California regulators are considering financial penalties for hospitals, providers and insurers that repeatedly exceed state health care spending targets as medical costs continue to outpace wages and inflation.
The board of the state Office of Health Care Affordability is scheduled to review enforcement proposals Aug. 26. Companies would first be asked to carry out a performance-improvement plan before any fine is imposed.
Chris Noble of Health Access California said health care costs typically rise about 6% annually. He said some high-cost hospitals spend 300% to 500% of the Medicare reimbursement rate.
Hospitals say they are working to control expenses while maintaining care. Santa Barbara Cottage Hospital said it provides financial assistance and is pursuing purchasing efficiencies.
Conor O'Brien, president of the Greater Santa Cruz Federation of Teachers, said some newly hired educators spend one-quarter of their monthly income on health insurance premiums. He said rates for Sutter Health rose 19% last year and are increasing another 22.6% this year.
The state's cost-growth targets are tied to median wage growth in an effort to keep spending increases aligned with what residents can afford.
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