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California bill takes on high healthcare costs – by setting prices for medical services

A doctor's stethoscope left on a table.
A doctor's stethoscope left on a table.
Photo by Connor Tarter via Flickr Creative Commons

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The fight for equitable healthcare in the state is branching off to another front.

A new Assembly bill has been introduced today that would let the state set prices for medical services - from doctor’s visits to hospital stays - provided by private insurers. The pricing structure would be comparable to what the government pays for similar services under Medicare.

The bill would create an independent state entity that would set rates for the commercial market. It would also set up an appeals process by which, for example, a hospital could appeal to charge more for a service, if they can justify the cost.

Opponents of the bill say this will cause hospitals to rollback services and also cause physicians to leave California.

Would this independent California entity effectively set prices for the state? Will this bill have negative, unintended repercussions? What would be the implications for the healthcare market in the state?


Gerard Anderson, M.D., director of the Johns Hopkins Center for Hospital Finance and Management; professor of medicine and public health at Johns Hopkins

Theodore Mazer, M.D., president of the California Medical Association