New state affordability office sets spending targets and a lower target for 7 high‑cost hospitals, drawing sharp questions from providers and lawmakers

Elizabeth Landsberg, director of the Department of Health Care Access and Information (HCAI), described the Office of Health Care Affordability’s approach to measuring and moderating health‑care spending growth for the Senate Budget Subcommittee No. 3. The office is charged with collecting spending data, reporting total health expenditures and enforcing targets the Healthcare Affordability Board sets.

What OCA proposed

- A statewide five‑year spending growth target adopted by the board: 3.5% in 2025, progressively decreasing to 3.0% in 2029. The board tied the target to median household income growth to link spending growth with what Californians can afford. - A sector‑target approach to identify “high‑cost” hospitals. HCAI’s initial methodology proposed hospitals in the 80th percentile across two measures (commercial unit price and commercial‑to‑Medicare relative price) for 2018–2022. That yielded 11 hospitals initially; after public deliberation the board finalized…