In a typical day, Californians spend over $850 million on healthcare. In a typical year, 53% of the state’s healthcare expenditures are spent by just 5% of the population. More alarming is the fact that by 2022, total employer-based insurance premiums for a family are projected to consume almost a third of median household income. Similarly, the share of the Gross State Product consumed by healthcare continues to grow; it is projected to rise from 15.4% in 2012 to nearly 17.1% in 2022, reducing our ability to invest in other crucial areas. We also face a continuing obesity epidemic that results in growing rates of chronic diseases skewed to the lower end of the socioeconomic ladder. Additionally, the state’s healthcare system will be stressed even further due to several million additional Californians gaining insurance coverage via the Affordable Care Act. These are just some of the reasons it is critical that we address the financial sustainability of the state’s healthcare system without delay. It is time for fundamental change. It is time for action.
Recognizing this, California private and public sector leaders came together in an unprecedented collaborative effort, with academic expertise and analytic support provided by the University of California, Berkeley’s School of Public Health, to address these challenges. Determined to avoid solutions divorced from societal, regulatory and political realities, the Forum has devised a transformational, bottoms-up approach to creating a more affordable, costeffective healthcare system that would, at the same time, improve Californians’ health and well-being.
These are ambitious goals. To attain them, the Forum supports a flexible approach to payment reform, including shared-savings as well as bundled and episode-based payments that can facilitate the transition towards broader implementation of risk-adjusted global budgets.
