The Office of Health Care Affordability (OHCA) was established by California’s Health Care Quality and Affordability Act as part of the 2022–23 State budget to address rapidly rising healthcare costs and improve affordability for consumers and purchasers...
A core mechanism in OHCA’s strategy is the establishment of healthcare cost growth targets designed to cap the annual rate of increase in per capita healthcare expenditures across the system. In April 2024, the Health Care Affordability Board (Board) approved a target that starts at 3.5 percent annual growth for 2025 and 2026, declines to 3.2 percent for 2027–28, and ultimately reaches three percent by 2029, aligning spending growth with typical household income growth...
The Board identified seven hospitals as high-cost hospitals based on a pricing analysis and set lower spending targets for these facilities (1.8 percent in 2026, 1.7 percent in 2027–28, and 1.6 percent in 2029). Annually, OHCA will update the list of hospitals meeting the high-cost criteria and the factors used in that determination. UC hospitals are included in the hospital sector, and none have been designated as high-cost hospitals... [underline added]
Enforcement of spending caps could strain hospital finances if reimbursement and operational costs continue to rise faster than permitted spending levels...
Full Regents item at https://regents.universityofcalifornia.edu/regmeet/mar26/h1.pdf.
As blog readers will know, UCLA has been adding to its hospital enterprise at a time when increased cost controls and scrutiny of costs are being imposed.
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