San Francisco Marin Medical Society Blog

CMA Defeats Dangerous Rate Setting Proposal

AB 3087 would have decimated California’s health care delivery system

In late May, the California Medical Association (CMA) killed a reckless legislative proposal that would have put a new government bureaucracy in charge of health care. Assembly Bill 3087 (Kalra) would have created a commission of unelected political appointees empowered to arbitrarily cap rates for all health care services in all clinics, hospitals and physician practices in California. By unilaterally setting the price for all medical services, the bill would have essentially eliminated the commercial health care market in California.

A Groundswell of Physician Opposition

Key to the bill’s demise was a groundswell of physician opposition. Through CMA’s Grassroots Action Center, thousands of physician members contacted their legislators because AB 3087 would have:

• Decimated California’s health care delivery system.
• Disrupted care and limited choice for millions of California patients.
• Caused 175,000 health care workers to lose their jobs.
• Forced hospitals to close and pushed health care providers into early retirement
• Caused a “brain drain” of talented medical students and residents fleeing California for more ideal working conditions.

The Wrong Answer to a Real Problem

This dangerous rate setting proposal would have also moved California away from value-based care and universal access, backwards to an antiquated fee-for-service model that discourages contracting and stifles innovation. Instead of addressing the underlying issues, this bill would have forced hospitals to close, pushed health care providers into early retirement and caused a “brain drain” of talented medical students and residents fleeing California for more ideal working conditions.

AB 3087 Did Not Address Medi-Cal Rates

California’s Medi-Cal rates don’t come close to covering the cost of providing care—meaning that physicians lose money for every Medi-Cal patient they serve. Due to low Medi-Cal rates, physicians must make up revenue through their commercial contracts to keep their doors open. Because the AB 3087 proposal did nothing to address California’s sub-standard Medi-Cal rates, hospitals and health care providers would have continued to be underpaid by these governmental programs, putting them in an untenable situation.

AB 3087 Would Have Driven California’s Physicians Out

“AB 3087 would have caused an exodus of practicing physicians, which would exacerbate our physician shortage and make California unattractive to new physician recruits,” said Dr. Mazer. “When I look at the economics of my own practice, it’s enough to tell me that I could not survive that environment and continue to see Medi-Cal patients. And probably at this stage of my career, it would drive me out of practice earlier that I might otherwise."

California Physicians: Thank You for Your Support

"I want to thank each of you for your support and dedication to CMA,” said Dr. Mazer. “We could not have dealt this bill such a resounding defeat without the united voices of our physician members. Together, we stand stronger."

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