BILL ANALYSIS
AB 2967
Page 1
Date of Hearing: April 8, 2008
ASSEMBLY COMMITTEE ON HEALTH
Mervyn M. Dymally, Chair
AB 2967 (Lieber) - As Amended: March 13, 2008
SUBJECT : Health care cost and quality transparency.
SUMMARY : Establishes a Health Care Cost and Quality
Transparency Committee (committee) to develop and recommend to
the Secretary of Health and Human Services (Secretary) a health
care cost and quality transparency plan (transparency plan).
Requires the Secretary to implement the transparency plan.
Specifically, this bill :
1)Establishes a sixteen-member committee to develop and
recommend to the Secretary a transparency plan designed to
provide public reporting of health care safety, quality, and
cost information, and to monitor the implementation of the
transparency plan. Specifies the type of entity each member
of the committee represents.
2)Requires the committee to meet at least once every two months,
to make its recommendations within one year of its first
meeting, and to fully review the transparency plan at least
once every three years. Requires the committee to appoint at
least one technical committee and one clinical advisory panel,
which must include a majority of clinicians.
3)Requires the transparency plan to provide for collection of
data from health plans and insurers, medical groups, health
facilities, licensed physicians, and other health care
professionals, and to include a process for assessment of
compliance with data collection requirements and a recommended
fee schedule to fund its implementation.
4)Requires the Secretary, within 60 days of receipt of the
transparency plan, to either accept it and develop regulations
to implement it, or refer the transparency plan back to the
committee for further modifications.
5)Requires the Secretary to assure timely implementation of the
transparency plan, including determining the specific data to
be collected, collecting the data, and providing an
opportunity for providers who report data to review, comment
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on, and appeal any outcome report before it is released.
6)Requires the Office of Statewide Health Planning and
Development (OSHPD) to provide the Secretary, after receiving
input from interested stakeholders, with a proposed fee
schedule to be paid by providers to establish and support
implementation of the transparency plan. Makes proposed fees
subject to approval by the Legislature and Governor in the
annual budget.
7)Caps fees imposed on a hospital to fund this bill, and to fund
OSHPD under existing law, at 0.06% of the hospital's operating
costs, as specified. Establishes the Health Care Cost and
Quality Transparency Fund to receive fees and other
contributions to support the implementation of this bill.
8)Requires the Secretary to report to the Legislature every six
years after implementation of the transparency plan, and to
include recommendations concerning continuation of the
committee.
EXISTING LAW :
1)Establishes OSHPD, within the Health and Human Services
Agency, to operate various programs including the health care
information program that collects data and distributes
information on health and health care in California.
2)Requires OSHPD to publish risk-adjusted outcome reports for
all coronary artery bypass graft (CABG) surgeries performed in
the state. Requires the reports to compare risk-adjusted
outcomes by hospital in each year, and by hospital and cardiac
surgeon in every other year. Permits information on
individual hospitals and surgeons to be excluded from the CABG
reports upon the recommendation of the technical advisory
committee based on statistical and technical considerations.
3)Requires OSHPD to publish other risk-adjusted outcome reports
on medical conditions and procedures each year.
4)Requires OSHPD to report the data for surgical procedures by
individual hospital and individual surgeon, unless OSHPD
determines that it is not appropriate to report by individual
surgeon. Permits OSHPD to decide to report nonsurgical
procedures and conditions by individual physician when it is
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appropriate.
5)Includes in the criteria, OSHPD must use in selecting a
condition on which to publish a report, the seriousness of the
health consequences of the procedure or condition, and a
requirement that the risk adjustment model ensure that public
hospitals and other hospitals serving primarily low-income
patients are not unfairly discriminated against.
6)Requires, for each outcome report that includes reporting of
data by an individual physician, OSHPD to appoint a clinical
panel, which is required to have nine members. Requires three
members to be appointed from a list of three or more names
submitted by the physician specialty society that most
represents physicians performing the medical procedure for
which data is collected, three members to be appointed from a
list of three or more names submitted by the California
Medical Association (CMA), and three members to be appointed
from lists of names submitted by consumer organizations.
7)Requires OSHPD, prior to the release of any outcome report
that includes reporting of data by an individual physician, to
furnish a preliminary report to each physician that is
included in the report. Permits a physician who believes that
the risk-adjusted outcome does not accurately reflect the
quality of care provided by the physician to file two levels
of appeal to exclude the physician's data from the report,
first to OSHPD and then, if unsuccessful, to the appropriate
clinical advisory panel.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee. This bill requires OSHPD to develop a provider fee
schedule that would pay for the transparency plan required by
this bill.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, substantial
academic research as well as efforts by purchasers and
purchasing coalitions indicates that high cost care is too
often correlated with bad outcomes, patient deaths, and
unnecessary care. The author cites reports of unnecessary
cardiac surgeries and hysterectomies, avoidable hospital
infections, and other medical errors. According to the
author, it is time for California to create a system that
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provides the data to hold doctors, hospitals, and other key
healthcare system elements accountable for cost and quality.
The author believes that this bill will provide data that
purchasers can use to seek more cost-effective care that will
improve patient outcomes and give doctors, hospitals, and
other care providers the data to do a better job for patients.
The author argues that this bill creates a system that will
evolve along with medical science and will responds to
purchasers, consumers, and labor rather than being driven by
the industry on which it reports. According to the author,
other states have extensive public reporting on health care
cost and quality. As an example the author cites the
Pennsylvania Health Care Cost Containment Council (Council),
which has online full financials for every hospital, as well
as physician-specific reporting on various surgical
procedures.
2)BACKGROUND . This bill is essentially identical to the health
care cost and quality transparency provisions in AB1 X1
(Nunez), the health care reform bill that died in the Senate
Health Committee in January 2008. AB 8 (Nunez) of 2007, a
health care reform bill that was vetoed by the Governor, also
included cost and quality transparency provisions.
3)PENNSYLVANIA HEALTH CARE COST CONTAINMENT COUNCIL . The
Pennsylvania Health Care Cost Containment Council (Council) is
an independent state agency with three primary
responsibilities: a) to collect, analyze and make available to
the public data about the cost and quality of health care in
Pennsylvania; 2) to study, upon request, the issue of access
to care for those Pennsylvanians who are uninsured; and, 3) to
review and make recommendations about proposed or existing
mandated health insurance benefits. The Council collects over
3.8 million inpatient hospital discharge and
ambulatory/outpatient procedure records each year from
hospitals and freestanding ambulatory surgery centers in
Pennsylvania. This data, which includes hospital charge and
treatment information as well as other financial data, is
collected on a quarterly basis. The Council also collects
data from managed care plans on a voluntary basis. The
Council shares this data with the public through free public
reports. The Council states that it has published hundreds of
public reports about health care in Pennsylvania that are
available on the Council's Web site, www.phc4.org, and in most
public libraries throughout the state. The Council also
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produces customized reports and data sets for a variety of
users including hospitals, policy-makers, researchers,
physicians, insurers, and other group purchasers. The Council
is funded through the Pennsylvania state budget and receives
additional revenue from the sale of its data to health care
stakeholders within and outside of Pennsylvania.
4)SUPPORT . The Service Employees International Union (SEIU),
sponsor of this bill, argues that one of the most important
steps in controlling health care costs is to go after high
cost care that also does not improve outcomes. According to
research by SEIU, California spends literally billions of
dollars on care that lacks value. SEIU argues that we need
the data to fix this and it needs to be data that allows
continuous improvement in quality and cost. According to
SEIU, OSHPD's current activities in collecting data are
hampered by outdated computer systems, data formats that are
unintelligible to the general public, cost data that are
unrelated to quality data, and a governance structure that
assures that physicians and hospitals are able to delay
reporting of data, making it less usable, less frequent, and
less comprehensible. Other supporters argue that this bill
includes a governance structure with a majority of employers,
consumers, and labor representatives that will represent
payers and patients; a continuous improvement plan; and,
scientific reporting. Supporters also argue that this bill
will create real transparency in the health care system and
put California on the path toward rational health care
purchasing decisions.
5)OPPOSITION . CMA argues in opposition that this bill will
create a new bureaucracy within state government and add new
administrative burdens to provider practices, thereby
increasing system costs and inefficiencies especially for
small and solo providers. CMA also argues this bill will give
a new committee of political appointees and the administration
expansive new powers without any legislative oversight. CMA
believes that OSHPD already has a successful outcomes
reporting program and has the authority to measure and report
at the individual physician level for any surgical or
non-surgical conditions or procedures. CMA argues that it
doesn't make sense to start from scratch and build an entirely
new system, rather than building on the system already in
place. According to CMA, this bill could create an incentive
for a physician not to care for the hardest to treat patients,
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such as non-English speakers, those in poverty, or those
suffering from mental illness, in order to keep the
physician's outcome results high. CMA also argues that this
bill does not ensure that outcomes measurements and medical
benchmarks will be determined by experts, ultimately leaving
these decisions in the hands of political appointees, not
clinicians. The Howard Jarvis Taxpayers Association argues
that this bill will make it tougher for private health care
providers to continue to provide quality service and that the
tax on hospitals to support this bill will lead to more
hospital closures and more expensive care.
REGISTERED SUPPORT / OPPOSITION :
Support
Service Employees International Union (sponsor)
AARP
American Federation of Television & Radio Artists
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Labor Federation
California School Employees Association
California Teamsters Public Affairs Council
CALPIRG
Congress of California Seniors
Consumers Union
Engineers and Scientists of California
Having Our Say Coalition
Health Access California
International Longshore & Warehouse Union
Pacific Business Group on Health
Professional & Technical Engineers, Local 21
Small Business California
Strategic Committee of Public Employees, LIUNA
UNITE HERE!
United Food and Commercial Workers Union, Western States Council
Opposition
California Medical Association
California Society of Anesthesiologists
Howard Jarvis Taxpayers Association
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Analysis Prepared by : John Gilman / HEALTH / (916) 319-2097