them have said, ‘it’s not us, it’s them.’ They have asked for one amendment after another in an attempt to minimize the impact on them and shift the focus to other players in the health care system. Well, the health care system is comprehensive, complex, and with a great deal of money at stake, our approach needs to involve everyone.”

Six other states that have something in place already, and those efforts have shown results and moderated health care costs.

“Those efforts are not nearly as comprehensive as ours,” said Wood. “We’re looking for better and more meaningful results. I’m well aware of the significant lobbying efforts to modify or defeat AB 1130, and am grateful for and proud of my colleagues who have voted to support it.”

“This is my most important work to date, and everything I have accomplished up to this point in my career as a health care provider and serving as a legislator has given me the perspective to undertake what I believe can lead us to reaching the goal of quality and equitable health care for all Californians,” said Wood.

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