AND GET STARTED HERE WELCOME TO
THE ASSEMBLY COMBAT HEALTH
COMMITTEE HEARING EXPLORING
HEALTHCARE INDUSTRY
CONSOLIDATION IN CALIFORNIA AND
ITS EFFECT ON PRICES AND
CONSUMERS. DO TO THE CONTINUED
STAY AT HOME ORDER WE ARE
PRACTICING PHYSICAL DISTANCE IN
HERE IN THE HEARING ROOM AND
THROUGHOUT THE CAPITOL
BUILDING. SO WE'RE ONLY ABLE TO
HAVE A LIMITED NUMBER OF PEOPLE
WATCH AND PARTICIPATE IN THE
HEARING IN PERSON WE'RE ALSO
REQUIRE THAT MASKS BE WORN IN
PHYSICAL DISTANCE SEEM BE
MAINTAINED BY ALL MEMBERS OF
THE PUBLIC. TESTIFYING WEATHER
HERE IN THE ROOM OR AT A VIDEO
CONFERENCING SIDE IF YOU DO NOT
HAVE A MASK WE CAN PROVIDE ONE
FOR YOU. WITH THE WITNESS VIDEO
A ROOM TESTIMONY STATION- WHEN
WE REACH THE PUBLIC COMMENT
SECTION OF A PORTION OF THE
GENDER I WOULD ASK THAT ANY
MEMBERS OF THE PUBLIC. TO
TESTIFY. IN THE STATE CAPITOL
IN THE WITNESS VIDEO ROOM
PLEASE MAINTAIN. SOCIAL
DISTANCING AS YOU MOVE AROUND
THE ROOM. IN ADDITION WE HAVE
PANELISTS AND OTHER MEMBERS OF
THE PUBLIC MAKING USE OF OUR
WITNESS VIDEO CONFERENCING
ROOMS HERE. IN THE CAPITAL AND
IN A FEW LOCATIONS THROUGHOUT
THE STATE. THOSE WITNESSES WILL
APPEAR ON THE SCREEN SO MEMBERS
CAN WATCH THEIR TESTIMONY LIVE
FROM OUTSIDE OF THE HEARING
ROOM AND ALSO ASKED SOME
QUESTIONS. WILL ALSO BE USING A
TELEPHONE MODERATE TELEPHONE
SERVICE THROUGHOUT WHICH ANY
MEMBER THE PUBLIC CAN PROVIDE
COMMENTARY. WHEN WE GET TO THAT
POINT IN THE AGENDA. PANELISTS
HAVE BEEN PROVIDED TO CALL AND
CALL THE NUMBER PRIOR TO THAT
TO THIS HEARING. THE CALL IN
NUMBER FOR PUBLIC COMMENT FOR
THIS HEARING IS EIGHT SEVEN
SEVEN. SIX NINE TWO. EIGHT NINE
FIVE SEVEN. AND THE ACCESS CODE
IS. ONE THREE ONE FIVE FOUR TWO
ZERO TWO READ THAT AGAIN. THE
CALL IN NUMBER IS. 877-692-8957
AND THE ACCESS CODE IS. ONE
THREE ONE FIVE FOUR TWO ZERO
TWO YOU CAN ALSO FIND THIS ON
THE ASSEMBLY HEALTH COMMITTEE'S
WEBSITE AS WELL AS ON YOUR TV
SCREEN. THE OPERATOR ON THE
LINE WILL GIVE YOU INSTRUCTIONS
ON HOW TO BE PLACED IN THE
QUEUE- TO PROVIDE YOUR PUBLIC
COMMENT IF YOU WERE CALLING IT
IN PLEASE ELIMINATE ALL
BACKGROUND NOISE THIS INCLUDES
MUTING YOUR LIVESTREAM
BROADCAST. AND YOUR SMART
DEVICES TO REDUCE SOUND
DISTORTION. WHAT'S YOUR PLACE
IN THE QUEUE YOU WILL ALSO NEED
TO MUTE YOURSELF. UNTIL YOU ARE
CALLED ON TO SPEAK IF YOU'RE
HAVING ANY PROBLEMS WITH THE
MODERATED CELL PHONE SERVICE
YOU CAN CALL THE COMMITTEE AT
NINE ONE SIX. THREE ONE NINE.
TWO ZERO NINE SEVEN AND MY
STAFF WILL BE THERE TO HELP. I
ALSO WANT TO NOTE THAT WE ARE
ACCEPTING WRITTEN PUBLIC
COMMENT THROUGH THE HEALTH
COMMITTEES PUBLIC EMAIL. WHICH-IS A H. E. A. DOT COMMITTEE. AT
ASSEMBLY DOT CA DOT G. OVIH.
WHICH CAN ALSO BE FOUND ON OUR
WEBSITE. WE MAY NEED TO LIMIT
THE AMOUNT HOW LONG EACH PERSON
HAS TO PROVIDE COMMENT WE HAVE
AN ABSOLUTE HARD STOP AT TWELVE
THIRTY. AND WE WILL ASSESS WE
GET TO THAT POINT- BUT I DO
WANT TO REITERATE THAT WE WILL
TAKE COMMENT IN WRITING SO.
WANT TO SAY THANK YOU FOR YOUR
PATIENCE AND THANK YOU TO ALL
OF OUR SPEAKERS FOR A COMEDY IN
A REQUEST TO. AT THE PRESENT AT
THIS HEARING DURING THIS YEAR
OF THE PANDEMIC. HEALTH CARE
CONCERT INDUSTRY CONSOLIDATION
IS BECOME MORE AND MORE
PREVALENT THROUGHOUT THE NATION
AND IN CALIFORNIA. WELL IT CAN
PROVIDE FOR ECONOMIES OF SCALE
AND COST SAVINGS FOR HOSPITALS
AND PROVIDERS. THE BENEFITS TO
CONSUMERS ARE LESS CLEAR. TODAY
WE WILL HEAR FROM ACADEMIC
EXPERTS AND REGULATORS
REGARDING THE CURRENT STATE OF
INDUSTRY CONSOLIDATION.
REGULATORS ABILITY TO OVERSEE
AND PREVENT OVER CONSOLIDATION.
AND ISCO'S OPTIONS TO BETTER
PROTECT CONSUMERS FROMSOME OF
THE NEGATIVE EFFECTS OF OVER
CONSOLIDATION. SMIGEL THAT
TODAY'S HEALTH INFORMATIONAL
HEARING WILL PROVIDE
FOUNDATIONAL BASE OF
INFORMATION ON THE ISSUE IN
ANTICIPATION OF FURTHER
DISCUSSIONS ON THE ISSUE IN THE
NEXT LEGISLATIVE SESSION- DO WE
HAVE ANY MEMBERS. REMOTELY TELL
ME TODAY OKAY SO LET'S GO
AHEAD. OUR FIRST SPEAKER IS
JAMIE KING. FROM OUR SAN
FRANCISCO REMOTE TESTIMONY
SITE. THANK YOU FOR BE WILLING
AND WILLING TO GO TO THE SITE-
MUCH APPRECIATED. PLEASE-
PLEASE BEGIN. WELL GOOD MORNING
THANK YOU CHAIRMAN WOULD VICE
CHAIRMAN MAYES AND MEMBERS OF
THE ASSEMBLY COMMITTEE ON
HEALTH I REALLY APPRECIATE THE
OPPORTUNITY TO SPEAK WITH YOU
TODAY ON THE ISSUE OF
CONSOLIDATION AND HEALTH CARE
FOR ABOUT THE NEXT FIFTEEN
MINUTES I'LL PROVIDE AN
OVERVIEW OF HEALTH CARE
CONSOLIDATION BOTH NATIONALLY
AND WITH A FOCUS ON CALIFORNIA
AND THEN LATER IN THE PANEL
I'LL DISCUSS SOME POLICY
OPTIONS FOR WHAT CAN BE DONE.
NEXT SLIDE PLEASE. SO BEFORE I
GET TOO FAR INTO DISCUSSION I
JUST WANT TO SET THE STAGE A
LITTLE BIT BY ASKING WHAT IF
THE PRICE OF FOOD INCREASED
LIKE THE PRICE OF HEALTH CARE
HAD. UP BETWEEN NINETEEN FORTY
FIVE AND TWENTY NINETEEN SO
UPDATED THESE NUMBERS A LITTLE
BIT. BUT BASICALLY IF THAT IF
THE PRICE OF FOOD HAD INCREASED
AT THE SAME RATE A DOZEN
ORANGES WOULD COST. FIFTY SEVEN
DOLLARS IF YOU CLICK- A DOZEN
EGGS WILL COST SIXTY FIVE
DOLLARS. AND A GALLON OF MILK
WOULD COST A HUNDRED AND SIXTY
DOLLARS IF FOOD HAD INCREASED
AT THE SAME RATE AS HEALTHCARE
SO CLEARLY SOMETHING IS
HAPPENING WITH OUR HEALTH CARE
PRICES. AND THIS CAN ALSO BE
SEEN IF WE- ADVANCE THE SLIDE.
THIS CAN ALSO BE SEEN IF WE
COMPARE. OUR PRICES IN THE
UNITED STATES WITH THOSE OF
OTHER NATIONS. OTHER NATIONS
PAY A FRACTION OF WHAT WE DO.
AND FOR THE SAME A GOODS AND
SERVICES. OFTEN TIME OF EQUAL A
BETTER QUALITY. AND SO IN FACT
PRICES CLICK. ARE THE PRIMARY
REASON WHY THE US SPENDS MORE
ON HEALTHCARE THAN ANY OTHER
COUNTRY. ADVANCE A SLIDE SO THE
QUESTION IS WHAT HAPPENED TO
HEALTH CARE PRICES. WELL LOTS
OF THINGS HAPPENED HEALTH CARE
PRICES BUT IN THE REALM OF
CONSOLIDATION COMPETITION THREE
VERY IMPORTANT THINGS HAPPENED.
THE FIRST IS THAT WE FAIL TO
PROTECT THE ESSENTIAL ELEMENTS
OF A FREE MARKET PRICE
TRANSPARENCY AND COMPETITION.
SECOND WE FAIL TO RIGOROUSLY
ENFORCE OUR ANTI TRUST LAWS.
AND THIRD WE FAILED TO REGULATE
WITH COMPETITION NO LONGER
EXISTED NEXT SLIDE. SO LET'S
START WITH PRICE TRANSPARENCY
WHAT YOU CAN SEE HERE IS THAT
NEARLY TWO THIRDS OF AMERICANS
SAY IT'S DIFFICULT TO FIND OUT
WHAT THEIR HEALTHCARE WILL COST
WE ALSO KNOW THAT ACADEMICS
POLICY MAKERS AND ENFORCERS
HAVE TROUBLE DISCOVERING THE
PRICES THAT WE PAY FOR HEALTH
CARE WHICH MAKES IT VERY
DIFFICULT TO REGULATE. IN FACT
ADVANCE THE SLIDE. ON THE
MAJORITY OF OUR STATES RECEIVED
A FAILING GRADE ON THE STATE
HEALTHCARE PRICE TRANSPARENCY
TWENTY. BY CATALYST FOR PAYMENT
REFORM. AND THE SOURCE ON
HEALTHCARE PRICING COMPETITION
SO WE KNOW THAT WE NEED TO DO
MUCH MORE TO MAKE SURE THAT WE
HAVE GOOD QUALITY PRICE
INFORMATION THAT'S AVAILABLE-
ON OUR HEALTH CARE IN ORDER TO
KNOW WHAT TO DO. NEXT SLIDE
PLEASE BUT THAT'S NOT ENOUGH WE
NEED TO ENFORCE OUR ANTITRUST
LAWS WITH MORE RIGOR WHAT YOU
CAN SEE HERE IS THAT FROM
NINETEEN NINETY ONE TO ABOUT
TWO THOUSAND AND ELEVEN THE FTC
DID NOT BRING A SUCCESSFUL
HOSPITAL MERGER CHALLENGE AND
THIS DID TWO THINGS ONE IT HAD
IT INSPIRED THE FTC TO SPEND
VALUABLE TIME AND RESOURCES-
CHALLENGING OTHER TYPES OF
MERGERS AND IT SENT A MESSAGE
TO THE HEALTH CARE INDUSTRY
THAT THEY COULD CONSOLIDATE
WITHOUT MUCH RECOURSE. AND SO
WHAT I DID NEXT SLIDE PLEASE I
WAS LEAD TO HEALTH CARE MERGER
MANIA IN SOME SENSES SO WE
THOUGHT HOSPITAL'S MERGING WITH
OTHER HOSPITAL'S MERGING WITH
OTHER HOSPITALS TO FORM
HEALTHCARE SYSTEMS. THOSE
HEALTH CARE SYSTEMS THEN BEGAN
ACQUIRING PHYSICIAN GROUPS- AND
OTHER COMPLEMENTARY SERVICES
AND NOW WHAT WE'RE SEEING A LOT
OF ITS CROSS MARKET MERGERS
WHERE HEALTHCARE SYSTEM IN ONE
GEOGRAPHIC AREA. IS ACQUIRING
HOSPITALS AND PROVIDER GROUPS
IN OTHER GEOGRAPHIC AREAS. AND
THE DATA ON WHAT HAPPENS
FOLLOWING THESE MERGERS AND IS
FAIRLY ROBUST ESPECIALLY IN THE
REALM OF HORIZONTAL HOSPITAL
MERGERS NEXT SLIDE PLEASE. WHEN
WE HAVE HORIZONTAL HOSPITAL
MERGERS THEY HAVE BEEN
REPEATEDLY ASSOCIATED WITH
INCREASES IN PRICE FROM TWENTY
TO FORTY FOUR PERCENT.
REDUCTIONS IN QUALITY NEXT
SLIDE PLEASE. INCREASES IN
PREMIUMS IN THE ACA MARKET
REDUCTIONS IN WAGE GROWTH FOR
BOTH NURSES AND PHARMACISTS.
AND HIGHER COSTS OVERALL SO I
KNOW THAT IN SOME INSTANCES
HOSPITALS WILL CLAIM THAT THERE
ARE- ECONOMIES OF SCALE AND
EFFICIENCIES THAT COME FROM
THESE MERGERS. BUT TO DATE. WE
HAVE SEEN EVIDENCE THAT LARGER
HOSPITALS IN LARGER SYSTEMS
OFTEN HAVE HIGHER OPERATING
COSTS AT HOSPITALS AND SMALLER
SYSTEMS. ADVANCE ASIDE PLEASE.
THE STORY IS MUCH THE SAME FOR
VERTICAL MERGERS YOU CAN SEE
HERE THAT THE POSITION ENTITIES
WHEN A HOSPITAL OR HEALTH
SYSTEM ACQUIRES A PHYSICIAN
PRACTICE- THAT IS OFTEN
ASSOCIATED WITH HIGHER
PHYSICIAN PRICES BY ON AN
AVERAGE OF ABOUT FOURTEEN
PERCENT. FOR SPECIALIST THOSE
PRICES GO UP EVEN MORE SO
CARDIOLOGISTS PRICES HAVE BEEN
ASSOCIATED WITH INCREASE OF
ABOUT 33% ORTHOPEDIST'S ARE
ABOUT 12220% THE SAME IS TRUE
IN CLINICS ARE REQUIRED BY
HOSPITALS OR HEALTH SYSTEMS
THEIR PRICES HAVE BEEN SEEN TO
GO UP 322407% WITHIN FOUR
YEARS. BUT INTERESTINGLY ENOUGH
IT'S NOT JUST THE ACQUIRED
ENTITY WHOSE PRICES GO UP WE
ALSO SEE THE HOSPITAL'S PRICES
IN THE ACQUIRING ENTITIES
PRICES GO UP AS WELL.
OFTENTIMES THESE MERGERS ARE
ASSOCIATED WITH LITTLE TO NO
QUALITY IMPROVEMENT. AND WHAT'S
REALLY IMPORTANT IS THAT
VERTICAL ERGERS ARE OFTEN.
JUSTIFIED AND ALLOWED TO GO
THROUGH ON THE PROMISE OF
QUALITY IMPROVEMENTS IMPROVED
EFFICIENCIES. AND THOSE
PROMISES HAVE JUST NOT BEEN
MET. AND NOT BEEN ACCOMPLISHED
IN GENERAL AT LEAST ACCORDING
TO THE DATA THAT WE HAVE. THE
OTHER THING THAT I WANT TO
RAISE HERE FOR YOU IS THAT. THE
FEDERAL FILING THRESHOLD OF FOR
MERGERS UNDER THE HART SCOTT
RODINO ACT IS NINETY FOUR
MILLION DOLLARS. NOW THE
AVERAGE HOSPITAL MERGER THE
MEDIAN HOSPITAL MERGER IS
EIGHTY MILLION DOLLARS. SO THE
IF FOR A HOSPITAL AND MURDER TO
BE VALUED AT EIGHTY MILLION
DOLLARS MEANS THAT NECESSARILY
A PHYSICIAN GROUP MERGER IS
MOST LIKELY GOING TO BE
UNDERNEATH THAT AS WELL WHICH
MEANS TAT. THE VAST MAJORITY
OR A LARGE PORTION OF OUR
HEALTH CARE CONSOLIDATION
ESPECIALLY IN THE VERTICAL AREA
IS FLYING UNDERNEATH FEDERAL
ANTI TRUST ENFORCEMENT RADAR
IT'S NOT BEING PICKED UP WHICH
MEANS IS A VERY IMPORTANT ROLE
FOR STATES TO BE PLAYING HERE
IN MONITORING- CONSOLIDATION IN
THESE. AREAS NEXT SLIDE PLEASE
SO THE OTHER THE LAST YEAR I
WANT TO TALK A LITTLE BIT ABOUT
IS CROSS MARKET MERGERS AND
THESE HAVE BEEN OCCURRING- IN
LARGER NUMBERS IN RECENT YEARS
AND THEY ARE ALSO ASSOCIATED
WITH INCREASED PRICES BY THE
ACQUIRED HOSPITAL WE SEE THESE
INCREASED PRICES OF 7217% AND
INTERESTINGLY ONE STUDY ALSO
FOUND THAT OTHER RIVAL
HOSPITALS IN THE SAME
GEOGRAPHIC AREA AS THE HOSPITAL
THAT WAS ACQUIRED ALSO INCREASE
THEIR PRICES BY CLOSE 28% JUST
SHADOWING THE PRICE INCREASE OF
THE- ACQUIRED HOSPITAL SO THE
EFFECT IS. PERVADING OUT
THROUGHOUT THE MARKET IN THAT
PARTICULAR AREA. NEXT SLIDE
PLEASE. AND SO ALL THIS
CONSOLIDATION- HAS AFFECTED THE
UNITED STATES HEALTHCARE
MARKETS VERY BROADLY IT'S NOT
JUST HOSPITALS THAT WE'RE
SEEING SO WHAT YOU CAN SEE HERE
IS. THESE ARE PERCENTAGES OF
OUR METROPOLITAN STATISTICAL
AREAS SO. THESE ARE METRO AREAS
IN THE UNITED STATES 95% OF
THEM HAVE HIGHLY CONCENTRATED
HOSPITAL MARKETS. ALMOST 80% OF
THEM HAVE HIGHLY CONCENTRATED A
SPECIALIST PHYSICIAN MARKETS
NEARLY 60% OF THEM HAVE HIGHLY
CONCENTRATED. INSURER MARKETS.
AND OVER 40% OF THEM HAVE
HIGHLY CONCENTRATED PRIMARY
CARE PHYSICIAN MARKETS AND I
REALLY WANT TO DRAW YOUR
ATTENTION TO THAT BECAUSE THAT
HAS INCREASED. A HUNDRED AND
13% BETWEEN TWO THOUSAND AND
TEN AND TWENTY EIGHTEEN- THIS
IS A MARKET TO REALLY WATCH
ESPECIALLY IN LIGHT OF COVE IT.
BECAUSE WE KNOW THE PRIMARY
CARE PHYSICIAN PRACTICES HAVE
BEGUN TO STRUGGLE FINANCIALLY
AS A RESULT OF PEOPLE NOT GOING
TO THE DOCTOR AS MUCH. DURING
COVERT AND THAT MAKES THEM
VULNERABLE TO ACQUISITION IN
THE FUTURE SO THIS IS AN AREA
WHERE WE REALLY NEED TO BE.
PAYING ATTENTION TO HOW
CONSOLIDATION IS HAPPENING IN
THE MARKET. NEXT SLIDE PLEASE.
SO WE LOOKED AT SORT OF THE
NATIONAL NUMBERS ON THIS BUT
HOUSES AFFECTING CALIFORNIA IN
PARTICULAR. WELL THE MOST
RECENT DATA THAT I COULD GET
WAS FROM TWENTY SIXTEEN THIS IS
FROM THE PATRIS CENTER. AND
WHAT THIS SHOWS IS THAT OUR
HOSPITAL MARKETS THROUGHOUT
CALIFORNIA- AT LEAST IN THE
TOP. TWO THIRDS OF IT OR THREE
QUARTERS OUR V ARE HIGHLY
CONCENTRATED. THE SAME IS TRUE
FOR OUR INSURER MARKET THEY'RE
ALL HIGHLY CONCENTRATED. OUR
PRIMARY CARE PHYSICIAN MARKETS
ARE MUCH LESS SO- NEXT SLIDE
PLEASE- BUT THEY ARE RAPIDLY
CONSOLIDATING ON WHAT YOU CAN
SEE HERE IS THAT THEY HAD OF
MANY OF THOSE MARKETS AND
COUNTIES THROUGHOUT THE STATE
HAD HIGHER ACQUISITION AND HAD
HIGHER H. I. CHANGES. OF FROM
TWENTY TEN TO TWENTY SIXTEEN.
NEXT SLIDE PLEASE AT THE SAME
IS TRUE FOR OUR SPECIALIST
POSITION MARKET CONCENTRATION
THAT THOSE HAVE. BEEN HIGHLY
CONCENTRATED ESPECIALLY IN
AREAS OF NORTHERN CALIFORNIA
BUT WHEN YOU LOOK AT THE CHANGE
WHAT YOU CAN SEE IS THAT ARE
SOUTHERN CALIFORNIA- MARKETS
ARE HIGHLY ARE CONSOLIDATING AT
A RAPID RATE AS WELL. I'M SO
OVER. NEXT IS. WHAT YOU CAN SEE
IS THAT- THE WHOLE STATE IS
CONSOLIDATING KIND OF ACROSS
THE BOARD IN ITS HEALTH CARE
MARKETS BUT WE SEE MORE
ACTIVITY WITH IN NORTHERN
CALIFORNIA AND MORE
CONSOLIDATION IN NORTHERN
CALIFORNIA. AND AS
CONCENTRATION NEXT SLIDE PLEASE
AS CONCENTRATION INCREASES SO
DO PRICES SO WHAT YOU CAN SEE
HERE IS THAT HOSPITALS IN THE
LARGEST SYSTEMS. ARE MORE
LIKELY TO CHARGE HI
SIGNIFICANTLY HIGHER RATES AND
THOSE RATES ARE INCREASING AT A
FASTER RATE THAN THE REST OF
THE OTHER HOSPITALS. NEXT SLIDE
PLEASE. NOW ON THIS SIDE WHAT
I'D LIKE TO DRAW YOUR ATTENTION
TO IS BOTH THAT THERE IS
SIGNIFICANT VARIATION BETWEEN
THE HOSPITAL MARKETS IN
NORTHERN CALIFORNIA AND IN
SOUTHERN CALIFORNIA. BUT ALSO
THE DIFFERENTIATION BETWEEN THE
MARKETS IN NORTHERN CALIFORNIA
AND SOUTHERN CALIFORNIA AND THE
REST OF THE COUNTRY SO WHAT YOU
CAN SEE IN THE OUTLIER GROUP-
WHERE THERE'S JUST THREE LITTLE
MARKETS THAT ARE THERE SOME
STANDING SIDE ON THE RED. YOU
CAN SEE THAT SAN JOSE HAS THE
HIGHEST OVERALL PRICES AND IN
HEALTHCARE IN THE COUNTRY. SAN
FRANCISCO IS HAS THE LITTLE
WHITE LINES ACROSS IT AND IT'S
NUMBER TWO. AND IN ANCHORAGE
ALASKA IS THE THIRD IN THAT
GROUP AND ITS NOTORIOUSLY HAS
VERY HIGH PRICES BECAUSE IT'S
SO REMOTE. NOW YOU CAN SEE THAT
THE LITTLE RECTANGLE THAT'S
BRIGHT ORANGE THAT'S LOS
ANGELES AND ITS PRICES ARE 19%
ABOVE THE NATIONAL MEDIAN. SO
IT IS DRAMATICALLY DIFFERENT
FROM SAN FRANCISCO AND SAN JOSE
BUT IT IS ALSO HAS ELEVATED
PRICES COMPARED TO THE REST OF
THE COUNTRY. NEXT SLIDE PLEASE.
SO LET'S TAKE A LITTLE BIT MORE
INTO THIS WHAT I WANT YOU TO
SEE HERE AND THE SIDES ARE FROM
AND- THE HEALTH CARE COST.
INSTITUTE A THEIR PRICE INDEX
AND WHAT YOU CAN SEE HERE IS I
THINK VERY USEFUL SO I'VE
COMPARED. PRICES IN OVERALL
SPENDING IN SAN FRANCISCO LOS
ANGELES NEW YORK AND SAN JOSE
WHAT YOU CAN SEE IS THAT.
OVERALL SPENDING IN SAN
FRANCISCO IS VERY SIMILAR
INTERNET AS IT IS IN NEW YORK.
BUT WHAT'S DRIVING THAT IS
DIFFERENT AND SAN FRANCISCO
WHAT'S DRIVING THAT- THAT
SPENDING IS PRICES WE PAY SIXTY
FOUR. PERCENT OVERALL MORE THAN
THE NATIONAL MEDIAN WEARING AS
IN NEW YORK THE P. 19% MORE
OVERALL BUT THEY HAVE HIGHER
UTILIZATION WE HAVE A WE USE
LESS CARE THAN THE NATIONAL
AVERAGE AND OUR SERVICE MAKES.
IT HEALTHIER AND SO REQUIRES
LESS CARE THAN THE NATIONAL
AVERAGE. IN SAN JOSE THE STORY
IS LARGELY THE SAME IN LOS
ANGELES THEIR RICES ARE 19%
HIGHER THAN THE NATIONAL
AVERAGE BUT AGAIN THEIR
UTILIZATION AND SERVICEMAX. ARE
BELOW THE NATIONAL AVERAGE SO
IT'S ARGUES. AND THE
HEALTHINESS OF OUR POPULATION
THAT IS HELPING TO BRING OUR
PRICES ARE SPENDING DOWN BUT
OUR PRICES THAT ARE DRIVING IT
UP. NEXT SLIDE PLEASE. YOU CAN
SEE THAT THE SAME- PATTERN
EMERGES AND EVEN MORE SO WHEN
IT COMES TO INPATIENT SPENDING.
OUR INPATIENT SPENDING IS 26%
ABOVE THE NATIONAL AVERAGE
BETTER PRICE FOR INPATIENT
SPENDING. IS CLOSE 290% ABOVE
THE NATIONAL AVERAGE. AGAIN OUR
UTILIZATION IN SAN FRANCISCO IS
DOWN FOR LOS ANGELES OUR PRICE
IS 34% ABOVE THE NATIONAL
AVERAGE BUT UTILIZATION IS 22%
BELOW- SO THESE ARE JUST WAYS
OF HELPING TO SHOWHOW MUCH
PRICES DRIVING THE AMOUNT
SPENDING IN CALIFORNIA. NEXT
SLIDE PLEASE IF YOU LOOK AT
OUTPATIENT SPENDING- YOU'LL SEE
THAT THE PATTERN IS MUCH THE
SAME BUT SAID I WANT TO DRAW
YOUR ATTENTION TO SAN JOSE IN
THIS PICTURE SAN JOSE SPENDS
ABOUT THE NASA. IS SPENT ABOUT
THE NATIONAL AVERAGE ON
OUTPATIENT SPENDING BUT ITS
PRICE IS A HUNDRED AND 4% OVER
THE NATIONAL AVERAGE AND ITS
UTILIZATION IS 46% LESS SO WE
ARE USING SIGNIFICANTLY LESS
OUTPATIENT CARE. AND THE FEAR
IS THAT PEOPLE ARE NOT GOING TO
THE DOCTOR BECAUSE OF THE PRICE.
NEXT SLIDE PLEASE- IN TERMS OF
PROFESSIONAL SERVICES AGAIN WE
SEE VERY HIGH PRICES OF MINIMAL
LEVELS OF UTILIZATION ARE SORT
OF AVERAGE AT LEVELS OF
UTILIZATION- BUT STILL PAYING
MUCH MORE THAN THE NATIONAL
AVERAGE LOS ANGELES HAS LOWER
PROFESSIONAL SERVICES PRICES
JUST A LITTLE BIT ABOVE THE
NATIONAL AVERAGE- BUT AGAIN
LOWER UTILIZATION SO THAT'S
BRINGING THOSE PRICES DOWN.
OKAY NEXT SLIDE PLEASE SO WHEN
OUR PRICES ARE SO HIGH I THINK
IT'S REALLY IMPORTANT TO PUT IN
CONTEXT WHAT HAPPENS WHAT HAS
BEEN HAPPENING OVER THE LAST
SEVERAL YEARS IS THAT AS
PROVIDER PRICES INCREASED
INSURANCE COMPANIES WILL PASS
THOSE RATE INCREASES ONLINE
THROUGH PREMIUMS TO EMPLOYERS
AND TO INDIVIDUALS. AND
OFTENTIMES THOSE EMPLOYERS THEN
SHIFT THE COST ON TO EMPLOYEES.
AND IT'S ASKING THEM TO PAY
HIGHER PART HIGHER PORIONS OF
THEIR PREMIUM AS WELL AS HIGHER
OUT F POCKET COSTS. AND SO
WHAT YOU CAN SEE HERE- NEXT
SLIDE PLEASE. AS A FAMILY
PREMIUMS HAVE INCREASED OVER
3100% SINCE NINETEEN NINETY
NINE TO ALMOST TWENTY THOUSAND
DOLLARS A YEAR NEXT SLIDE
PLEASE AND FAMILY WORKER
CONTRIBUTIONS HAVE INCREASED
THREE HUNDRED AND FIFTY
PERCENT- TO. OVER FIFTY FIVE
HUNDRED DOLLARS SINCE NINETEEN
NINETY NINE AS WELL. NEXT SLIDE
PLEASE. AS A RESULT OVER 60% OF
AMERICANS HAVE AS A MAJOR
CONCERN THAT THEIR HEALTH
INSURANCE PLAN WILL ASK THEM TO
PAY A GREATER AMOUNT IN
PREMIUMS OR GREATER PORTION OF
THEIR MEDICAL EXPENSES AND
ALMOST HALF OF THEM SAY THAT
THEY WILL NOT HAVE ENOUGH MONEY
TO PAY FOR MEDICAL OR HEALTH
CARE NEXT SLIDE PLEASE. WHAT
HAPPENS THIS IS NOT JUST PEOPLE
WHO HAVE NO INSURANCE OR UNDER
INSURED THIS IS HALF OF THE
PEOPLE WITH EMPLOYER SPONSORED
INSURANCE SAY THAT SOMEONE IN
THEIR FAMILY SKIPPED NEEDED OR
RECORD NEEDED CARE OR POSTPONED
IT DUE TO COST. IN THE LAST
YEAR. NEXT SLIDE PLEASE. AND
WHAT HAPPENS WHAT HAPPENS WHEN
INDIVIDUALS CAN'T AFFORD THEIR
HEALTH CARE IT DOESN'T JUST
AFFECT THEIR INDIVIDUAL FAMILY
FINANCES AND THEIR ABILITY TO
ACCESS CARE IT ALSO AFFECTS THE
OVER ARCHING ECONOMY WE SEE
THAT WHEN PEOPLE HAVE HIGH
HEALTH CARE BILLS THEY PUT OFF
VACATIONS AND MAJOR PURCHASES
THEY CUT SPENDING ON FOOD AND
CLOTHES AND HOUSEHOLD ITEMS.
THEY TAKE OUT MORE DEBT BAY
INVEST LESS IN THEIR RETIREMENT
OR THEY PULL MONEY OUT OF THEIR
RETIREMENT FUNDS- THEY CHANGED
THEIR LIVING SITUATION THEY
EITHER SELL THEIR HOME THEY
MOVE OUT OF STATE THEY DO OTHER
THINGS SO THE IMPACTS OF HEALTH
CARE NOT JUST ON OUR EMPLOYERS
AND OUR CITIZENS THEY AFFECT
THE ENTIRE ECONOMY AS A WHOLE.
AND I THINK IT'S TIME FOR US TO
DO AS MUCH AS WE POSSIBLY CAN
TO MAKE SURE THAT PEOPLE HAVE
ACCESS TO QUALITY AND
AFFORDABLE HEALTH INSURANCE AND
SO I'M GONNA STOP HERE M. NEXT
SLIDE AND THEN WE CAN TALK
ABOUT WHAT CAN BE DONE AT THE
END. OF THE HEARING THANK YOU.
THANK YOU VERY MUCH- ASSEMBLY
MEMBER BURKE WITH THIS ANY
QUESTIONS. AT THIS POINT. OUR
FIRST OFF THANK YOU VERY MUCH
FOR THAT THAT OVERVIEW AND-
SOME OF THE STATE'S PRETTY
STAGGERING STATISTICS THAT
YOU'VE LAID OUT THERE. WHEN I
GO BACK AND- TO A COMMENTED SHE
MADE- OR WHEN YOU'RE THEIR
SLIDES WE TALKED ABOUT- IT'S A
NEW YEAR UNDER THE VERTICAL-
VERTICAL INTEGRATION OR
VERTICAL- MERGER. PROCESSES
THAT ARE GOING ON THERE HE
NOTED THAT- YOU KNOW EVEN THE
ACQUIRING HOSPITAL SYSTEMS ARE
SHOWING HIGHER PRICES SO IS- IS
PART OF THAT THE DEBT
MANAGEMENT OF THE ACQUISITION.
OF THAT OR IS IT. IS IT JUST AN
OPPORTUNITY- TO CHARGE MORE
BECAUSE THEY ARE NOW THE BIG
DOG IN TOWN. SO MMHM MY
UNDERSTANDING OF THIS IS THAT
WHAT LARGELY IS HAPPENING IS
THAT THERE IS A MARKET POWER
GAINED BY ACQUIRING A DESIRABLE
PHYSICIAN GROUP IN THAT SPACE
AND THEREFORE THE HOSPITAL THEN
HAS AB IMPROVED MARKET POWER
POSITION VIS A VIS NEGOTIATIONS
WITH INSURERS. AND THEY HAVE
THE ABILITY TO INCREASE PRICES
NOW IT'S NOT OUT OF THE
QUESTION THAT SOME OF THAT
INCREASE IN PRICES DUE TO DEBT
MANAGEMENT BUT MY UNDERSTANDING
IS THAT THOSE THINGS WERE
CONTROLLED FOR AND THAT IN
GENERAL THE PRICE INCREASES ARE
DUE TO- TO COMPETITION AND
ADVANCES AND MARKET POWER- SO
AND THEN AND THEN YOU HAD
ANOTHER SLIDE ON. ON OUTPATIENT
CENTER- SPENDING AND ONCE AGAIN
SOME OF THOSE NUMBERS ARE
PRETTY STAGGERING THAT
OBVIOUSLY PRICES A HUGE HUGE
COMPONENT. OF FOR EXAMPLE THE
IN SAN FRANCISCO AT SOME. PRICE
BEING 72% HIGHER THAN THE
NATIONAL AVERAGE IN SAN JOSE A
HUNDRED AND FOUR PERCENT- OF
THE NATIONAL AVERAGE. AND WHAT
YOU SAID WAS- YOU ALSO SEE
LOWER UTILIZATION SO PRICE. IS
DRIVING THAT LOWER UTILIZATION-
FERRIS FAIR TO SAY. SO I THINK
THAT I HAVE NOT SEEN A STUDY DO
DEMONSTRATING THAT THE PRICE IS
DRIVING THAT UTILIZATION IT
CERTAINLY ASSOCIATED HERE- BUT
I NOTE WEEK WE DO SEE THAT
PEOPLE ARE FORGOING CARE THERE
HAVE BEEN A NUMBER OF STUDIES
DEMONSTRATING THAT I JUST
HAVEN'T SEEN IT TIED
SPECIFICALLY IN THE YOU KNOW
SAN JOSE OR SAN FRANCISCO BUT
IT MAKES PERFECT SENSE THAT IF
THE PRICES ARE SIGNIFICANTLY
HIGHER WE SEE SOME. WE SEE
SIGNIFICANT LOWER UTILIZATION
THAT SOME OF THOSE PEOPLE ARE
NOT GOING AND SEEKING CARE
BECAUSE OF PRICE AND THAT IS
CERTAINLY THE CONCERN THAT WE
WOULD SEE IN THIS. IN THIS
SITUATION. SO AS WE SEE- AS WE
SEE THESE. THESE TRENDS- IS. IS
PART OF THE- YEAH I DO WONDER
IF THERE'S AT THE TAIL WAGGING
THE DOG OR SOMETHING GOING ON
HERE BECAUSE- OBVIOUSLY THESE
SYSTEMS HAVE- HAVE. OVERHEAD
AND COSTS AND SO- YOU KNOW IS
LOWER IS THERE YOUR LOWER
UTILIZATION. IN GENERAL AND
THEN THEY HAVE TO RAISE THE
PRICE TO KEEP THE REVENUE UP OR
OR IS THE REP YOU KNOW ARE
THERE ANY STUDIES SHOW THAT THE
REVENUE. ARE THE PRICES IS
AFFECTING YOU SEE WHERE I'M
GOING WITHOUT QUESTION. I DO SO
I THINK THAT IT DEPENDS ON
WHERE YOU ARE NOW IT'S
IMPORTANT TO REMEMBER THAT
THESE ARE METROPOLITAN
STATISTICAL THESE ARE THESE ARE
URBAN CENTERS. AND SO IN URBAN
CENTERS THERE ARE LOTS OF
PEOPLE AND THERE'S NOT AS MUCH
OF A NEED TO GENERATE CARE TO
KEEP THE DOORS OPEN IN RURAL
CENTERS WE SEE A LOT MORE OF
THAT WHERE. JUST KEEPING THE
HOSPITAL GOING REQUIRES- YOU
KNOW A CERTAIN NUMBER OF PEOPLE
TO COME IN THE DOOR AND THERE
MIGHT NOT BE A POPULATION-
SUFFICIENT TO PROVIDE THAT
LEVEL OF CARE BUT IN URBAN
CENTERS I THINK THAT'S MUCH
LESS OF A CONCERN. SO WERE ALSO
SEEN- WITH THESE WITH THESE
INCREASED COSTS AND PRICES- AND
THE CONSOLIDATION AROUND. IN
THE MARKET PLACE- IS CERTAINLY
IN AREAS YOU KNOW AND IN
NORTHERN CALIFORNIA YOU HAVE.
MAJOR DOMINANT PLAYERS AND SO.
ON SO THAT. IN TURN LEADS TO
HIGHER HEALTH INSURANCE PREMIUM
COSTS BECAUSE OF NETWORK
ADEQUACY REQUIREMENTS. YEAH I
BELIEVE AND THAT MAKES ME MAKES
ME CONCERNED THAT SO PART OF
THE INSURANCE COSTS OR THE
RIVER PREMIUMS IS RELATED TO
THE CONSOLIDATION BECAUSE- THE
BIGGER SYSTEM THAT IS THE
DOMINANT SYSTEM IN THE AREA.
KNOWS THAT THE COMPANIES HAVE
TO PROVIDE THE SERVICES FOR
THEIR PLANNED SO- THERE IS IT
IT JUST FEELS LIKE IT'S ALL
FEEDING ITSELF HERE AND THE
CONSUMER IS THE ONE WHO WAS IS
SUFFERING. YES YOU'RE
ABSOLUTELY CORRECT SO WEEK- WE
CALL THAT HAVING A MUST HAVE
HOSPITAL OR MUST HAVE PROVIDER
WHERE NETWORK ADEQUACY LAWS OR
PATIENTS DEMANDED THAT A
CERTAIN PROVIDER BE IN A
NETWORK- THIS OFTEN HAPPENS
BECAUSE OF NETWORK ADEQUACY
LAWS IN AREAS WHERE THERE'S ONE
HOSPITAL AND A GEOGRAPHIC
REGION. AND SO- IN THOSEINSTANCES PROVIDERS THAT HAVE
THOSE MUST HAVE HOSPITALS NOT
ONLY CAN LEVERAGE THEIR PRICES
UP TO MONOPOLY LEVELS AND- FOR
THOSE HOSPITALS BUT AS WE SAW-
IN THE SUTTER CLIP IN THE
SUTTER HEARING- THOSE ARE OFTEN
ALSO LEVERAGE TO- DRIVE UP
PRICES IN OTHER HOSPITALS AND
OTHER FACILITIES THAT ARE IN.
MORE COMPETITIVE MORE
COMPETITIVE MARKETS AND SO IF
YOU CAN THROUGH THE USE OF ALL
OR NOTHING CLAUSES WHICH I'LL
TALK ABOUT LATER- THOSE
ENTITIES WITH MUST HAVE
PROVIDERS CAN THEN. LEVERAGE
THOSE PRICES AND THAT MARKET
POWER TO DRIVE UP PRICES IT FOR
ALL OF THEIR PIC AT PROVIDER
ORGANIZATIONS. GREAT THANK YOU
THANK YOU VERY MUCH OF A TO
OPEN UP- MISTER NAZARIAN
ASSEMBLYMEMBERS AREAS HERE DO
YOU WOULD YOU DO YOU HAVE ANY
QUESTIONS FOR OUR FIRST
SPEAKER. AT THIS POINT OKAY
WELL THANK YOU LOOK FORWARD TO
OUR THE REST OF THE
CONVERSATION AND LATER PART OF
OUR OUR HEARING THANK YOU VERY
MUCH. I'M GONNA GO TO OUR NEXT
OF OUR SECOND PANEL ON CONSISTS
OF OUR STATE. STATE REGULATORS.
FIRST FROM THE WITH VIDEO
WITNESS VIDEO ROOM IN THE
CAPITAL WE HAVE A RUNNING COULD
GEORGE WITH THE ATTORNEY
GENERAL'S OFFICE- THANK YOU FOR
MAKING THE EFFORT TO BE HERE
TODAY AND- PLEASE. GO AHEAD.
STE GOOD MORNING MISTER CHAIR
MEMBERS OF THE ASSEMBLY HEALTH
COMMITTEE THANK YOU FOR
ALLOWING ME THE OPPORTUNITY TO
SPEAK WITH YOU TODAY I'M
RUNNING TO GEORGE THE SENIOR
ASSISTANT ATTORNEY GENERAL FOR
THE HEALTHCARE RIGHTS AND
ACCESS SECTION WE ARE A NEWLY
CREATED SECTION BY THE ATTORNEY
GENERAL THE COORDINATES AND
LEADS ALL HEALTH CARE WORK FROM
HOSPITAL TRANSACTIONS TO ANTI
TRUST AND CONSUMER ISSUES IN
THE HEALTHCARE MARKET. AS PART
OF OUR NEW EXPANSION OUR
SECTION REVIEWS NONPROFIT
HEALTHCARE TRANSACTIONS TO
STUDENT TO THE ATTORNEY
GENERAL'S AUTHORITY UNDER
CORPORATIONS CODE SECTIONS.
FIFTY NINE FOURTEEN TO FIFTY
NINE AT TWENTY SIX AND LEADS
NEW MATTERS INVOLVING
HEALTHCARE CONSOLIDATION AND
COMPETITION ISSUES- WITH THE
WITH THE AD DOJ'S HISTORY OF
REVIEW OF HEALTH CARE FACILITY
TRANSACTIONS AND EXPERTISE IN
ANTI COMPETITION CONDUCT IN THE
HEALTHCARE FIELD FROM THE
SENATE LITIGATION IT TO
PHARMACEUTICAL DRUG PRICING IN
THE POTENTIAL SETTLEMENT. TO
NAME A FEW. THE OF JUST IS YOU
SITUATED TO ADDRESS THE ISSUE
OF CON A CONSOLIDATION IN
HEALTHCARE. SO TODAY I WILL BE
GIVING YOU AN OVERVIEW OF THE
ATTORNEY GENERAL'S AUTHORITY.
AND WHERE THERE ARE POTENTIAL
GAPS IN THE EXISTING OVERSIGHT.
THE BEGINNING FIRST WITH OUR
AUTHORITY CALIFORNIA LAW
REQUIRES THE ATTORNEY GENERAL
TO REVIEW. AND CONSENT FOR ANY
SALE TRANSFER AT LEAST EXCHANGE
OPTION CONVEYANCE OR OTHERWISE
DISPOSABLE OF A MATERIAL AMOUNT
OF ASSETS OF THE HEALTHCARE
FACILITY OWNED OR OPERATED BY
NONPROFIT CORPORATION. THIS LAW
WAS THE PRODUCT OF THE
LEGISLATURE IN THE COMMUNITY
WORKING TOGETHER TO EXPAND THE
AG'S REVIEW OF NONPROFITS AND
HEALTH CARE TO ENSURE THAT WHEN
A HOSPITAL BENEFITTED. FROM
NONPROFIT STATUS THE COMMUNITY
BENEFITED AS WELL. THIS
REQUIREMENT APPLIES TO ALL
NONPROFIT HEALTH CARE
FACILITIES AS DEFINED IN HEALTH
AND SAFETY CODE SECTION TWELVE
FIFTY. I SUCH AS THAT ARE
LICENSED TO PROVIDE TWENTY FOUR
HOUR CARE SO THIS INCLUDES FOR
INSTANCE- GENERAL KEEP IN
PSYCHIATRIC HOSPITALS SKILLED
NURSING FACILITIES THAT I'M
RESIDENTIAL CARE ENTITIES. IT
DOESN'T INCLUDE FOR PROFIT
HOSPITALS OPPOSITION GROUPS
OTHER CLINICS OR LABS OR
OUTPATIENT SETTINGS LIKE
AMBULATORY SURGICAL CENTERS.
UNDER THE CORPORATION'S FLOAT.
THE HEALTHCARE ENTITY HAVE AT
HAS TO GIVE THE ATTORNEY
GENERAL'S OFFICE NOTICED AND
THEN WE HAVE NINETY DAYS TO
REVIEW THE TRANSACTION GIVE
CONSENT CONDITIONAL CONSENT OR
TO DENY THE AGREEMENT OR
TRANSACTION. HI THIS TIME THREE
MAY ALSO BE EXTENDED FOR AN
ADDITIONAL FORTY FIVE DAYS.
WHEN REVIEWING THESE
TRANSACTIONS THE AG MUST
EXAMINE CERTAIN FACTORS
INCLUDING WHETHER THAT THE FOR
THE TERMS ARE FAIR AND
REASONABLE- WHETHER THAT THE
TRANSACTION IS THAT A FAIR
MARKET VALUE. WHETHER IT
IMPROPERLY BENEFITS ANY PRIVATE
AND FIFTY. FOR INSTANCE I'M WE
ALSO HAVE TO LOOK AT WHETHER
THE TRANSACTION AFFECTS THE
AVAILABILITY AND ACCESSIBILITY
OF HEALTH CARE SERVICES
INCLUDING WHETHER THE
TRANSACTION RAISES COMPETITION
CONCERNS OR IS IN THE PUBLIC
INTEREST. AFTER THE REVIEW AS I
SAID THE AG MAY CHOOSE TO
APPROVE CONDITIONALLY APPROVE
OR DENY THAT TRANSACTION IN A
CONDITIONAL APPROVAL THE AGING
MAY REQUIRE CONDITIONS RELATED
TO THE PUBLIC'S INTEREST
INCLUDING REQUIRING THAT THE
MERGED ENTITY'S. MAINTAIN
ADEQUATE CHARITY CARE SERVICES
OR INCREASE CHARITY CARE- JERRY
CARE PROVIDES FREE CARE FOR
PERSONS WHO ARE UNINSURED OR
UNDERINSURED OR PRESERVE ACCESS
TO CERTAIN SERVICES SUCH AS
EMERGENCY SERVICES. WOMEN'S
REPRODUCTIVE HEALTH CARE
SERVICES NEONATAL SERVICES AND
OTHER ESSENTIAL HEALTH CARE
SERVICES TO NAME A FEW. FOR
EXAMPLE IN TWO THOUSAND AND
EIGHTEEN- WHEN THE ATTORNEY
GENERAL'S OFFICE CONDITIONALLY
APPROVED THE DIGNITY HEALTH
CARE MERGER WITH CATHOLIC
HEALTH CARE INITIATIVE. THE
EACH YOU REQUIRE THAT THE NEWLY
FORMED AT SYSTEM PROVIDE ADD
DISCOUNTS TO UNINSURED PATIENTS
EARNING UP 2210050% OF THE
FEDERAL POVERTY LEVEL AND TO
MAINTAIN EMERGENCY AND WOMEN'S
HEALTH CARE SERVICES FOR TEN
YEARS. AND REQUIRED PUBLIC
ACCORDING TO THE OFFICE IF
REPRODUCTIVE SERVICES. WERE
DISCONTINUED AFTER THIS TIME. I
REVIEW PROCESS AND A PUBLIC
MEETING TO HEAR COMMENTS FROM
THE AFFECTED COMMUNITY- WE ALSO
SOLICIT COMMENTS ON OUR WEBSITE
AND MEMBERS OF THE PUBLIC.
DOCTORS PATIENTS AND I AM
PLEASE ELECTED OFFICIALS
ADVOCATES AND OTHERS ARE
ENCOURAGED TO SUBMIT WRITTEN
COMMENTS OR TRENDS THAT I'M
TRANSACTIONS AND ATTEND THE
PUBLIC MEETING. THIS HELPS
INFORM OUR WORK THE REVIEW
PROCESS ALSO INVOLVED WHEN
NECESSARY PREPARATION OF
INDEPENDENT HEALTHCARE IMPACT
REPORTS TO EVALUATE WHETHER THE
TRANSACTION MAY CREATE A
SIGNIFICANT EFFECT ON THE
AVAILABILITY ACCESSIBILITY OF
HEALTH CARE SERVICES TO THE
AFFECTED COMMUNITY. INCLUDING
COMPETITION CONCERNS AFTER THE
TRANSACTION HAS BEEN APPROVED
FACILITY OR HOSPITAL MAY
REQUEST A SUBSTANTIVE CHANGE
IMPOSED THAT HAVE BEEN IMPOSED
CONDITION IF THERE'S AN
UNFORESEEN CHANGE IN
CIRCUMSTANCE AT THE FACILITY OR
SYSTEM. JUST OUTLINED. TIME TO
GIVE YOU A SNAPSHOT OF THE
TRANSACTIONS IN THE LAST TWO
YEARS- BY THE END OF TWENTY
TWENTY OF THE ATTORNEY
GENERAL'S OFFICE WILL HAVE
REVIEWED APPROXIMATELY ONE NEW
HOSPITAL TRANSACTION AND THREE
NEW CONTINUING CARE FACILITIES
OPERATING A SKILLED NURSING
FACILITY I IN TWO THOUSAND
NINETEEN THE ATTORNEY GENERAL'S
OFFICE REVIEWED APPROXIMATELY
FOUR HOSPITAL TRANSACTIONS- AND
ONE RETIREMENT COMMUNITY
OPERATING A SKILLED NURSING
FACILITY OBVIOUSLY THIS IS
COMPLICATED BY THE FACT THAT
SOME TRANSACTIONS- LIKE THE
VERY TRANSACTION FOR INSTANCE.
TAKE MULTIPLE YEARS TO RESOLVE.
OKAY SO NOW THAT I HAVE
DISCUSSED. THE ATTORNEY
GENERAL'S. OVERSIGHT AUTHORITY
I'M GONNA TALK TO A LITTLE BIT
ABOUT THE GAPS IN THE ATTORNEY
GENERAL'S REVIEW AUTHORITY.
WHILE THE ATTORNEY GENERAL HAS
THE AUTHORITY UNDER
CORPORATIONS CODE SECTION FIFTY
NINE FOURTEEN TO FIFTY NINE
TWENTY SIX. IT STILL HAS A LOOK
AT IT STILL LIMITED TO SPECIFIC
TYPES OF HEALTHCARE FACILITIES.
AS SUCH ONLY PORTION OF THE
HEALTHCARE TRANSACTIONS THAT
OCCUR IN CALIFORNIA EVER
REVIEWED BY THE ATTORNEY
GENERAL'S OFFICE. ONLY THE
LARGEST MERGERS ARE EVER
REVIEWED BY THE FTC LEAVING
MANY TRANSACTIONS WITHOUT ANY
OVERSIGHT. I BOUGHT THIS ONE OF
THE- IS THAT MANY TYPES OF
TRANSACTIONS ESCAPE THE
ATTORNEY GENERAL'S REVIEW. ONCE
THEY DO NOT GET OVERSIGHT
INCLUDE. TRANSACTIONS ONLY
INVOLVING FOR PROFIT PROFIT
CORPORATIONS WHICH INCLUDE
PRIVATE EQUITY GROUPS HEDGE
FUNDS AND FOR PROFIT HOSPITALS-
TRANSACTIONS IN INCLUDING THAT
INVOLVING THE PURCHASE OF
CERTAIN TYPES OF HEALTHCARE
FACILITIES INCLUDING PHYSICIAN
GROUPS. OTHER CLINICS OR LABS
OUTPATIENT SETTINGS LIKE
AMBULATORY SURGICAL CENTERS
AMONG OTHERS. I'M HAS PROFESSOR
KING NOTED- THIS IS
PARTICULARLY SIGNIFICANT
BECAUSE WE SEE THIS AS A DRIVER
OF COSTS AT. ONE OF THE STATE
WAS STUDIES HAVE FOUND THAT
PRICES FOR SERVICES PROVIDED BY
ACQUIRED POSITIONS INCREASED BY
AN AVERAGE OF 14% POST
ACQUISITION. OTHER TRANSACTIONS
THAT ARE NOT REVIEWED BY THE
TWENTY GENERAL'S OFFICE INCLUDE
TRANSACTIONS BOB I PUBLIC
ENTITY TRANSACTIONS INVOLVING
PUBLIC HOSPITALS TEN
TRANSACTIONS WHERE AT AND THEN
IT TRANSACTIONS THAT WHETHER
NONPROFIT FACILITY HAS DECLARED
BANKRUPTCY CREATE A SPECIAL.
UNIQUE PROBLEM M. BECAUSE
THERE'S A NATURAL TENSION
BETWEEN THE GOALS OF THE
BANKRUPTCY COURT AND THE
CONDITIONS IMPOSED BY THE AG TO
PRESERVE THE ACCESSIBILITY AND
AVAILABILITY OF HEALTH CARE
SERVICES SO WE HAVE. WE'VE SEEN
IN IN THOSE TRANSACTIONS THAT.
THAT THERE ARE LIMITS TO OUR
ABILITY TO IN IMPOSE CONDITIONS.
I'M I'M ANOTHER SHORTCOMING IS
THE LACK OF NOTIFICATION
REQUIREMENTS HI THE ATTORNEY
GENERAL RETAINS THE AUTHORITY
TO CHALLENGE ANY ANTI
COMPETITIVE HEALTH CARE MERGER
WE HAVE ESTABLISHED EXPERTISE
IN REVIEWING THESE TRANSACTIONS
FROM A COMPETITION PERSPECTIVE
I'M CHALLENGING AND TAKE ON.
COMPETITIVE TRANSACTIONS AND
BRINGING CASES LIKE SATURDAY TO
CHALLENGE ANTI COMPETITIVE
CONDUCT HOWEVER THE MORE
EFFECTIVE ANTITRUST ENFORCEMENT
AUTHORITY WOULD REQUIRE THAT
THE AG RECEIVED PRIOR
NOTIFICATION OF ALL RELEVANT
HEALTHCARE TRANSACTIONS WITH
SUFFICIENT TIME TO REVIEW AND
APPROVE THEM. I'M AS SHOCKED AS
A PROFESSOR CAN NOTICE- PRODUCT
PROBLEMATICALLY UNDER THE HART
SCOTT RODINO NOTICED THERE FILL
THE AGL ONLY RECEIVED NOTICE OF
QUITE LARGE TRANSACTIONS. THIS
DOESN'T TAKE INTO ACCOUNT
SMALLER MERGERS ARE THEY DON'T
ACCEPT CASH HOLD OR
TRANSACTIONS INVOLVING
HEALTHCARE FACILITIES FOR
PROVIDERS LIKE AMBULATORY
SURGICAL CENTERS OUTPATIENT
CLINICS PHYSICIAN PRACTICES AND
LAST. THESE TRANSACTIONS ARE
RARELY REACH THE PRE MERGER
REVIEW THRESHOLD FOR REVIEW BY
FEDERAL TO GO REGULATORS SO
CONDUCT CONSOLIDATION MAY OCCUR.
WITHOUT FEDERAL OR STATE
OVERSIGHT. I A RESULT OF THIS
CONSOLIDATION IT- IT IS K.
REGULAR SCRUTINY WHILE STILL IF
MARKET POWER AND HEALTH CARE
PRICES. SO. CURRENTLY THE
EIGHTY TWENTY GENERAL MUST RELY
OTHER MEANS LIKE A NEW REPORTS
ANOTHER SOURCES TO TRACKING
CALL OF FOR HOSPITALS IN
PHYSICIANS. OR OTHER HOW CARE
IF IT'S- AS A RESULT OF THE
AGES OFF MAY BE ON OF THE TRANS
IN THEREFORE I TO IT AFTER IT
COMPLETED- IT'S MUCH MORE
DIFFICULT US TO ON. IT THAT HAS
EVER OCCURRED WHICH IS
INCREASES THE IMPORTANCE OF
CREEK TRANSACTION REVIEW BY THE
ATTORNEY GENERAL. I'M ONE OF
THE CONSEQUENCES OF THIS BOTTOM
GRATIFICATION IS THE DIFFICULT
AND CHALLENGING A TRIP. IN
CHALLENGING A TRANSACTION AFTER
THE FACT. WITHOUT PROPER
NOTIFICATION THE ONLY RECOURSE
IS TO ENGAGE IN AN
INVESTIGATIVE ANALYTICS AND
LITIGATION PROCESS THAT IS
ARGUE IT. OUT WITH THE END
RESULT IS HIGHLY UNCERTAIN ON
THE OUTCOME DEPENDS ON THE
INDICATIVE. IS THAT THE JUDGE
WAS IN MAKING INDEPENDENT
DECISIONS BASED ON CASE LAW.
RATHER THAN DEPENDING ON THE
AGENCY THAT HAS BUILT UP
EXPERTISE OVER TIME AS WAS
INITIALLY ENVISIONED. ON
FURTHER UNDER THE CURRENT LAW
THE AGL HAS THE ABILITY TO I'M
I'M DO YOU. MURDERS
RETROACTIVELY TRANSACTION
RETROACTIVELY ONLY IF WE SEE
THE NEGATIVE EFFECTS ON ONCE
THEY MANIFESTED THEMSELVES AT
WHICH TIME IT MAY BE DIFFICULT.
TO UNSCRAMBLE THE EGG SO TO
SPEAK. ALBUM IS WORSENED BY THE
FACT THAT THE CUMULATIVE
CUMULATIVE EFFECT OF
TRANSACTIONS BUYING ONE YOU
KNOW POSITION GO BETTER TIME TO
MARKET IS MORE DIFFICULT TO
TRACK AND DO. SO IN CONCLUSION
WHILE THE ATTORNEYS GENERAL'S
OFFICE THIS CURRENT ORDER
ALLOWS FOR OVERSIGHT OF
NONPROFIT HEALTH HOSPITAL
TRANSACTIONS MANY TRANSACTIONS
ARE NOT SUBJECT TO OVERSIGHT
WHICH LEAVES A GAP AND IN
BALANCE AND OVERSIGHT. AND THE
LACK OF NOTIFICATION.
REQUIREMENTS OF ANYTHING BUT
VERY LARGE TRANSACTIONS ARE HOW
THE CURRENT LAW IS APPLIED TO
ONLINE CONTRACTS AND
TRANSACTIONS ONLY AFTER THERE'S
AN ACCUMULATED NEGATIVE ANTI
COMPETITIVE THE FAX. AND THE
DIFFICULTY IN BRINGING A
LAWSUIT AFTER THE FACT MEANS
THAT THE CURRENT AW IS VERY
LIMITED IN CHECKING UNFETTERED
HEALTHCARE CONSOLIDATION. I'M
THANK YOU FOR YOUR TIME I'M
HAPPY TO ANSWER ANY QUESTIONS.
THANK YOU I THINK IT WOULD LIKE
TO DO THE SECOND SPEAKER IN THE
PANEL FIRST IF THAT'S OKAY WE
ARE YOU ABLE TO STICK AROUND.
YES OF COURSE OKAY GREAT THANK
YOU VERY MUCH. SO OUR SECOND
SPEAKER ON THIS PANEL OR SECOND
WITNESS IS- MERRY WHAT NOT ME.
SHE'S THE ACTIVE ACTING
DIRECTOR DEPARTMENT OF MANAGED
HEALTH CARE- SHOULD BE
TESTIFYING BY PHONE ARE YOU OUT
THERE. ADAM DIRECTOR. YES I'M
HERE CAN YOU HEAR ME YES WE CAN
YEAH PLEASE PLEASE GO AHEAD ALL
GREAT OKAY ALL RIGHT WELL GOOD
MORNING AGAIN I'M VERY WATCH
LOBBY THE ACTING DIRECTOR OF
THE DEPARTMENT OF MANAGED
HEALTH CARE I AM JOINED BY A ON
THE PHONE BY NANCY VARNER
ACTING DEPUTY DIRECTOR OF OUR
UP EQUIPMENT BY THREE. OF THE
DIMITRIEF MISSION IS TO PROTECT
CONSUMERS HEALTH CARE RIGHT AND
ENSURE A STABLE HEALTHCARE
DELIVERY SYSTEM MORE THE STATE
AGENCY RESPONSIBLE FOR
LICENSING AND REGULATING A
HUNDRED THIRTY ONE HEALTH CARE
SERVICE PLANS PROVIDE HEALTH
COVERAGE TO MORE THAN TWENTY
SIX MILLION CONSUMERS WE
REGULATE MORE THAN 96% OF THE
COMMERCIAL AND GOVERNMENT
HEALTH PLAN ENROLLMENT IN THE
STATE AND WE WERE INVITED HERE
TODAY TO PROVIDE INFORMATION
REGARDING OUR AUTHORITY TO
REVIEW HEALTH PLAN
CONSOLIDATION. MY REMARKS WILL
DESCRIBE OUR ROLE REGARDING
HEALTH PLAN MERGERS AND
ACQUISITION OUR GOAL REGARDING
NON PROFIT HEALTH PLAN
RESTRUCTURING HOW WE MONITOR
NEGOTIATED UNDERTAKING AND THE
REVIEW OF SOME OF THE MORE
SIGNIFICANT MERGERS THE DNA
PEOPLE FORGET EVERYTHING. HERE
THE LOCAL START WITH OUR OVER
WITH RESPECT TO REVIEW OF
HEALTH PLAN MERGERS ACT. ALL
POLL WITHIN TEN DOUBLE AND WITH
OR IN INTO A AGREEMENT. THAT WE
BOTH IN THEIR PER OUR- OR
CONTROL BY ENTITY INCLUDING
ANOTHER WHOLE IN. MUST GIVE
NOTICE TO THE DNA THE RECEIVE
APPROVAL BEFORE COMPLY THE
TRANSACTION. UNTIL EIGHTEEN THE
DEPARTMENT AUTHORITY TO REVIEW
THESE CONSOLIDATION WHAT THE
PARENTS IN OUR LICENSING
AUTHORITY AND THE REQUIREMENT
THAT LICENSED HEALTH PLANS
BETWEEN APPROVAL FOR MATERIAL
MODIFICATIONS THAT ARE LIKE
THAT. MERGERS AND OTHER CHANGES
IN CONTROL CALL PART OF
MATERIAL MODIFICATIONS AND
TRIGGERED OUR REVIEW. IN TWENTY
EIGHTEEN ASSEMBLY BILL FIVE
NINE FIVE AUTHORED BY THE CHAIR
CODIFIED AND CLARIFIED THE
AUTHORITY AND ITS OWN ARTICLE
THE KNOX KEEN ACT AND ADDED
SEVERAL KEY COMPONENTS TO THE
RADIO. OUR PRIMARY FOCUS WHEN
REVIEWING MERGERS IS TO ENSURE
HEALTH PLAN TO COMPLY WITH THE
STRONG CONSUMER PROTECTION AND
FINANCIAL. WITH THE
REQUIREMENTS OF THE KNOX KEEN
ACT. OUR REVIEW OF MERGERS
BETWEEN HEALTH PLAN FOCUSES ON
MANY FACTORS INCLUDING THE
ORGANIZATIONAL AND
ADMINISTRATIVE CHANGES SUCH AS
CHANGES AGREEMENT FROM APPEAL
PROCESS THE UTILIZATION
MANAGEMENT AND CLINICAL
DECISION MAKING. WE ALSO REVIEW
HEALTH DELIVERY SYSTEM CHANGES
SUCH AS CHANGES TO A PROVIDER
NETWORK. AND ANY CHANGES TO
PRODUKTER SUBSCRIBER CONTRACTS
THAT COULD IMPACT ENROLLEES
pINCLUDING CHANGES TO SUBSCRIBER
DOCUMENTS. SUCH AS EVIDENCE OF
COVERAGE DOCUMENT. WE ALSO
REVIEW. CHANGES INCLUDING
IMPACT OF POTENTIAL ADEQUATE
WORK KAPPA. OPERATIONS PAYMENT.
ORGANIZATIONAL STRUCTURE PRE
AND POST POST TRANSACTION TO
UNDERSTAND WHO WILL HOLD
CONTROL. OF BOTH THE FINANCING
OF THE TRANSACTION AND THE
IMPACT OF THE PLANTS FINANCIAL
STABILITY. AS I MENTIONED AB
FIVE NINE FIVE ADDED COMPONENTS
TO THIS REVIEW AND GAVE IT MORE
SPECIFICITY IN THE LOCKHEED
ACT. AND ALLOW THE GMAC TO
DISAPPROVE A TRANSACTION OR
AGREEMENT IF IT FAILED TO
SATISFY THE MARKET ACT OR IT
WOULD BE ACTUALLY LESS THAN
COMPETITION IN HEALTHCARE
SERVICE PLAN PRODUCT OR CREATE
A MONOPOLY IN THE STATE AB
FIVE NINETY FIVE ALSO. THAT THE
DNA MAKE INTO CONTENT IT THE
TRANSACTION OR AGREEMENT.
INDIGENT CONTINGENT ON THE
PLANT AGREEMENT UP UNTIL
CONDITIONS ARE WHAT WE REFER TO
AS AFTER TAKING. TO BENEFIT
ENROLLEES ARE PROVIDE FOR A
STABLE HEALTHCARE DELIVERY
SYSTEM. DO YOU MAKE THE MOST
ENGAGE STAKEHOLDERS TO
DETERMINE TE MEASURES FOR
IMPROVEMENT. A MAJOR TRADE. ARE
GREEN THE DMH THE AS REQUIRE TO
OBTAIN AND ENDED ABOUT. OF THE
TRENDS IMPACT A WHOLE OPEN
PUBLIC MEETINGS REGARDING THE
TRANSACTION. MAJOR TRANSACTIONS
ARE AGREEMENT ARE THOSE THAT
AFFECT A SIGNIFICANT NUMBER OF
ENROLLEES INVOLVED A MATERIAL
AMOUNT OF ASSETS. OR ADVERSELY
AFFECT EITHER THE ENROLLEES OR
THE STABILITY OF THE HEALTHCARE
DELIVERY SYSTEM BECAUSE OF THE
MARKET THE SHOT. AB FIVE NINETY
FIVE REQUIRES THE GEOMETRICAL
CARE UP PUBLICLY AVAILABLE
STATEMENT DESCRIBING ANY
TRANSACTION OR AGREEMENT THAT
INVOLVES THE MATERIAL AMOUNT OF
HEALTH PLAN ASSETS. AND FINALLY
AB FIVE NINETY FIV REQUIRES
HEALTH PLANS TO REIMBURSE THE
DMH BEFORE THE COST OF
REVIEWING THE MERGER. THE ACT
OF AB FIVE NINETY FIVE IN
TWENTY EIGHTEEN BUDGET MAKES
THE HAS NOT REVIEWED OR MERGER
OR OTHER QUALIFYING TRANSACTION.
THAT IT HAS DETERMINED TO BE A
MAJOR TRANSACTION UNDER THE LAW.
AND NOW MOVE ON TO DISCUSSING
OUR ROLE WITH RESPECT TO
NONPROFIT HEALTH PLAN
RESTRUCTURING. IN ADDITION TO
ALL OF THE ISSUED THE DNA
TESTING MUST CONSIDERED ITS
REVIEW OF ANY HEALTH PLAN
MERGER IF THE MERGER INVOLVED A
NONPROFIT HEALTH PLAN THAT IS
CONVERTED ARE RESTRUCTURING TO
A FOR PROFIT HEALTH PLAN. THE
DO YOU MAKE THE MOST REVIEW THE
TRANSACTION UNDER THE
REQUIREMENTS SET FORTH IN
ARTICLE ELEVEN OF THE KNOX KEEN
ACT. ARTICLE APPLIES WHEN
TROOPS. ARE PRESENT. FIRST
APPOINTMENT BE A NONPROFIT
CORPORATION THAT HAS OUT THAT
SUBJECT TO A TERRIBLE TERRIBLE
TRUST OBLIGATION. AND CHIU AT
THE NONPROFIT PLAN HAVE SUCH
OUT THAT THE PLAN MUST BE
RESTRUCTURING OR SELLING THE
POTENTIAL PORTION OF ITSELF IS
TO OPPOSE. FOR PROFIT ENTITY. A
LOT OF SCRIBES THE RULES.
HEALTH PLAN MCFALL REACHED OF
CONVERTING THEIR ACTIVITIES
FROM BONN. NONPROFIT TO FOR
PROFIT WITH THE GOAL OF
ENSURING THAT THE NONPROFIT
PLANS CHARITABLE ASSETS ARE
PROTECTED UNDER UPON CONVERSION.
THE DEMONS WE HAVE. REVIEWING
IT FIRST TRANSACTION THAT
QUALIFIES UNDER ARTICLE LIFE
AND SINCE IT WAS ADDED TO THE
KNOX KEEN ACT IN NINETEEN
NINETY FIVE. TRANSACTION
INVOLVED STANFORD HEALTHCARE
DAMAGE WHICH OPERATE THE
MEDICARE ADVANTAGE PLAN WITH
APPROXIMATELY FORTY SIX HUNDRED
IN RALEIGH AREA. IN THIS
PROPOSED TO CONVERT FROM A
NONPROFIT PUBLIC BENEFIT
CORPORATION TO A FOR PROFIT
CORPORATION. INDIA MAKES IT
WILL HOLD A PUBLIC HEARING ON
THE TRANSACTION ON DECEMBER
EIGHTH THAT'S REQUIRED UNDER
THE LAW. AND FINALLY I'LL
PROVIDE A BRIEF OVERVIEW OF OUR
MONITORING AND ENFORCEMENT OF
COMPLIANCE WITH NEGOTIATED
UNDERTAKING- AS I MENTIONED
EARLIER THE DAMAGE THEY CAN
REQUIRE HEALTH PLANS TO COMMIT
TO MAKING CERTAIN IMPROVEMENTS
IN THEIR HEALTHCARE DELIVERY
SYSTEM PART OF OUR APPROVAL
PROCESS FOR MERGERS AND
ACQUISITIONS. THESE COMMITMENTS
THAT WE CALL UNDERTAKINGS ARE
ALSO USED TO ENSURE. MERGERS
BENEFIT CALIFORNIA CONSUMERS.
HISTORICALLY UNDERTAKING SEVEN
COLLUDED REQUIREMENTS FOR PLAN
TO INVEST IN SOLVING
SIGNIFICANT INDUSTRY ISSUES.
SUCH AS DEVELOPING A STATEWIDE
CENTRALIZED PROVIDER DIRECTOR
DATA BASE TO IMPROVE THE
ACCURACY OF PROVIDER DATA. AND
EFFORTS TO IMPROVE ENCOUNTER
DATA. UNDERTAKING LEARN FOR
SMOKING AGREED TO BY THE PLANE.
SOME UNDERTAKEN TO REQUIRED
PLANTS WITH THE NET POSTMARK
INFORMATION AND THE DMH THE
MONITORS STERN SURE THEY KEEP
THE COMMITMENT THEY'VE MADE THE
MERGER PROCESS. DMH THE STAFF
EACH PLAN FOR CARE TO THE PLAY
MEDIA IT'S CAN. THE DMH EMAIL
WILL CONDUCT ON SITE AUDITS
DETERMINE THE PLANET COMPLYING
WITH THE UNDERTAKINGS. AND WE
ALSO UP ON THESE UNDER DURING
OUR BREAK SCHEDULED FINANCIAL
EXAM AND MEDICAL. ALL CONCLUDE
BY HIGHLIGHTING A COUPLE OF THE
SIGNIFICANT MERGERS THAT WE'VE
REVIEWED IN RECENT YEARS-
THERE'S BEEN SEVERAL
SIGNIFICANT PROPOSED HEALTH NET
HEALTH PLAN MERGERS THAT HAVE
BEEN SUBJECT TO REVIEW BY THE
DMH- THE THROWING STARTED ABOUT
FIVE YEARS AGO- WHAT WE REFER
TO AS MERGER MANIA ONE POINT
NOW- AND IT STARTED WITH BLUE
SHIELD ONE POINT TWO BILLION
ACQUISITION OF CARE FIRST
HEALTH PLAN. WHICH WE APPROVED
IN OCTOBER OF TWENTY FIFTEEN-
THE DODD TRANSACTION BROUGHT
BLUESHIELD INTO THE MEDICAL
MEDICAL PROGRAM FOR THE FIRST
TIME. WE ALSO APPROVED
CONTINUED ACQUISITION OF HEALTH
NET AND A SIX POINT EIGHT
BILLION DOLLAR MERGER. IN MARCH
OF TWENTY SIXTEEN. THERE WERE
TWO WOULD MORE BUT NATIONAL AND-
AT THE THIRD SEVENTH. DOLLAR
ACTED OF HUMANA ANTHEM FIFTY
FOUR POINT TWO BILLION DOLLAR
ACQUISITION OF BIG BASS. BOTH
OF THESE WERE BLOCKED BY
FEDERAL JUDGES IN TWENTY
SEVENTEEN. LOCATED FEDERAL
DEPARTMENT OF JUSTICE THE
JUSTICE SICK PERSONALLY SUED TO
STOP THE TRANSACTION. UNDER
ANTITRUST LAWS. IN TWENTY
EIGHTEEN PRIOR TO AB FIVE
NINETY FIVE TAKING EFFECT THE
DMH THE REVERED SEGMENTS FIFTY
FOUR BILLION DOLLAR ACQUISITION
OF PHARMACY BENEFIT MANAGER
EXPRESS SCRIPTS. AND CVS
HEALTH'S SIXTY NINE BILLION
DOLLAR ACQUISITION OF AT. AND
UNITED AND UNITED HEALTH OPTUM
UNIT FOUR POINT THREE BILLION
DOLLAR ACQUISITION OF DAVITA
MEDICAL GROUP WHICH CLOSED IN
TWENTY NINETEEN. AS I MENTIONED
EARLIER IS PART OF THE APPROVAL
PROCESS IF YOU MAY BE ABLE TO
SECURE COMMITMENTS FROM PARTIES
THAT BENEFIT- CALIFORNIA'S
HEALTHCARE DELIVERY SYSTEM. FOR
EXAMPLE IN THE SEGMENT EXPRESS
SCRIPTS TRANSACTION THEY AGREED
TO A SIXTEEN MILLION DOLLAR
INVESTMENT IN CALIFORNIA'S
HEALTH CARE DELIVERY SYSTEM.
INCLUDING TEN MILLION TO
INCREASE THE NUMBER OF
HEALTHCARE PROVIDERS AND
UNDERSERVED COMMUNITIES BY
FUNDING SCHOLARSHIPS AND LOAN
REPAYMENT PROGRAM. UNDER THE
HEALTH PROFESSIONS EDUCATION
FOUNDATION. THEY ALSO COMMITTED
SEVEN POINT FIVE MILLION TO
SUPPORT CALIFORNIA PROGRAMS
THAT ADDRESS SOCIAL
DETERMINANTS OF HEALTH AND TWO
POINT FIVE MILLION TO IMPLEMENT
AND MAINTAIN PROGRAMS THE
POLICIES THAT ADDRESS THE
OPIATE CRISIS RIGHT THE- RUBIO.
KNOW I AGREE TO INVEST NEARLY
TWO HUNDRED FORTY MILLION
CALIFORNIANS HEALTHCARE
DELIVERY SYSTEM WHICH INCLUDED
TWENTY TWO POINT EIGHT MILLION
PER SCHOLARSHIP JAMAL REPAYMENT
PROGRAM UNDER THE HEALTH
PROFESSIONS EDUCATION FUND. AND
THREE MILLION TO PROVIDE FREE
DENTAL CARE TO PATIENTS
EXPERIENCE BARRIERS TO CARE.
THANK YOU AGAIN FOR INVITING
THE DMA THREE TO PROVIDE
TESTIMONY TODAY THAT CONCLUDES
MY PREPARED REMARKS BUT I'M
HAPPY TO TAKE QUESTIONS. THANK
YOU VERY MUCH AND YOU HAVE
PLEASE HANG WITH US AND WE WILL
HAVE QUESTIONS- ASSEMBLY MEMBER
BURKE ANY QUESTIONS. MICHAEL
MISTER NAZARIAN THE QUESTION- I
DO HAVE SOME QUESTIONS IN A
SAUCE OR START SINCE YOU'RE ON
THE PHONE RIGHT NOW- MERRY I'LL
GO AHEAD WITH WITH YOU- YOU
KNOW. WHAT YOU WHEN YOU LOOK AT
WHEN YOU'RE LOOKING WHEN YOU
WERE LOOKING AT- GMAC WAS
LOOKING AT- THE PBM MERGERS
AND- BUT WAS IS PART OF THAT
PROCESS LOOKING AT WHAT THE
POTENTIAL IMPACT MIGHT BE TO
PRESCRIPTION DRUG PRICES- AND
IF SO. YOU KNOW WHAT WHAT DID
YOU FIND. OKAY ABOUT WHAT MAKES
THE TYPICALLY PART OF OUR RUBIO
THAT. TRANSACTION OCCURRED
BEFORE OUR AB FIVE NINETY FIVE
WITH THE PLACE- AND WILL REALLY
LOOKING FOR COMPLIANCE WITH THE
COMPONENTS OF THE BOX CARE ACT
A AND- AGAIN THE IMPACT ON THE-
ON BOTH PLANTS FINANCIAL ALSO
LOOKING AT THE IMPACT OF. OUR
APARTMENT THE COST WAS NOT.
PART OF OUR GREAT THE- SO WE
REALLY SO THE CAN. WE DON'T
KNOW- WE DON'T REALLY HAVE A
GOOD- FEELING FOR WHAT THAT
CONSISTS THE CONSOLIDATION HAS
DONE TO PRESCRIPTION DRUG
PRICES IS THAT FAIR TO SAY.
POST I MEAN I OBVIOUSLY DON'T
HAVE THE TOOLS TO DO IT BUT-
POST MERGER WE REALLY DON'T
KNOW WHAT THE IMPACT
PRESCRIPTION DRUG PRICES HAS
BEEN CORRECT. ARE YOU- ARE YOU
CONSIDER AS YOU CONSIDERED ANY
UNDERTAKINGS OR CONDITIONS ON
APPROVAL. DO YOU LOOK AT DID
YOU LOOK AT. OR CONSIDER
AFFORDABILITY OR IMPACTS TO
ENROLLEES OUT OF POCKET COSTS
LIKE CAR SHARING SIR PREMIUMS
IS THAT PART OF. HIS UP PART OF
YOUR PROCESS. YOUR NUMBERS A
NUMBER OF THINGS THAT WE
CONSIDER WERE MADE WE LOOK AT
UNDERTAKING- THIS IS PART OF.
THE PUBLIC COMMENT THAT WE GET
OUR THAT OUR PUBLIC MEETING-
AND A NUMBER OF THINGS THAT WE
LOOK AT INCLUDE AREAS WHERE
THERE ARE DEFICIENCIES ARE
OTHER COMPLIANCE ISSUES WITH
THE DEPARTMENT AND ONE OF THE
AREAS THAT WE HAVE INCLUDED
UNDERTAKING. IF SOMEBODY
TRANSACTION WHERE WE HAVE HAD-
HEALTH PLANS THAT HAVE PRECEDED
WITH- UNREASONABLE RATE
INCREASES AND I THINK THAT
PROBABLY THE BEST EXAMPLE
THERE. WITHIN THE CVS AETNA
TRANSACTION- AT THE STORE
COOLEY HAD PROCEEDED WHERE-
INCREASING. TO FIGHT OUR
FINDING THAT THEY WERE
AGGRIEVED- SO DO YOU I THINK IT
FAMILIAR WITH RATE WE PROCESS
YOU BREAK REVIEW ABOUT
INDIVIDUAL AND SMALL MARKETS
AND SELLS HAD A CAN DO IN THE
UNDER. UNTIL THE PF AT THAT
ACTUALLY COUPLE COUPLE- ARE ONE
OF THE OTHER ONES THAT IT WITH
THE NEXTRA. SCRIPT AS WELL-
WHERE THEY GO NOT INCREASE PRE
OF OVER OF ACT WITH- AND TO
KEEPING TO ABOUT SO WE DO-
YOU'RE TOGETHER TAKING PROFITS
TO AND UNDER TO. MAKE SURE THAT.
OF THE NUMBER IS CAPTAIN
CONSUMER MAKE THOSE PREMIUM
RIGHT TO A MINIMUM. GREAT THANK
YOU- DO YOU HAVE ANY- OVERSIGHT
OF THE- REGARD- YOU KNOW AFTER
THE FACT IN. OF WHAT PLAN CAN.
DONE AND OR RISING COSTS RELATE
TO THOSE CA. YOU HAVE ANY ANY
OVERSIGHT AUTHORITY THERE. I
REALLY DON'T THINK THAT WE
ZERO- YOU KNOW WE MONITOR THAT
THE PLANS ARE- WE HOLD THEM
ACCOUNTABLE TO WHAT THEY GREET
YOU WITH THE UNDERTAKING FROM
THE CONDITION- OF THE
ACQUISITION- I'D MAYBE LET ME
TURN TO NANCY ON THE- AND- YEAH
YOU GOT THE PART THAT ANY OF
OUR- FORTY. REPEAL PARTS. I'M
EXCITED CAN'T EXCEPT- RELATED
TO BE UNDERTAKING READ THE BOOK
PLAN HAVE TO FILE A REPORT EACH
YEAR EXPLAINING HOW THEY COMPLY
WITH EACH UNDERTAKING
INCLUDING. NOT RAISING
PREMIUMS- UNNECESSARILY ARE
RELATED TO THE TRANSACTION.
OKAY ALL RIGHT GREAT WELL THANK
YOU THINK THANK YOU TO BOTH OF
YOU APPRECIATE THAT. I'M GONNA
MOVE ON MY QUESTIONS- BACK TO-
RADICA I MISS MISS GEORGE WITH
THE AG'S OFFICE. HELLO HELLO
WELCOME BACK- A COUPLE I HAVE A
COUPLE QUESTIONS FOR YOU CAN
YOU- WE TALKED ABOUT THE END OF
THE CHALLENGES IN PURSUING ANTI
TRUST LITIGATION- AND THAT YOU
KNOW THERE ARE THE YOU YOU
PERCEIVE THAT THE- GAPS IN THE
STATE AND FEDERAL LAW MAKE IT.
ESPECIALLY DIFFICULT TO PURSUE
OR ARE WE JUST SEEING A LACK OF
INTEREST PARTICULARLY AT THE
FEDERAL LEVEL. WELL I WOULD SAY
AND I THINK THAT. THERE'S TWO
PARTS TO IT THE FIRST PART YOU
KNOW. AS I NOTED IN MY
TESTIMONY THERE'S HE ISSUE OF
WHY I'M ACTUALLY COMES TO THE
NOTICE OF- FEDERAL AND STATE
REGULATORS ON. AS AT PROFESSOR
KING NOTED- THE IT IT'S ONLY
THINGS THAT CON- WITHIN THE
HEART HEART SCOTT REGINO
THRESHOLD THAT WOULD COME TO
THE NOTICE OF REGULATORS AND SO
YOU ANYTHING BELOW THAT- IT IS
NOT SOMETHING THAT- WE AS THE
STATE CURRENTLY RECEIVE NOTICE
UP AND SO IT'S- MAKES IT
PROBLEMATIC FOR US TO BE ABLE
TO. ATTACK OVERSIGHT AND FOR
THERE TO BE TRANSPARENCY- WITH
RESPECT TO- ON WINDING
TRANSACTIONS- THE DIFFICULTY IS
MULTI IS THERE'S MULTIPLE
ISSUES- YOU KNOW. ANY TIME YOU
HAVE AN INVESTIGATOR ANY TIME
YOU HAVE TO UNWIND A
TRANSACTION ANYTIME YOU HAVE TO
AND UNDERGO AN INVESTIGATIVE
PROCESS AND AGO LITIGATION. IT
INTRODUCES- I DIFFICULTY AND
TIME TODAY TO ADD TO THE
CHALLENGE INTO THE PROCESS BUT
IT ALSO. INTRODUCES UNCERTAINTY
RIGHT IT'S MUCH MORE DIFFICULT-
TO- NOW TO CHALLENGE AND THEN
HAVE THAT BE DEPENDENT UPON THE
PARTICULAR PARTICULARITIES OF A
JUDGE OR THEIR- ASSESSMENT OF
THE CASE LAW. SO IT'S A
COMBINATION OF FACTORS I WOULD
SAY BOTH THINGS I'M DEFINITELY
I'M MORE NOTICE- OF THESE
TRANSACTIONS BOTH A SMALLER
TRANSACTIONS AND MERGERS AND
ALSO A YOU KNOW A VERTICAL
INTEGRATION SILVA PHYSICIANS'
GROUPS- IN MILITARY CENTERS I
FOR INSTANCE WOULD BE
BENEFICIAL- SORRY CERTAINLY TO
I HELP US- SO WE WHEN YOU'RE
LOOKING AT WHEN YOU'RE LOOKING
AT THE MERGERS THAT YOU'RE
ACTUALLY THAT YOU ACTUALLY. DO
PASSED THE THRESHOLD PROCESS
YOU TAKE INTO CONTENT INTO
ACCOUNT THE HOSPITAL'S
FINANCIAL SITUATION. YES
CERTAINLY WHEN WE ARE IN OUR
TRANSACTION REVIEW PROCESS WE-
LOOK AT THE TOTALITY OF THE
CIRCUMSTANCES SO WE DO TAKE
INTO- INTO ACCOUNT IS THAT IS
THE HOSPITAL I'M GOING TO EXIST
WITHOUT ADD THE TRANSACTION OR
THE AGREEMENT GOING INTO PLACE-
WE AND IN PART OF THAT TOO AS
WE ALLOW FOR PUBLIC COMMENT I'M
IN THE MEETINGS AND WRITTEN-PUBLIC COMMENT THAT GIVES US A
FULL SOME PICTURE OF WHAT'S
GOING ON AND WE DO. AS I NOTED
WE DO I'M ARE WE AND WE TAKE
INTO ACCOUNT A HEALTH IMPACT
REPORT WE TAKE INTO ACCOUNT
COMPETITION FACTOR SO ALL OF
THAT. COMES INTO PLAY IN
DETERMINING WHETHER TO APPROVE
OR CONDITIONALLY APPROVED I
TRANSACTION. SO DO YOU HAVE ANY
IN ANY IN THE SENSE OF- THE
DICKON THE SMALLER
CONSOLIDATIONS THAT ARE BELOW
THE THRESHOLD. YOU HAVE ANY
SENSE OF WHAT THE PERCENTAGE OF
THAT TO THE OVERALL
CONSOLIDATION- COULD MARKET IS
I MEAN. DO WE KNOW DO WE REALLY
KNOW WHERE THESE THEY JUST
THESE THINGS JUST FINE SO FAR
UNDER THE RADAR THAT IT'S
REALLY HARD TO TRACK HIM. I
THINK THAT'S RIGHT AT THAT.
DOCTOR WOULD I'M WE HAVE BEEN
YOU KNOW I THINK IT'S DIFFICULT
TO TRAP THAT BECAUSE WE'RE NOT
GETTING THE NOTICE ON WE HAVE
TO RELY. ON WHAT WE SEE IN THE
NEWS I THINK WE'VE THAT WE'VE
SEEN THAT IT'S BEEN DIFFICULT
TO GET A SENSE OF A PICTURE OF.
OF THESE TYPES OF TRANSACTIONS
THE SMALLER TRANSACTIONS THE
FOR PROFIT TRANSACTIONS- I'M
UNLESS THEY ARE MAKING THE NEWS
AND I'M MUCH WE'RE HEARING
ABOUT IT. I'M OTHERWISE BECAUSE
WE DON'T GET THAT NOTICED. IS
THERE- AND I BRING THIS UP
BECAUSE I I'M THINKING OF- SOME
OF THE- ACQUISITIONS AND
OPERATIONS OF SKILLED NURSING
FACILITIES AND HOW HOW- LAND
MIGHT BE OWNED BY ONE GROUP.
BUT THERE'S ALWAYS A PRINCIPLE
THAT'S CONNECTED TO ANOTHER- IS
IT POSSIBLE THAT IN THE
CONSOLIDATION MARKET THE
SMALLER CONSOLIDATION MARKET
THAT THERE ARE. THAT THERE ARE
ENTITIES THAT ARE COMMON TO
THESE CONSOLIDATIONS. THAT ARE
OPERATING IN SUCH A WAY TO KEEP
THINGS BELOW THE THRESHOLD IS
THAT A POSSIBILITIES SO AS TO
NOT RAISE THE REVIEW PROCESS
WITH THE ATTORNEY GENERAL'S
OFFICE. YES I THINK THAT
CERTAINLY CAN BE A POSSIBILITY
IN AND THE EXAMPLE THAT YOU
PROVIDED IS A GOOD ONE I'M I
THINK YOU SEE THAT A LOT IN THE
SKILLED NURSING. FACILITY
SCENARIO- WHERE THEY'LL BE A
PRINCIPLE THAT HOMES MAYBE LIKE
5% OF ANY PARTICULAR TIME
TRANSACTION AND SO IT'S
DIFFICULT AND TO TRACK AND THEY
MAY NOT. EVEN COME TO THE LEVEL
OF A PERCENTAGE OF OWNERSHIP
FOR US TO BE ABLE TO DIG DEEP
INTO IT. SO FROM YOUR
PERSPECTIVE COULD THERE BE
OTHER REASONS COSTS ARE GOING
UP IN- BEAST BESIDES THE
INTEGRATION I MEAN NO MEDIC
INCREASING MEDICARE POPULATIONS
OF THE RISING COSTS OF DRUGS I
MEAN. THOSE THOSE POSSIBILITIES.
THEY MAY BE BUT REALLY-
VERTICAL HORIZONTAL INTEGRATION
AND CROSSMARK I MARKET A FAX OR
THE SINGLE BIGGEST DRIVER OF
COST ON. IN CONSOLIDATION IN
NEGOTIATING LEVERAGE- SO FROM
OUR PERSPECTIVE THAT AT WE
THINK THAT THIS IS THE BIGGEST
ISSUE AFFECTING HEALTH CARE
CONSOLIDATION RIGHT NOW-
ANOTHER ANOTHER. BIG PART OF
THAT TOO IS THE ANOTHER DRIVER
OF COST IS THE ACQUISITION OF
HEALTHCARE SYSTEMS BY PRIVATE
EQUITY GROUPS AND HEDGE FUNDS-
JUST BECAUSE THERE'S A NATURAL
TENSION BETWEEN- THERE NEED TO
RETURN INVESTMENT IN A CERTAIN
A LIMITED TIME FRAME- I'M IN A
STORE WINDOW AND- THE PROVISION
OF QUALITY HEALTHCARE AT A LOW
COST. SO THESE ARE THE BIG
DRIVERS OF HEALTHCARE COSTS
GROUPINGS AND SO- I HER RT HER
PART OF THE ANSWER BURKE AND I
AND I KNOW FROM EXPERIENCE IN
THE LAST LEGISLATIVE HERE- YOU
KNOW FROM THE AG'S OFFICE
PERSPECTIVE WHAT CAN BE DONE TO
INCREASE OVERSIGHT. OF
INCREASED CONSOLIDATION. YES
THANK YOU EAT. WE BELIEVE THAT
ULTIMATELY THE GOLD STANDARD
WOULD BE TO HAVE SORT OF SOME
SORT OF A OUR- SYSTEM OF REVIEW
OF PRE TRANSACTION REVEAL I'M
GIVING US THE ABILITY. TO LOOK
AT THESE TRANSACTIONS- I'M IN A
STRUCTURED WAY BEFORE I DAY A
CAR ON IT BECAUSE IT'S MUCH
EASIER TO DO THAT THAN TO I'M
I'M SCRAMBLE THE ACHES ASKING-
AND THEN AT THE VERY LEAST
THERE SHOULD BE NOTICED. OF
THESE TRANSACTIONS- BOTH. YOU
KNOW THE MEDIUM SIZE A SMALL
ONES AND- HOW THE SYSTEMS
OUTSIDE PHYSICIANS GROUPS OUT
YOU KNOW. OUTPATIENT CLINICS
THINGS LIKE THAT TIME SO
NOTIFICATION BUT NOT
NECESSARILY. INVESTIGATION AND
JUST I THINK PROVIDE WE REALLY
DON'T KNOW A LOT OF THESE
CONSOLIDATION SO WOULD BE NICE
TO BE ABLE TO FOLLOW AND TRACK.
WHAT'S HAPPENING IN THE MARKET
PLACES OUT OF IS THAT FAIR TO
SAY. I WOULD SAY THE VERY LEAST
WE NEED THAT OBVIOUSLY PRE- PRE
TRANSACTION REVIEW I'M TO BE
ABLE TO DIG INTO THESE. WOULD
BE THE GOLD STANDARD. THANK YOU.
I THINK YOU VERY MUCH FOR TEST
TODAY WE APPRECIATE IT AND-
WE'RE GONNA GO AHEAD AND MOVE
ON TO OUR OUR OUR FINAL SPEAKER
THEN THANK YOU SO MUCH. AND
THAT WOULD BE WERE BRINGING AND
BRINGING IT BACK TO- PROFESSOR
KING. GOOD TO TALK TO US ABOUT
THE APPROACHES TO ADDRESSING
THE HEALTH CARE INDUSTRY
CONSOLIDATION PROFESSOR. THANK
YOU SO MUCH GIVE ME THANK YOU
SO MUCH- I AM DELIGHTED TO BE
BACK TO TALK ABOUT WHAT CAN BE
DONE SO NEXT SLIDE AND I'LL
PICK UP UP RIGHT HERE SO. I
THINK THERE ARE FOUR THINGS
THAT CAN BE DONE FOR AREAS THAT
THAT CALIFORNIA CAN TARGET
FIRST. WE NEED TO WE NEED TO
GET THE DATA WHAT WE
CONSISTENTLY HEARD THROUGHOUT
THIS HEARING AND OTHER HEARINGS
IS THAT IT IS A LACK. OF DATA
ABOUT OUR HEALTH CARE SYSTEM
THAT IS CAUSING US TO NOT HAVE
ALWAYS THE BEST INSIGHTS INTO
THE BEST WAYS TO REGULATE TO
LEGISLATE AND TO ADDRESS THE
PROBLEMS THAT WE FACE- SO
GETTING THE DATA BOTH HEALTH
CARE PRICING DATA BUT ALSO
INFORMATION ON. WHEN
TRANSACTIONS CONSOLIDATING
TRANSACTIONS ARE HAPPENING WHAT
TYPES OF TRANSACTION. WHO IS
CONSOLIDATING MARKET ALL OF
THAT IS AND- FOR YOU HAVE THAT
DATE YOU ALSO NEED AND- AT TO
ANIL IT AND- IN. TO POLICY SO
FIRST THING WE CAN DO IS GET
THE DAY AND BE ABLE TO ANALYZE
THAT. THANK WE NEED TO ANTI
ENHANCE ANY TRY IN FOR. AS MR
TO POINTED OUT NEED TO HAVE
NOTICED FOR- AND ALSO I BELIEVE
A REVIEWER. AND APPROVAL. THIRD
WE NEED A PASSWORD. TO SUPPORT
COMPETITION AND ADDRESS MARKET
DEFICIENCIES AND THEN FOURTH WE
NEED TO ENHANCE AGENCY
OVERSIGHT OVER HEALTH CARE
MARKETS NEXT SLIDE PLEASE.
LET'S START WITH THE DATA SO
CALIFORNIA'S IN THAT- IN THE
PROCESS OF DEVELOPING ITS
HEALTH CARE COST TRANSPARENCY
DATABASE- WHICH WOULD BE GREAT
IT'S AN ALL PAYER CLAIMS
DATABASE AT. AND THAT WILL PUT
CALIFORNIA ON PAR WITH THE
EIGHTEEN OTHER STATES THAT HAVE
EXISTING ALL PAYER CLAIMS DATA
BASES. THESE DATABASES WERE
ORIGINALLY DESIGNED TO HELP
CONSUMERS MAKE BETTER CHOICES
IN THEIR HEALTHCARE AND BE ABLE
TO SEE THE VARIANCE IN PRICE
BETWEEN PROVIDERS AND SELECT
ONE THAT WAS MAYBE HIGHER
VALUE. THIS IS IMPORTANT BUT
IT'S NOT THE MOST IMPORTANT
THING AND THE MOST EFFECTUAL
THING THAT CAN BE DONE WITH
THIS ALL PAYER CLAIMS DATABASE
DATA. THE HIGHEST AND BEST USE
OF THIS DATA IS FOR POLICY AND
ENFORCEMENT. WE'VE SEEN THE
STATE'S THAT HAVE EFFECTIVELY
ANALYZED AND USED THIS DATA.
USE IT IN WAYS TO PROVIDE
ACCURATE INFORMATION ON THE
FUNCTIONING OF THEIR HEALTHCARE
MARKETS. INFORM MERGER AND
ALICE'S AND REVIEW AS THE
HEALTH POLICY COMMISSION IN
MASSACHUSETTS DID SO
SUCCESSFULLY- IN THE PARTNERS
CASE I THINK IT CAN BE USED TO
IDENTIFY THE DRIVERS OF COST
AND TRACK PRICES POST
CONSOLIDATION TO SEE WHAT THE
OUTCOME. OF A MERGER ACTUALLY
WAS- IT CAN BE USED TO TRACK
UTILIZATION AND PRICE TRENDS OF
THE KINDS OF THINGS THAT WE SAW
IN THE DATA WHERE OUR PRICES
WERE VERY HIGH BETTER
UTILIZATION UTILIZATION WAS
VERY LOW IF YOU HAD THAT DATA
YOU COULD DIG INTO IT MORE TO
FIND OUT. WHETHER OR NOT PEOPLE
WERE NOT GOING TO THE DOCTOR
BECAUSE OF THE FEAR OF PRICE.
YOU CAN USE THIS DATA TO
IDENTIFY LOW VALUE SERVICES
INFORM AND PRIORITIZE POLICY
GOALS AND MONITOR POLICY
INITIATIVES. IT CAN ALSO BE
USED- TO ESTABLISH BENCHMARK
PRICING AND HEALTH CARE COST
GROWTH BENCHMARKS AS WE'VE SEEN
IN MASSACHUSETTS SO THIS DATA
CAN BE VERY EFFECTIVE IN LOTS
OF WAYS. FURTHERMORE NEXT SLIDE
AT THE STATE OF FORMS THE
FOUNDATION OF ANY INITIATIVE
THAT THE STATE MIGHT WANT TO.
PROMOTE TO SUPPORT COMPETITIVE
MARKETS SO WHETHER THE STATE IS
LOOKING TOWARDS LITIGATION
LEGISLATION OR REGULATORY
OVERSIGHT WHICH THEY NEED ALL
THREE TO SUPPORT COMPETITIVE
MARKETS. THAT DATA IS REALLY
GOING TO FORM THE FOUNDATION OF
ANY INITIATIVE THAT THEY PUT
FORWARD. NEXT SLIDE PLEASE SO
I'M GONNA TALK A LITTLE BIT
ABOUT THE ROLE OF LITIGATION
BUT IT'S- LESS RELEVANT FOR
THIS COMMITTEE SO I'M NOT GOING
TO SPEND TOO MUCH TIME ON IT-
BUT- THE STATE CAN INTERVENE
THROUGH LITIGATION IN REALLY
THREE WAYS AND THE STORAGE
REALLY POINT AT ALL ALL OF
THESE OUT. SO I WON'T SPEND TOO
MUCH TIME ON IT- NEXT SLIDE.
BUT FIRST IS A PRE MERGER
CHALLENGE WHERE THE STATE CAN
INTERVENE. BEFORE THE MERGER
HAPPENS TO PREVENTIVE
CONSOLIDATION FROM OCCURRING AT
ALL THIS IS REALLY THE GOLD
STANDARD WHEN WE THINK OF ANTI
TRUST ENFORCEMENT YOU WANT TO
PREVENT CONSOLIDATION BEFORE IT
HAPPENS- THEN WE'VE SEEN
SUCCESSFUL PRE MERGER
CHALLENGES. OCCUR IN THE SAINT
LUKE'S CASE IN IDAHO. AND THE
PARTNER SOUTH SHORE CASE IN
MASSACHUSETTS AS WELL AS THE
SANFORD HEALTH CASE. AND IN
NORTHERN IN NORTH DAKOTA. NEXT
SLIDE PLEASE. SO NEXT IS. THE
CONDITIONAL APPROVAL AND
OVERSIGHT AND WE BOTH HEARD-
MADAM DIRECTOR ONCE NOW THEY
AND THE STORAGE TALK ABOUT
CONDITIONS PLACED ON MERGERS TO
GO THROUGH THE REALITY IS THAT
THE AG'S OFFICE AND DAMAGE THE
ARE NOT GOING TO BE ABLE TO
PREVENT EVERY CONSOLIDATING
TRANSACTION IN THE HEALTH PLAN
SPACE OR- IN THE HEALTH CARE
PROVIDER SPACE FROM COMING TO
FRUITION AND SO THEY NEED TO BE
ABLE TO. AB IMPOSE CONDITIONS
ON THOSE MERGERS AND THOSE CAN
BE VERY HELPFUL I WE'VE SEEN
THESE BE IS VERY EFFECTIVELY IN
THE BETH ISRAEL LAHEY CASE AND
MASSACHUSETTS- AND IN OTHER
STATES AS WELL AS THE C. H. I.
DIGNITY CASE HERE IN CALIFORNIA
SO NEXT SLIDE. SO EARLIER THIS
YEAR- I WROTE A PAPER WITH BOB
BERENSON CATHERINE GOT X. N.
AND ROSALYN MURRAY AND IS A
PART OF THAT PAPER WE LOOKED AT
CONSENT DECREES AND THE KINDS
OF CONDITIONS THAT WERE IMPOSED
AND PUT THEM INTO A TYPOLOGY.
AND WHAT WE DID WAS THESE- WE
CAME UP WITH FIVE THINGS THAT
ARE COMMONLY USED BY STATES AS
CONDITIONS. AND THESE CAN BE
PUT IN PLACE- AS A PART OF
ALLOWING THE MERGER TO GO
FORWARD SO THE FIRST IS.
INSURED NEGOTIATION
REQUIREMENTS REQUIRING THAT
ENTITIES THE MERGING ENTITIES
ENGAGED IN ARBITRATION. SECOND
WE SAW THINGS LIKE LIMITATIONS
ON CONTRACT TERMS HERE FOR A
STATE AT THE STATE COULD IMPOSE
LIMITS ON PRICE INCREASES. ON
MARGINS FOR CERTAIN TYPES OF
HEALTH CARE PROVIDERS OR ON
PRICES OVERALL THEY CAN JUST
SIMPLY CAP PRICES. THIRD WE
THOUGHT PROHIBITIONS AND
REQUIREMENTS FOR CERTAIN
CONTRACT PROVISIONS. ON THINGS
LIKE BANNING THE USE OF MOST
FAVORED NATION CLAUSES GAG
CLAUSES AND ANTI STEERING
PROVISIONS THAT CAN BE DONE AS
PART OF A CONSENT DECREE- I'LL
TALK ABOUT THOSE MORE IN IN
TERMS OF WHAT THAT. LEGISLATION
AS WELL IN A MINUTE. FOURTH
THEY CAN BE USED TO PROHIBIT OR
REQUIRE CERTAIN TYPES OF
CONDUCT THINGS LIKE REQUIRING
RELEASE OF PHYSICIANS FROM NON
COMPETE CLAUSES AS A PART OF
THE MERGER. AND THEN FIFTH THEY
CAN BE USED TO ENSURE ACCESS TO
CERTAIN POPULATIONS- AND
ENSURING CONTINUED ACCESS TO
CARE FOR WOMEN'S HEALTH
SERVICES AND FOR LOW INCOME
POPULATIONS. NEXT SLIDE PLEASE.
AND FINALLY LITIGATION CAN BE
USED- TO CHALLENGE ANTI
COMPETITIVE BEHAVIOR. WHAT'S
REALLY IMPORTANT IS THAT IT'S
IMPORTANT FOR STATES TO PREVENT
ANY FURTHER. CONSOLIDATION OF
THE MARKET AS MUCH AS THEY CAN
BUT IT'S ALSO IMPORTANT TO
RECOGNIZE THAT OUR MARKETS ARE
HIGHLY CONSOLIDATED ALREADY AND
SO WE NEED TO MAKE SURE THAT
WE'RE MONITORING AND CAN
EFFECTIVELY. MANAGE THE
BEHAVIOR OF THESE ENTITIES THAT
ALREADY HAVE A LOT OF MARKET
POWER AND WE SAW THE AG'S
OFFICE DO THIS VERY
SUCCESSFULLY IN THE SUTTER
HEALTH CASE- THAT WAS THAT WAS
TRIED LAST YEAR. AND THEN ALSO
THE NORTH CAROLINA AG DID THAT
VERY SUCCESSFULLY IN THE ATRIUM
CASE BOTH OF THOSE CASES CAME
DOWN AND SETTLEMENTS BUT THEY
WERE QUITE. A STRONG
SETTLEMENTS FROM THE POSITION
OF THE AG SO. NEXT SLIDE- SO
THESE THE TERMS OF THE
SETTLEMENTS AS CAN LOOK AT A
LOT OF DIFFERENT WAYS SO. THE
FIRST IS THAT THEY CAN PROHIBIT
ALL OR NOTHING CONTRACTING. AND
THEN REQUIRE ISOLATED
CONTRACTING TO REQUIRE HEALTH
SYSTEMS. TO BREAK UP HOW
INSURERS CONTRACT WITH THEM SO
THEY CAN'T DO THAT LEVERAGING
THAT- CHAIRMAN WOULD AND I WERE
TALKING ABOUT EARLIER. WHERE
THEY LEVERAGE A MUST HAVE
PROVIDER TO DRIVE UP PRICES
WITH OTHER PROVIDERS IN THE
SYSTEM- THE NEXT TERM OF THE
SETTLEMENT. IS AB PROHIBIT ANY
COMPETITIVE CONTRACT TERMS-
THINGS LIKE ANY TEARING ANY
STEERING CLAUSES WHICH WE SAW
THE STTLEMENT. IN THE SUTTER
HEALTH CASE IN THE ATRIUM
HEALTH CASE PROHIBIT. THIRD
THEY CAN REQUIRE DIVESTITURE OF
ASSETS OR AN ABANDONMENT OF THE
MERGER ALTOGETHER AS WE SAW IN
SAINT LUKE'S AND CHI
FRANCISCAN. AND THEN FINALLY
THEY CAN PROVIDE MONETARY
RELIEF- AND THEY SAID THE
CENTER SETTLEMENT HERE- CAME IN
AT FIVE HUNDRED SEVENTY FIVE
MILLION DOLLARS WHICH I KNOW
HAS BEEN FINALIZED YET BUT
THAT'S THE PROPOSED SETTLEMENT
NUMBER- SO THESE SETTLEMENTS
CAN DO. A LOT FOR DRIVING
BEHAVIOR AND INFORMING. THE
MARKETS M. AND MARKET
PARTICIPANTS ON WHAT BEHAVIOR
IS APPROPRIATE NEXT SLIDE. BUT
I THINK IT'S IMPORTANT TO
RECOGNIZE THAT LITIGATION ONLY
GOES SO FAR IT IS VERY ARDUOUS
AS IN A STORAGE POINTED OUT AND
IT IS VERY UNCERTAIN YOU'RE NOT
ALWAYS GOING TO. TO WIN THE
CASE IS THAT YOU BRING AND SO
LITIGATION IS A LITTLE BIT LIKE
TENDING TO ONE PLANT IN YOUR
GARDEN- THAT'S MAYBE. NOT DOING
SO WELL- BUT YOU NEED RULES OF
THE ROAD AND AN OVER ARCHING
PLAN TO ADDRESS THE ENTIRE
MARKET- THE ENTIRE FARM. SO
LET'S TALK A LITTLE BIT ABOUT
WHAT CAN BE DONE THROUGH
LEGISLATION- TO. ADDRESS MARKET
CONSOLIDATION AND AN CONTROL
PRICES NEXT SLIDE PLEASE. SO
OVER THE LAST- SEVERAL YEARS
I'VE BEEN LOOKING AT STATE
LEGISLATION TO DO JUST THAT TO
CONTROL MARKET CONSOLIDATION
AND PRICES AND STATES HAVE
REALLY BUNDLED AS THEY THEY
SORT OF ATTACKED THIS PROBLEM
IN THREE WAYS SO THE FIRST IS
BY NEXT LINE THE FIRST IS BY
ADDRESSING SPECIFIC MARKET
IMPERFECTIONS. THINGS LIKE MOST
FAVORED NATION PROHIBITIONS
SURPRISE BILLING LAWS ANTI
STEERING AB PROHIBITIONS AND
ALL OR NOTHING SO LET'S TALK A
LITTLE BIT ABOUT THESE CONTRACT
TERMS. WHAT YOU CAN SEE HERE ON
THE NEXT SLIDE IS THAT NINETEEN
STATES. I HAVE PROHIBITED THE
USE OF MOST FAVORED NATIONS
PROVISIONS MOST FAVORED NATIONS
PROVISIONS REQUIRE- A PROVIDER
TO GUARANTEED TO ENSURE THAT
THEY WILL NOT GIVE A BETTER
PRICE OR A BETTER RATE. TO ANY
OF THE INSURERS COMPETITORS TO
ANY OTHER INSURER AND IF THEY
DO THEY HAVE TO THEN PROVIDE
THE ENSURE THEY GAVE THE MOST
FAVORED NATION PROVISION TO A
LOWER PRICE AS WELL. WHAT'S
IMPORTANT ABOUT THIS IS IT
ALLOWS PRICES TO DRIFT UP
ESPECIALLY IN MARKETS WHERE
THERE IS A DOMINANT INSURER
ORGANIZATION AND A DOMINANT
PROVIDER ORGANIZATION. OF WHAT
CAN HAPPEN IN THAT CASE IS THE
DOMINANT INSURER CAN AGREE TO A
VERY HIGH RATE ASKED FOR BY THE
DOMINANT PROVIDER ORGANIZATION
PERHAPS BECAUSE THEY HAVE MOST
MUST HAVE. I MUST HAVE
PROVIDERS IN THEIR SYSTEM. THEY
CAN ASK FOR A VERY HIGH RATE
AND THE INSURER CAN GRANTED AS
LONG AS THE PROVIDER
ORGANIZATION GIVES THEM A MOST
FAVORED NATION CLAUSE. AND THIS
OCCURS SO THEY SAY WILL PAY THE
HIGHEST RATE AS LONG AS YOU
DON'T GIVE ANY OF OUR
COMPETITORS A BETTER RATE. AND
WHAT HAPPENS THERE IS THAT THIS
ALLOWS THE PRICE OF HEALTH CARE
TO RISE UP AND THE INSURANCE
COMPANY CAN PASS THOSE COSTS IN
THE FORM OF HIGHER PREMIUMS.
ALONG TO EMPLOYERS AND
INDIVIDUALS. SO THIS IS AN AREA
WHERE NINETEEN STATES HAVE PRO
HAD PROHIBITED THIS AND THE
STATE OF NEW YORK. REQUIRES ANY
CONTRACT WITH LANGUAGE THAT
LOOKS LIKE A MOST FAVORED
NATION CLAUSE I TO BE REVIEWED
BY THE INSURANCE COMMISSIONER.
NEXT SLIDE PLEASE. NOW LET'S
TALK A LITTLE BIT ABOUT THE
RESTRICTION OF ANTI TEARING AN
ANTI STEERING PROVISIONS THESE
ARE PROVISIONS THAT ARE OFTEN
ASKED FOR BY DOMINANT
PROVIDERS- THAT. PREVENTED THE
INSURER FROM SIGNALING THAT
THESE PROVIDERS ARE CHARGED
HIGHER PRICES OR MIGHT BE OF
LOWER VALUE THAN OTHER
PROVIDERS ALSO IN THE NETWORK
AND SO WHAT THIS DOES IS IT
REALLY SHIELDS. BOTH THE
INSURERS ABILITY TO STEER
PATIENTS TO HIGHER VALUE
PROVIDERS BUT IT ALSO PREVENTS
THE IN. THE AB PATIENT FROM
REALLY KNOWING. THAT THE
PROVIDERS THEY MIGHT BE
PICKING- ARE HIGHER PRICED.
OVERALL AND SO THEY CONTINUE TO
GO TO THOSE PROVIDERS WHEN THEY
MIGHT NOT OTHERWISE THEY PAY
THE SAME COPAY- AS THEY WOULD
TO GO TO A HIGHER VALUE
PROVIDER. AND SO WHAT WE CAN
SEE HERE IS THAT CALIFORNIA AND
NORTH CAROLINA HAD THOSE TWO
CASES THAT CHALLENGED THE USE
OF THESE. A LAWS AND PROHIBITED
THEM AS PART OF THE SETTLEMENT.
FOR THOSE THOSE PROVISIONS
MASSACHUSETTS HAS BANNED THE
USE OF ANY TEARING IN ANY
STEERING CAUSES IN PROVIDER
ENSURE CONTRACTS AND BOTH NEW
YORK AND NEW JERSEY HAVE BILLS
CONSIDERING THAT THIS TERM
NEITHER OF THEM PASSED I THINK
LARGELY DUE TO CODE BUT THEY'RE
SUPPOSED TO COME BACK. NEXT
YEAR. SO NOW LET'S MOVE ON TO
THE RESTRICTION OF ALL OR
NOTHING PRO PROVISIONS. IN
CONTRACTS ALL OR NOTHING I
DESCRIBED EARLIER WHERE YOU
HAVE A MUST HAVE. OF PROVIDER
POTENTIALLY IN ONE IN ONE AREA
AND THE INSURANCE COMPANY NEEDS
TO HAVE THAT PROVIDER IN THE
SYSTEM. AND THE- HEALTH SYSTEMS
IN THE NETWORK AND THE HEALTH
SYSTEM IS REQUIRING THAT THAT
INSURER IN ORDER TO GET THE
MUST HAVE ENTITIES. HAS TO
CONTRACT WITH ALL OF THE
PROVIDERS IN THE SYSTEM. AND
PAY THE RATES DEMANDED BY THE
DOMINANT PROVIDER AND SO. THIS
PRACTICE WAS CHALLENGED IN THE
SUTTER CASE HERE IN CALIFORNIA
IT WAS PROHIBITED AS PART OF
THE PROPOSED SETTLEMENT.
MASSACHUSETTS HAS LAWS
RESTRICTING THE USE OF THIS
PRACTICE AND NEW YORK IN
COLORADO ALSO HAD BILLS TRYING
TO ADDRESS THE USE OF ALL OR
NOTHING CLAUSES. AND IN THEIR-
IN THEIR LEGISLATURES THIS YEAR
TO THOSE DID NOT PASS- AS WELL
THERE ARE SOME. POTENTIAL
BENEFITS AND POTENTIAL
EFFICIENCIES THAT WOULD COME
OUT OF ALL OR NOTHING
CONTRACTING AND SO I THINK THIS
IS IN A SITUATION WHERE YOU
REALLY NEED TO HAVE A GOOD
OVERSIGHT. OVER THE USE OF THIS
PRACTICE TO DETERMINE HOW IT'S
BEING USED. NEXT SLIDE PLEASE.
SO THOSE ARE JUST AN EXAMPLE OF
THE KINDS OF LAWS THAT THE
STATE COULD PASS TO ADDRESS
SPECIFIC MARKET IMPERFECTIONS.
BUT OTHER STATES AND EVEN SOME
OF THE SAME STATES ARE LOOKING
TO ADDRESS MARKET FUNCTION
OVERALL AND SO THEY'VE DONE
THIS. THROUGH ENHANCING THEIR
PRICE TRANSPARENCY LAWS
EXPANDING THEIR ALL PAYER
CLAIMS DATABASES ARE STARTING
AN ALL PAYER CLAIMS DATABASE.
AND THEY'VE ALSO DONE THAT BY
ENHANCING THEIR MERGER REVIEW
PRACTICES NEXT SLIDE PLEASE. SO
OVER THE LAST ABOUT A YEAR AND
A HALF MY COLLEAGUES AT UC
HASTINGS AND AT THE SOURCE ON
HEALTHCARE PRICING COMPETITION
AS WELL AS THE PETROUS CENTER
AT UC BERKELEY. HAVE BEEN
EXAMINING THE LAWS AND
REGULATIONS IN ALL FIFTY
STATES- PLUS THE DISTRICT OF
COLUMBIA WITH RESPECT TO MERGER
REVIEW AND OVERSIGHT. AND WE'VE
CATEGORIZED THOSE LAWS INTO
FIVE DIFFERENT AREAS AS WELL AS
THE PRACTICES FOLLOWING A
MERGER BOTH IN TERMS OF
OVERSTATING CONSENT AGREES WE
LOOKED AT THAT AS WELL. WE PUT
THEM INTO FIVE CATEGORIES
NOTICE REVIEW CRITERIA APPROVAL
CONSENT DECREES AND CONDITIONAL
APPROVAL AND POST TRANSACTION
OVERSIGHT. AND THEN WE TOOK THE
STATE'S AND WE PUT WE GROUP
THEM INTO SIX CATEGORIES. IN
ACCORDANCE WITH SORT OF THEIR
OVER ARCHING LEVEL OF MERGER
REVIEW. AND WHAT YOU CAN SEE
HERE ON THE NEXT SLIDE. IS THAT
THERE'S QUITE A RANGE AROUND
THE UNITED STATES. WITH RESPECT
TO THE LEVEL OF MERGER REVIEW
IF ALREADY CAPTURED BY ANY
STATE- SO YOU CAN SEE THAT IT'S
EVERYTHING FROM THEY HAVE. NO
NOTICE REQUIREMENT NO APPROVAL
NOTHING FOR- HOSPITALS IN ANY
KIND OF WAY ALL THE WAY UP TO
STATES IN THE DARKEST BLUE OF
WHICH CALIFORNIA SHOULD BE ONE-
AT THAT SIX LEVEL. APPROVAL OF
EITHER NONPROFIT HOSPITALS
WHICH CALIFORNIA HAS OR ALL
HOSPITALS BASED ON REVIEW
CRITERIA RELATED TO PRICING
COMPETITION WE FELT LIKE THAT
WAS THE HIGHEST LEVEL OF
OVERSIGHT AUTHORITY ESTATE
COULD HAVE. AND THEY'RE
FOURTEEN STATES WITHOUT LEVEL
OF AUTHORITY INCLUDING
CALIFORNIA. SO AFTER DOING ALL
THIS RESEARCH WE LOOKED AND
FOUND ON THE NEXT SIDE YOU'LL
SEE THAT THERE ARE FIVE STATES
WITH THE MOST COMPREHENSIVE
TRANSACTION REVIEW POLICIES AND
PRACTICES WE FOUND THEM TO BE
CALIFORNIA CONNECTICUT
MASSACHUSETTS PENNSYLVANIA AND
RHODE ISLAND. NO IT'S IMPORTANT
ABOUT THESE IS THAT NONE OF
THESE STATES FULLY ENCAPSULATE
THE GOLD STANDARD ALL OF THEM
HAVE VERY INTERESTING AND
UNIQUEFEATURES AND VERY STRONG
MERGER REVIEW AUTHORITY BUT
NONE OF THEM SORT OF HAVE THE
FULL PACKAGE- AND SO THAT'S
WHERE THEY ALL HAVE SOME ROOM
FOR IMPROVEMENT SO TO SPEAK.
NEXT SLIDE. AND AS YOU CAN SEE
HERE. CALIFORNIA HAS MERGER
REVIEW A MERGER PRE MERGER
NOTICE REQUIREMENTS AND PRE
MERGER APPROVAL- BY THE AG AS
WELL AS REVIEW CRITERIA RELATED
TO COMPETITION AND PRICE BUT IT
ONLY HAS THAT FIRM NONPROFIT
HOSPITAL MERGERS AND AS MR AND
POINTED OUT. THERE A LOT OF
OTHER ENTITIES THAT ARE
CONSOLIDATING INCLUDING FOR
PROFIT HOSPITALS FOR PROFIT
ENTITIES LIKE. PRIVATE EQUITY
FIRMS BUYING UP- FREESTANDING
EMERGENCY CLINICS AND OTHER YOU
KNOW OTHER AND SHE'S IN THE
MARKET SO THERE'S A LOT OF
CONSOLIDATION THAT'S HAPPENING
IN HEALTH CARE THAT IS NOT JUST
IN THE REALM OF NONPROFIT
HOSPITAL MERGERS. NEXT SLIDE
PLEASE- ARE TWO OTHERS SPEAKERS
ON THE PANEL SORT OF COVERED
THE SLIDE. SO CALIFORNIA THE
AG'S OFFICE- WE HEAR WE DON'T
HAVE A REVIEW OF COMPETITION
BECAUSE THAT'S IN THE STATUTE
BUT THEY DO HAVE IT IN THE
REGULATION THOUSAND STORAGE
POINTED OUT. SO ON NEXT SLIDE
WHAT YOU CAN SEE IS A
COMPARISON OF THE NOTICE
REQUIREMENTS ACROSS THESE FIVE
STATES. SO MASSACHUSETTS AND
CONNECTICUT HAD THE HIGHEST
NOTED STANDARDS AND THEY
REQUIRE NOTICE BY- ALL VAIDER
ENTITIES THAT ARE ENGAGING AND
EMERGING TRANSACTION SO THAT
WOULD BE ALL HOSPITALS BOTH FOR
PROFIT AND NONPROFIT ALL
PROVIDER GROUP PRACTICES ANY
PROVIDER ORGANIZATION- AND THAT
NOTICE HAS TO GO NOT ONLY TO
THE ATTORNEY GENERAL- BUT ALSO
TO EITHER THE HEALTH POICY
COMMISSION IN MASSACHUSETTS. OR
TO- THE CEO AND THE CERTIFICATE
OF NEED DEPARTMENT IN
CONNECTICUT AND SO THERE'S ALSO
DUAL AGENCIES RECEIVING THIS
NOTICE AND BEING ABLE TO
EXAMINE IT FROM THEIR
PARTICULAR LEVEL OF EXPERTISE
NEXT SLIDE PLEASE. IN TERMS OF
THE TYPES OF TRANSACTIONS THAT
ARE REQUIRING NOTICE. WHAT YOU
CAN SEE HERE IS AGAIN A
MASSACHUSETTS AND CONNECTICUT
ARE SORT OF TOPPING THE LIST
WITH REQUIRING NOTIFICATION OF
ANY MATERIAL CHANGED TO
OPERATIONS OR GOVERNANCE OF A-
OF A PROVIDER OR PROVIDER
ORGANIZATIONS SO THAT VERY
BROAD SET OF NOTICE NOT ONLY.
BROAD IN WHAT ENTITIES CAN
TRIGGER NOTICE BUT ALSO THE
TYPES OF TRANSACTIONS THAT CAN
TRIGGER NOTICE IT'S NOT JUST
MERGERS AND ACQUISITIONS IT'S
ALL TYPES OF TRANSACTIONS THAT
CAN BE CONSOLIDATING. AND WHAT
YOU CAN SEE AGAIN IS THAT
CALIFORNIA- YOU KNOW HAS THIS
TYPE OF NOTICE REQUIREMENT BUT
IT'S ONLY FOR NONPROFIT
HOSPITALS. OKAY NEXT SLIDE
PLEASE. IN TERMS OF APPROVAL OF
RHODE ISLAND AND CONNECTICUT
HAVE THE MOST COMPREHENSIVE
STANDARDS HERE RHODE ISLAND
REQUIRES PRE TRANSACTION
APPROVAL FOR ALL HOSPITALS A
CONNECTICUT REQUIRES PRE
TRANSACTION APPROVAL BY ITS
HEALTH SYSTEMPLANNING UNIT
WHICH IS THEIR CERTIFICATE OF
NEED AGENCY- AND THAT'S FOR ALL
HOSPITALS. TRANSACTION AND ALL
PHYSICIAN GROUPS- AND AGAIN
CALIFORNIA REALLY LOOKS AT THAT
WITH RESPECT TO. IT'S NONPROFIT
ACQUIRE HE'S ONLY I ALSO WANT
TO DRAW YOUR ATTENTION TO THE
MASSACHUSETTS COLUMN BECAUSE
WHAT YOU'LL SEE HERE IS THAT
MASSACHUSETTS DOESN'T HAVE AN
APPROVAL REQUIREMENT IN THE
SAME WAY THAT RHODE ISLAND
CONNECTICUT DO. BUT THEY
REQUIRE THAT THAT NOTICE GO TO
THE HEALTH POLICY COMMISSION
AND THE HEALTH POLICY
COMMISSION IF THE IF THE MERGER
IS. LARGE ENOUGH AND HAS THE
POTENTIAL IMPACT THAT'S GREAT
ENOUGH IT WILL TRIGGER AT A
COST AND MARKET IMPACT REVIEW
BY THE H. P. C. AND THEN THAT
WILL. THAT CAN IT SERVE TO
INFORM WHETHER OR NOT THE AG'S
OFFICE DECIDES TO MAKE- TO
BRING A CHALLENGE TO THAT
PARTICULAR MURDER SO THERE WILL
BE. SIGNIFICANT INVESTIGATION
AND DATA THAT WILL BE PRODUCED
ABOUT THAT MERGER THEN THE
ATTORNEY GENERAL CAN DECIDE
WHETHER TO BRING A CASE OKAY.
NEXT SLIDE PLEASE. SO AFTER
LOOKING AT ALL FIFTY STATES
PLUS DC AND THEN LOOKING IN
DEPTH AT THESE FIVE STATES WE
CAME UP WITH WHAT WE FELT LIKE
WAS THE GOLD STANDARD. UP FOR
PRE MERGER. R. FOR JUST MERGER
AUTHORITY AND MERGER OVERSIGHT.
AND AGAIN WHAT WE FOUND WAS
THAT. WE THOUGHT THAT THERE
SHOULD BE A BROAD SET OF NOTICE
BOTH BROAD IN TERMS OF THE
SCOPE OF ENTITIES THAT WOULD
TRIGGER NOTICE BUT ALSO IN THE
SCOPE OF TRANSITIONS.
TRANSACTIONS THAT WOULD TRIGGER
THAT SO NOT JUST MERGERS AND
ACQUISITIONS BUT AGAIN ANY
MATERIAL CHANGE IN OWNERSHIP OR
CONTROL. WE ALSO THOUGHT THAT
MULTIPLE STATE ENTITIES SHOULD
RECEIVE THIS NOTICE SO THAT I
COULD SHARE THE BURDEN IN TERMS
OF USING THE EXPERTISE REQUIRED
BY OTHER AGENCIES TO HELP
INFORM THE MERGER DECISION- WE
DID THINK THAT APPROVAL SHOULD
BE HOUSED IN ONE AGENCY ALONE
BUT JUST INFORMED BY OTHER
AGENCIES. AND WE THOUGHT THERE
SHOULD BE A SUFFICIENT WAITING
PERIOD FOR THE STATE TO REVIEW
THE INFORMATION PROVIDED AND
GATHER MORE INFORMATION. SO
THAT IT WASN'T A VERY RUSHED
PROCESS. IN TERMS OF REVIEW WE
FELT THAT THERE SHOULD BE
SUBSTANTIAL REVIEW CRITERIA-
THAT WAS CODIFIED. SO THAT IT
THE ENTITY TO CONDUCTING THE
REVIEW WOULD REVIEW THE
TRANSACTION TERMS OF ITS IMPACT
ON COMPETITION AND THE MARKETS.
AFFORDABILITY AND PRICES ACCESS
TO CARE QUALITY OF CARE- AND
THE PUBLIC INTEREST AS WELL AS
IF IT'S A NONPROFIT HOSPITAL OF
WHETHER OR NOT THE BOARD. HAD
MET ITS FIDUCIARY DUTY IN TERMS
OF. REVIEWING REVIEWING THE
CRITERIA AND THE TRANSACTION.
NOW WE REALIZE THAT THIS IS A
BIG UNDERTAKING AND IT WOULD BE
A LOT FOR THE AG'S OFFICE TO
HAVE TO DO ALL OF THIS- OR FOR
ANOTHER STATE AGENCY TO HAVE TO
DO ALL OF THIS AND WE THINK
THAT THERE COULD BE A TIERED
LEVEL OF REVIEWS SO DEPENDING
ON THE LEVEL OF ANY TRUST RISK
OR THE SIZE OF THE TRANSACTION.
IT WOULD BE POSSIBLE. TO HAVE
LOWER LEVELS OF REVIEW. AND
INTRODUCE TACIT APPROVAL IF THE
AG'S OFFICE DOES NOT. REJECT OR
CHALLENGER MARC- YOU KNOW
APPROVE WITH CONDITIONS
INTRODUCED CONDITIONS. ON YOUR
MERGER WITHIN A CERTAIN AMOUNT
OF TIME THAN THE MERGER IS
PRESUMED TO PROVE THINGS LIKE
THAT WHERE YOU CAN KIND OF
SCALE IT ACCORDING TO THE LEVEL
OF ANTITRUST RISK. WE ALSO FELT
THAT INDEPENDENT CONSULTANTS
SHOULD BE PAID FOR- COULD BE
USED IN THIS AND PAID FOR BY
THE MERGING ENTITIES TO HELP
DEFRAY SOME OF THE COSTS FOR
THE STATE- WE ALSO FELT THAT IT
WAS VERY IMPORTANT. TO HAVE
SUBPOENA FOR THE STATE ENTITIES
TO HAVE SUBPOENA POWER TO GET
ACCESS TO WHATEVER INFORMATION
THEY NEEDED TO HELP MAKE THEIR
DECISION. WE FELT THAT THE GOLD
STANDARD WOULD ALSO BE. TO HAVE
PRE TRANSACTION APPROVAL
AUTHORITY GRANTED TO THE
ATTORNEY GENERAL. OR ANOTHER
STATE AGENCY- AND AGAIN THIS
APPROVAL AUTHORITY COULD BE
TACIT FOR LOWER RISK- BUT MUCH
MORE ACTUAL FOR- FOR HIGHER
RISK TRANSACTIONS. AND FINALLY
WE FEEL THAT THERE SHOULD BE IS
A STRONG AMOUNT OF POST
TRANSACTION MONITORING NOT JUST
FOR THE CONDITIONS THAT ARE ALL
A PART OF THE MERGER BUT ALSO
RETROSPECTIVELY TO MAKE SURE
THAT. A INDIVIDUALS HAD- THAT.
THE MURDERS THAT HAD GONE
THROUGH WERE NOT RAISING PRICES
AND THOSE ENTITIES WERE NOT
EXERCISING THEIR ABUSING THEIR
MARKET POWER. NEXT SLIDE.
FINALLY THIS BRINGS ME TO
MARKET OVERSIGHT AND AGAIN IT I
WANT TO RAISE THE POINT THAT
EVERYTHING I JUST TALKED ABOUT
WAS SORT OF TO PREVENT FURTHER
CONSOLIDATION BUT WE ALSO NEED
TO THINK ABOUT IS THE FACT THAT
OUR MARKETS ARE ALREADY HEAVILY
CONSOLIDATED AND WE NEED TO
THINK ABOUT HOW TO ADDRESS THAT
CONSOLIDATION AND PREVENTED-
FROM CONTINUING TO RAISE COSTS
AND- CHALLENGE OUR- OUR
ECONOMY. SO AND MAKING IT HARD
FOR CITIZENS TO GET HEALTH CARE
SO IN TERMS OF THAT THERE CAN
BE BETTER MARKET OVERSIGHT SO
NEXT SLIDE PLEASE. WHAT YOU CAN
SEE IS. THERE'S REGULATORY
THERE'S OPTIONS FOR REGULATORY
OVERSIGHT AND RESTRICTIONS THE
KIND OF OVERSIGHT THAT WE'VE
SEEN IN OTHER STATES INCLUDE
MONITORING MARKET TRENDS ACT
MARKET CONSOLIDATION TRENDS IN
ALL HEALTHCARE SECTORS-
REQUIRING COST AND MARKET
IMPACT REPORTS. OFFERING THE
ATTORNEY GENERAL AND- EITHER
THE ATTORNEY GENERAL OR THE
DEPARTMENT OF INSURANCE OR IN
OUR CASE DAMAGE SEE THE ABILITY
TO REVIEW AND FOR AN PROVIDER
RATE AND A COMPREHENSIVE RATE
REVIEW WAY. ALSO GIVING THE-
DMH C. OR THE DAMAGE HE MAY
MISS CASE MOST LIKELY- THE
ABILITY TO REVIEW ENSURE
PROVIDER CONTRACTS FOR ANY
COMPETITIVE CONTRACT TERMS. AND
THE IMPLEMENTATION OF
AFFORDABILITY STANDARDS SO
OFFERING A STATE AGENCY THE-
BOTH THE RESPONSIBILITY AND THE
OPPORTUNITY TO ENSURE THE
AFFORDABILITY OF HEALTH
INSURANCE IN THE STATE AND NOT
GIVE THEM WE'VE SEEN IN RHODE
ISLAND THAT GAVE THE OFFICE OF
THE HEALTH INSURANCE
COMMISSIONER A LOT OF
AUTHORITY. TO TRY AND REIN IN
PRICES. WE'VE ALSO SEEN
EFFECTIVE RESTRICTIONS BE USED
THROUGH THIS TYPE OF OVERSIGHT
SO. AND I APOLOGIZE THERE'S A
COUPLE OF WORDS THAT I WOULD
CHANGE ON THE SLIDE- SO IN
TERMS OF RHODE ISLAND IN
COLORADO IN TERMS OF
RESTRICTIONS THEY HAD PROVIDER
AND INSURER RATE REVIEW IF COST
GROWTH AND- IF COST GROWTH
EXCEEDS THE THRESHOLD. THE COST
GROWTH BECAUSE OF A CERTAIN
AMOUNT IN TERMS OF PREMIUMS OR
IN TERMS OF THE RATES BEING
PAID THEN THE INSURANCE
COMMISSIONER IN RHODE ISLAND
CAN COME IN. AND REJECTED THE
RATE INCREASE BOTH AT THE
INSURANCE PREMIUM LEVEL BUT
THEY CAN ALSO REJECT THE
CONTRACT BASED ON THE RATES
PAID TO THE PROVIDERS SO THAT'S
A GOOD LARGE- IT'S A LARGE
INCREASE IN AUTHORITY. FOR
THOSE ENTITIES AND IT ALLOWS
THEM TO CONTROL COSTS WE'VE
ALSO SEEN HEALTHCARE COST
GROWTH BENCHMARKS. IN
MASSACHUSETTS AND DELAWARE. AND
I THINK THAT CAN BE VERY
EFFECTIVE AT TRYING TO
CONSTRAIN OVER ALL THE TOTAL
HELD ECONOMIC. THE HEALTH X.
COST EXPENDITURES AND THAT CAN
BE A VERY EFFECTIVE TOOL WE'VE
ALSO SEEN RATE CAPS. IN THE
STATE EMPLOYEE HEALTH BENEFIT
PROGRAMS IN MONTANA AND OREGON.
THOSE HAVE. JUST SET A PRICE
THAT. AND GETTING HEALTH CARE-
AND THAT HAS BEEN ALSO TRIED IN
A NUMBER OF PUBLIC OUT STATE
PUBLIC OPTION BILLS THAT HAVE
BEEN GOING FORWARD AND SO JUST
ESTABLISHING RATE CAPS ON AS A
FUNDAMENTAL A PERCENTAGE OF
MEDICARE PRICES NEXT SLIDE SO I
JUST WANT TO AND WITH SOME
PARTICULAR OPTIONS FOR
CALIFORNIA THAT I THINK WOULD
BE EFFECTIVE- ENHANCING
CONSOLIDATION REVIEW OVERALL.
REQUIRING NOTICED AN APPROVAL
FOR ANY MATERIAL CHANGE
INVOLVING A HOSPITAL PHYSICIAN
GROUP OR PROVIDER ORGANIZATION.
REVIEWING ALL HEALTH CARE
TRANSACTIONS FOR IMPACT TO
PRICE COMPETITION IN THE PUBLIC
INTEREST. AND THEN THE CREATING
OR DESIGNATING OF AN AGENCY TO
REVIEW OUR MONITOR
CONSOLIDATION ACTIVITY AND
MARKET FUNCTION. WITH RESPECT
TO ANY COMPETITIVE CONTRACTING
PRACTICES- THE STATE COULD
CONSIDER PROHIBITING MOST ANY
TEARING AN ANTI STEERING
PROVISIONS AS WELL AS MOST
FAVORED NATION PERFECT.
PROVISIONS AND IT COULD ALSO
CREATE OR DESIGNATED AGENCY TO
REVIEW HEALTH INSURER PROVIDER
CONTRACTS FOR ANY COMPETITIVE
LANGUAGE. AND FINALLY THE STATE
COULD ENHANCE ITS REGULATORY
OVERSIGHT SO BY OFFERING
PROVIDER AND INSURER RATE
REVIEW WITH RATE APPROVAL FOR
GROWTH OVER A CERTAIN THRESHOLD
AND CONSIDER- IMPLEMENTING
AFFORDABILITY STANDARDS AND
WITH THAT I'LL STOP. OF AND
TAKE YOUR QUESTIONS THANK YOU
VERY MUCH YOU CAN ADVANCE ASIDE.
GREAT WELL THANK YOU VERY MUCH
I RETURNED TO MY COLLEAGUES-
ASSEMBLY MEMBER BURKE. MY
QUESTIONS THAT YOU MAY HAVE
ANSWERED SOME OF THEM I HAD
TROUBLE FINDING MY FLIGHT SO I
MIGHT HAVE MISSED SOME OF IT SO
EXCUSE ME IF YOU ANSWER SOME OF
THESE- SOME OF THE FIVE STATES
WITH THE MOST COMPREHENSIVE.
POLICIES I UNDERSTAND THAT NONE
OF THEM ARE THE GOLD STANDARD.
AT WHICH ONES ARE HAVING THE
MOST SUCCESS AND HOW ARE YOU
DEFINING THAT SUCCESS AND THEN
MY SECOND QUESTION IS- HOW DOES
THIS ALL. I AM VERY SENSITIVE
TO THIS TOPIC BECAUSE MY MOM.
TWENTY YEARS AGO REPRESENT L.
A. COUNTY AND L. A. COUNTY AND
PORTIONS OF MY DISTRICT AT THE
TIME SUFFERED FROM. A HOSPITAL
DESERT'S. WHERE WE DON'T HAVE
ACCESS TO HEALTH CARE AND WE
DID HAVE. ONE OF THESE
COMPANIES THAT YES- WE HAD A TO
FINALLY IN MY DISTRICT COME IN.
THAT DO YOU KNOW THAT ARE THAT
ARE LARGER CORPORATIONS THAT
HAVE COME IN AND- WE'RE HAPPY
TO HAVE THEM. BECAUSE WE DIDN'T
HAVE THESE HEALTH HAZARDS AND
WE STILL ARE SUFFERING I THINK
NOT YOU KNOW FROM THE APP FROM
A LOW AVERAGE ON HEALTH CARE
AVAILABILITY IN OUR DISTRICT.
AND SO. MY QUESTION IS HOW DOES
THAT AFFECT DISTRICTS LIKE
MINE. WHERE WE STRUGGLE WITH
ACCESS NOT JUST BECAUSE OF THE
PRICES THE PRICES ARE BAD
ENOUGH BUT BECAUSE NO ONE WANTS
TO COME. OR THAT WE FIND IT
DIFFICULT TO FIND THOSE THAT
WILL COME TO OUR DISTRICTS AND.
BUT THANK YOU THOSE ARE GREAT
QUESTIONS SO IN TERMS OF THE
STATES THAT ARE HAVING THE MOST
SUCCESS- I WOULD I WOULD PICK
OUT MASSACHUSETTS CONNECTICUT
AND RHODE ISLAND IN SOME WAYS
FOR DIFFERENT REASONS
MASSACHUSETTS- WITH ITS HEALTH
POLICY COMMISSION REALLY HAS-
THE BEST OVERSIGHT OVER WHAT'S
HAPPENING IN ITS MARKETS. AND
THEY'VE BEEN ABLE TO IMPLEMENT
THEIR- THEIR HEALTHCARE COST
GROWTH. THRESHOLDS AND I THINK
THAT'S BEEN- THAT'S BEEN VERY
EFFECTIVE THAT HEALTH POLICY
COMMISSION HAS BEEN ABLE TO USE
ITS ACCESS TO DATA AND ITS
ANALYSIS OF DATA TO PREVENT ANY
COMPETITIVE MERGERS- IN CERTAIN
INSTANCES BUT THEN ALSO TO
ALLOW MERGERS THAT GOES WITH TO
GO THROUGH BUT WITH SIGNIFICANT
CONDITIONS THAT- ARE GOING TO.
HOPEFULLY PREVENT AT LEAST FOR
SOME AMOUNT OF TIME OF THE
KINDS OF BEHAVIORS ANY
COMPETITIVE RESULTS THAT WE'VE
SEEN IN OTHER PLACES RHODE
ISLAND HAS DONE THAT- THROUGH
ITS AFFORDABILITY STANDARDS HAS
BEEN ABLE TO KEEP TRACK OF HOW
IT'S PREMIUMS ARE GOING UP AND
REDUCE ITS OVERALL COST GROWTH.
WHICH HAS BEEN VERY SUCCESSFUL
IN PART BY HAVING USING THESE
AFFORDABILITY STANDARDS AND
ALLOWING THAT HEALTH INSURANCE
COMMISSIONER TO REALLY. GO INTO
AND REJECT THE CONTRACTS
BETWEEN INSURERS AND PROVIDERS
BASED ON THESE PREMIUM
INCREASES AS WELL AS- REJECTING
THE PROVIDER RATE AND SO THAT'S
THAT THREAT BEING OUT THERE
ALLOWS INSURANCE COMPANIES TO
PUT DOWNWARD PRESSURE. ON
PROVIDERS IN TERMS OF PRICE AND
THERE HAS BEEN AT LEAST ONE
STUDY OF THAT SYSTEM THAT HAS
SHOWN. A REDUCTION IN PRICE SO
I THINK THAT'S BEEN- VERY
EFFECTIVE. AS WELL IN TERMS OF
YOUR QUESTION ABOUT HOW ALL OF
THIS WITH HELP OF. THE COUNTIES
IN WHICH YOU THE COUNTY IN
WHICH YOU GREW UP AND WHERE
THERE'S AYE HEALTHCARE DESERT
WHAT WE WANT IS FOR THERE TO
BE- THE ABILITY FOR NEW
ENTRANTS TO COME INTO THE
MARKET AND FOR THERE TO BE
LOWER AM. IT WOULD BE MUCH
EASIER FOR THOSE AND ENTITIES
TO COMMITTING FOR COMPETITION
TO COME IN AND A LOT OF TIMES
WHAT HAPPENS IT'S VERY
DIFFICULT. FOR NEW PROVIDERS TO
COME IN. BECAUSE THE DOMINANT
PROVIDERS IN A PARTICULAR AREA
OR IF THERE ARE- JUST REALLY
LIMITED NUMBERS OF PROVIDERS
THEY ARE CAN BE VERY EFFECTIVE.
AT PREVENTING INSURERS FROM
BEING ABLE TO. PAY THEM HIGHER
REIMBURSEMENT RATES AND SO
THERE'S A WHOLE SYSTEM OF KIND
OF EXCLUDING RIVALS IN THIS
SPACE- BY DOMINANT PROVIDERS
AND SO. HAVING GREATER
OVERSIGHT OVER WHAT'S HAPPENING
IN THE MARKET CAN LOWER THE
OVER ARCHING- THAT THRESHOLD
OUR BOUNDARY FOR GETTING INTO
THE MARKET FOR NEW COMPETITORS
AND SO THAT CAN ALSO HELP IN
THAT SPACE. GO AHEAD PLEASE. I
GET THAT'S WHAT YOU WANT BUT
I'M I GUESS MY QUESTION IS HOW
DO WE HOW DO YOU PAIR OF THAT
TOO BECAUSE I MEAN I LIVE IN A
DISTRICT THAT CLEARLY WE HAD A
HOT WE HAD. TO HOSPITALS CLOSE
AND SO WHAT WE WANTED IT WASN'T
ACTUALLY POSSIBLE WHAT WE FOUND
WAS THAT. WE HAD NO HEALTH CARE-
AND PEOPLE IN MY DISTRICT DON'T
HAVE CARS IT'S FOUR HOURS
SOMETIMES ON A BUS TO GET
HEALTH CARE AND THAT'S- NOT
WHAT WE WANT FOR OUR IT'S NOT
WHAT I WANT FOR MY FAMILY OR-
THOSE AROUND ME MY NEIGHBORS-
SO HOW DO WE PAIR OF THIS WHAT
WE WANT WITH WHAT. WE ACTUALLY
WHAT ACTUALLY FACILITATES NOT
JUST THE HOPE THAT IT GIVES
SPACE FOR THOSE TO COME IN WHO
DO WHO WHAT REALLY DON'T REALLY
WANT TO COME INTO OUR
DISTRICTS. REIMBURSEMENT RATES
ARE LOW WE ARE NOT THE IDEAL
SITUATION FOR MOST HEALTH CARE
COMPANIES.
UHHUH. DID YOU WERE
YOU ABLE TO HEAR THE QUESTION.
YES I CAN HEAR THE QUESTION
OKAY. OPEN UP CAN YOU HEAR ME
SORRY WE'RE HAVING AT. WE CAN
HEAR YOU NOW I DELAY ON THAT ON
THAT CAMERA MIGHT ANYWAY SO I
THINK IT'S A GREAT QUESTION AND
I THINK THE REALITY IS WE HAVE
MANY DIFFERENT TYPES OF HEALTH
CARE CHALLENGES AND THEY'RE NOT
GOING TO BE SOLVED WITH ONE-
WITH ONE SOLUTION. I HONESTLY
THINK THAT FOR RURAL MARKETS
WHERE WE DON'T ARE JUST FOR
AREAS WHERE WE DON'T HAVE GOOD
AND APPROPRIATE HEALTH CARE.
WHAT WE NEED TO DO IS FOLLOW
THE LEAD OR LOOK MORE CLOSELY
AT WHAT PENNSYLVANIA HAS DONE
IN THAT SPACE BY CREATING.
ESSENTIALLY TREATING TREATING
HEALTH CARE IN THOSE SPACES
LIKE A PUBLIC UTILITY AND SAY
THAT THOUGH THEY HAVE CREATED
BOTH A FLOOR AND A CEILING FOR
WHAT COULD BE PAID WHAT THE
STATE WOULD PAY. TO PROVIDE
CARE AT IN THOSE SPACES AND
THINKING ABOUT IT IN THE SAME
WAY AS A PUBLIC UTILITY THAT
PEOPLE LIVING IN THOSE AREAS
NEED ACCESS TO HEALTH CARE IN
THE SAME WAY THAT THEY NEED
ACCESS TO SCHOOLS THEY NEED
ACCESS TO BE WANTING TO HAVE
ACCESS TO THE INTERNET WE WANT
THEM TO HAVE ACCESS TO A WHOLE
LOT OF THINGS AND THEY'RE-
WANTING TAXES THE TELEPHONE
LINES. I'M SO TREATING HEALTH
CARE IN MORE RURAL AREAS IN
HEALTH CARE DESERT AS A PUBLIC
ENTITY AND MAKING SURE THAT
THEY ARE PROVIDED WITH A
CERTAIN FLOOR FOR AMOUNT OF
MONEY. THAT CAN REALLY CHANGE
THE DYNAMC IN THAT SPACE AND
ENCOURAGE ENTRANCE. ENTITIES TO
ENTER AND I THINK THAT WILL BE
VERY IMPORTANT IT'S A IT'S AN
ANTI BUT YOU HAVE TO TREAT SORT
OF THOSE TYPES OF PROBLEMS VERY
DIFFERENTLY FROM THE TYPES OF
PROBLEMS THAT WE'RE SEEING IN
OTHER REAS. THAT'S REALLY
INTERESTING THANK YOU THANK YOU
FOR AN ANSWER. MISTER NAZARIAN
QUESTIONS OKAY THANK YOU I'M HI
I HAVE A COUPLE QUESTIONS I'M
GONNA GO BACK IN TO YOUR
PREVIOUS PRESENTATION AND I'VE
I'VE NEGLECTED TO ASK THIS
QUESTION BUT I I'M I'M VERY
CURIOUS- YOU HAD A SLIGHT ABOUT
TRANSPARENCY- AND- CALIFORNIA
GETS A D. OREGON GETS A C.
WASHINGTON GETS A D. BUT MADE
IN NEW HAMPSHIRE GET ON A- WHAT
ARE THEY DOING IN MAINE AND NEW
HAMPSHIRE. THERE WERE NOT DOING
HERE IN CALIFORNIA. IT'S A IT'S
A GREAT QUESTION SO MAINE AND
NEW HAMPSHIRE HAVE BEEN- THE
LEADERS IN HEALTHCARE PRICE
TRANSPARENCY AND THEY HAVE FOR
YEARS. AND PART OF WHAT THEY DO
THAT IS SO IMPORTANT AS THEY
HAVE PUBLIC FACING WEBSITES
WHERE INDIVIDUALS CAN GO
ONLINE. AND PUT IN THEIR HEALTH
PLAN AT LEAST IN. IN NEW
HAMPSHIRE THEY HAVE THAT THEY
CAN THEY CAN GO ONLINE PUT IN
THEIR HEALTH PLAN- AND- FIND
OUT HOW MUCH A CERTAIN
PROCEDURE IS GOING COST. A
DIFFERENT FACILITIES AROUND THE
STATE AND SO THAT IS AND IT'S
BEEN VERY EFFECTIVE. FOR THEM
AND IT OFFERS THAT THE PATIENTS
MUCH MORE- TRANSPARENCY INTO
THAT SPACE THEY MADE VERY
EFFECTIVE USE OF THEIR ALL
PAYER CLAIMS DATABASES. THEY
ALSO PROVIDE OF REPORTS AND
INFORMATION TO POLICYMAKERS-
AND TO THE PUBLIC BASED ON WHAT
THEY HAVE IN THEIR DATABASE BUT
THEY'VE BEEN THINKING ABOUT
THIS AND WORKING ON IT FROM FOR
MANY MANY YEARS. NOW THAT
REPORT CARD IS MAINLY FOCUSED
ON ACCESS TO INFORMATION FOR
CONSUMERS AND I THINK THAT IN
THE NEXT YEAR WILL BE WILL BE
CHANGING IT UP A LITTLE BIT AND
MAKING IT MUCH MORE- POLICY
ENFORCEMENT RELATED SO THAT.
THE- THE GRADATIONS WILL BE
MADE ABOUT HOW MUCH INFORMATION
GOES TO IS AVAILABLE ALSO TO
POLICY MAKERS AND ACADEMICS AND
OTHER PEOPLE NOT JUST CONSUMERS
BUT THAT'S WHAT IT'S MOSTLY
ABOUT IS THAT THEY HAVE PUBLIC
FACING WEBSITES WHERE PEOPLE
CAN GET- INFORMATION IN REAL
TIME HELPING THEM ESTIMATE HOW
MUCH IT WILL BE FOR THEIR
HEALTH PLAN TO GO TO PARTICULAR
PROVIDERS. THAT WOULD BE REALLY
HELPFUL QUITE FRANKLY I THINK-
ASSEMBLY MEMBER RANDY AT ONE
POINT IN THE- HEARING WE HAD
SAID IT'S- EASIER TO FIND OUT
WHAT YOU WHAT YOU MIGHT PAY TO
HAVE OUR DOG TREATED AT A
VETERINARIAN. THAT IS WHAT YOU
MIGHT HAVE TO PAY FOR YOUR
DOCTOR'S OFFICE- AND THAT'S-
THAT'S THAT'S UNFORTUNATE
THAT'S UNFORTUNATE SO- DO YOU
DO YOU THINK. INCREASING
PRICES. THROUGHOUT CONSOLIDATED
MARKETS. HAS AN EFFECT ON
INDEPENDENT PRACTICES THESE ARE
SORT OF THAT WHICH ARE THERE
AREN'T VERY MANY THESE DAYS
OBVIOUSLY BUT- DO YOU THINK
THERE'S A TRICKLE DOWN EFFECT
THERE BECAUSE- AS I WAS AN
INDEPENDENT PRACTITIONER- IN
THE FIELD OF DENTISTRY. AND I
COULDN'T JUST CALL OUT MY
COMPETITOR AND SAY HEY WOULD
YOU CHARGING FOR THIS- AND-
THAT WAS THAT THAT'S AN ANTI
TRUST VIOLATIONS SO. BUT IS
THERE'S IS THE CONSOLIDATION
LEADING TO AN UPTICK IN PRICES.
WITH SMALL IT WITH WITH
INDEPENDENT PRACTITIONERS
VERSUS LARGE GROUPS AND SO ON.
SO I THINK I THINK THAT THERE
IS A GENERAL UPTICK SO I
UNDERSTAND THAT YOU KNOW
INDEPENDENT PROBE AT PHYSICIANS
CAN'T JUST CALL UP AND FIND OUT
WHAT OTHER PEOPLE. ARE CHARGING
BUT AS THE MARKET GOES UP
OVERALL- WE ARE SEEING YOU KNOW
PRICES RISE IN GENERAL ACROSS
THE BOARD AND WE SEE THIS A
FACT- WITH KAISER PERMANENTE IN
NORTHERN CALIFORNIA I REALIZE A
VERY VERY LARGE PLAYER BUT
THEY'RE NOT- BUT THEY HAVE.
THEIR THEIR PRICES IN NORTHERN
CALIFORNIA SORT OF SHADOW PRICE
WHAT WHAT WE'RE SEEING- IN SOME
OF THE BIGGER SYSTEMS- AND
THEIR LIVES TO THEIR HIGHER IN
NORTHERN CALIFORNIA THAN THEY
ARE IN SOUTHERN CALIFORNIA. AND
I THINK THAT IS IN SOME WAYS
TRUE NOW THE OTHER THE FLIP
SIDE OF THAT COIN IS THAT FOR
SOME INDEPENDENT PHYSICIANS.
BECAUSE THEY'RE NOT A PART OF
THE SYSTEM INSURANCE COMPANIES
CAN PUSH DOWN ON THEIR PRICES
PRETTY HEAVILY BECAUSE THEY
DON'T HAVE THE MARKET POWER TO
REALLY PUSH BACK. AND SO YOU
CAN SEE DIFFERENT EFFECTS LIKE
THEY MAY BE AS A WHOLE RAISING
THEIR PRICES BUT THEY'RE
GETTING PAID. LESS THAN THEY
OTHERWISE MIGHT BE BECAUSE
INSURANCE COMPANIES CAN PUSH
DOWN ON THEM A LITTLE BIT MORE
AND I AM. THEN THE OTHER IS
GOOD SO I THINK THERE'S SORT
OF. TWO SIDES OF THAT COIN
THAT'S HAPPENING AND I'M NOT
REALLY SURE. WHAT'S HAPPENING
IN ANY PARTICULAR SITUATION.
LET'S HAVE A COUPLE OTHER
QUESTIONS IN IN THERE THEY
SHOULD BE PRETTY QUICK- YOU
MENTIONED IN IN YOUR AND OF THE
FIVE STATE YOU'RE TALKING ABOUT
I SAW A PHRASE COME UP I'D
NEVER SEEN BEFORE THAT'S THE
CERTIFICATE OF NEED AGENCY CAN
YOU EXPLAIN WHAT THAT IS. YES
SO CERTIFICATE OF NEED
AGENCIES- ARE IN. I BELIEVE.
THEY WERE VERY POPULAR IN THE
NINETIES I'M NOT SURE THEY'RE
PROBABLY IN LIKE FIFTEEN TO
TWENTY STATES NOW AND THEY WERE
DESIGN WHEN A LOT OF HEALTH
POLICY CONCERNS WERE AROUND
UTILIZATION WE HAD FEE FOR
SERVICE MEDICINE PEOPLE WERE
PROVIDING LOTS MORE CARE AND
THE- THE DATA WAS TELLING IN
HEALTH SERVICES RESEARCHERS
THAT THE MORE BEDS THERE WERE
THE MORE SURGERIES THAT WERE
BEING DONE IN THE MORGUE CARE
WAS BEING PROVIDED AND SO AS A
AS A- AS A PRACTICE STATE START
PASSING CERTIFICATE OF NEED
LAWS. THAT WOULD REQUIRE BEFORE
I HEALTH A HOSPITAL OR A HEALTH
CARE ENTITY COULD EXPAND EITHER
BY THROUGH ACQUISITION OR BY.
BUILDING A NEW BUILDING THEY
HAD TO GET A CERTIFICATE OF
NEED SHOWING THAT THERE WAS
SUFFICIENT NEED IN THE
COMMUNITY. TO- THERE ARE
SIGNIFICANT NEED IN THE
COMMUNITY TO WARRANT THE
INCREASE THAT AND SHE SAID THAT
YOU WOULDN'T JUST BE EXPANDING
UTILIZATION FOR NO NEED. NOW
WHAT'S INTERESTING IS THAT
THESE HAVE KIND OF FALLEN OUT
OF FAVOR AND THE THOUGHT HAS
BEEN OVER TIME THAT THEY WERE
BEING USED IN ANY COMPETITIVE
WAYS BECAUSE EXISTING HEALTH
SYSTEMS COULD CHALLENGE.
ARRIVALS CERTIFICATE OF NEED
APPLICATION AND COULD COME IN
AND THEY- THEY DON'T NEED THAT
EXTRA BED SPACE WE'VE GOT IT
COVERED HERE AND AS IT. AND AS
A MECHANISM TO SORT OF KEEP
MARKET POWER FROM GROWING
UNDERNEATH THEIR RIVALS WHAT
WE'VE SEEN IS THAT SOME STATES
HAVE BEEN VERY EFFECTIVE AT
USING THIS. APPROVAL PROCESS
THAT'S ALREADY IN PLACE WITHIN
THE STATE. TO THEN SAY WELL IF
YOU WANT TO ENGAGE IN THIS
MERGER OR ACQUISITION WE HAVE
TO YOU HAVE TO TELL US MORE
ABOUT HOW IT'S GOING TO IMPACT
COMPETITION HOW IT'S GOING TO
IMPACT PRICES AND THEY'VE USED
IT TO COVER. COMPETITIVE
CONCERNS AND THEY DO HAVE AN
APPROVAL PROCESS IN PLACE TO
SOME STATES ARE LOOKING AT IT
THAT WAY NOT ALL OF THEM ARE
BUT THAT'S SORT OF. THE HISTORY
OF THEM THEY SORT OF FELL OUT
OF FAVOR AND NOW THEY'RE BEING
USED- AS A MECHANISM TO CONTROL
CONSOLIDATION AND PRICES BY
SOME STATES LIKE CONNECTICUT.
GREAT THANK YOU. THEY MIGHT MY
FINAL QUESTION AND- IT YOU KNOW
WELL IT'S TO ME IT'S VERY CLEAR
THE CONSOLIDATION IS LEADING TO
HIGHER. HEALTHCARE PRICES- ARE
YOU WHERE OTHER FACTORS THAT
ARE INFLUENCING THE RISING
HEALTH CARE COSTS. SURE YES I
MEAN I THINK THAT TO SAY THAT
CONSOLIDATION IS THE ONLY
DRIVER OF HEALTH CARE PRICES
WOULD BE- NOT TOO I DO THINK
THAT IT IS THE MAJOR DRIVER AND
A MAJOR DRIVER BUT I THINK WE
ALSO SEE- THAT PRICES ARE BEING
DRIVEN BY. YOU KNOW THE COST OF
OVERALL YOU KNOW THE COST OF
PROVIDING CARE IN A CERTAIN
AREA SO IT'S MORE EXPENSIVE
JUST IN GENERAL TO PROVIDE TO
HAVE. HOSPITALS AND RUN
HOSPITALS IN A PLACE LIKE SAN
FRANCISCO THAN IT IS- IN OTHER
PARTS OF THE COUNTRY- IT'S ALSO
IT'S ALSO EXPENSIVE AND WE HAVE
A POPULATION THAT IS NOT- MAYBE
AS HEALTHY AS OTHER OPULATIONS
AND SO THE CASE MIX IS
IMPORTANT TO BE LOOKING AT. WE
HAVE AN AGING POPULATION THEIR
RANGE OF THINGS PHARMACEUTICAL
DRUGS ARE REALLY DRIVING THE
PRICE OF PHARMACEUTICAL DRUGS
ARE ALSO DRIVING HEALTHCARE.
PRICES UP SIGNIFICANTLY AND SO
I THINK TO SAY THAT THE ONLY
THING THAT'S HAPPENING WITH
HEALTH CARE PRICES IN THE
UNITED STATES ITS COMPETITION-
YOU KNOW IT IS JUST IS NOT
CORRECT THERE'S LOTS OF THINGS
THAT ARE HAPPENING. BUT
CONSOLIDATION AND COMPETITION
IS A MAJOR FACTOR AND IT'S ONE
THAT WE HAVE THE ABILITY TO GET
CONTROL OVER- AS OPPOSED TO
THERE'S NOT MUCH WE CAN DO
ABOUT OUR AGING POPULATION OR
OTHER THINGS LIKE THAT. WELL
THANK YOU VERY VERY MUCH
APPRECIATE YOUR YOUR INSIGHTS
ON THE INFORMATION- AND- I-
BUT- FOR SHAPE OF YOU OF BEING
THERE TO TESTIFY FOR US ODAY.
AND THANK YOU THANK YOU AGAIN
PERCENT- I WE WILL BE GOING
INTO PUBLIC COMMENT AT THIS
POINT- SO- THERE WAS AN ERROR-
ON OUR WEBSITE SO I DO WANT TO
CALL OUT THE TELEPHONE NUMBER.
AGAIN FOR PEOPLE CALLING IN AND
THAT NUMBER IS EIGHT SEVEN
SEVEN. SIX NINE TWO EIGHT NINE
FIVE SEVEN. AND THE CODE IS ONE
THREE ONE. FIVE FOUR TWO ZERO
TWO. AND- WE'RE GOING TO HAVE-
GET TRY TO GET THAT ON THE
SCREEN AS AS WE CAN HERE SO.
WHAT WE DO NOT DO ANY OTHER YOU
HAVE ANY OTHER COMMENTS FROM
THE MEMBERS HERE. OKAY I THINK
PROCEED THIS IS BEEN DISCIPLINE
VERY ENLIGHTENING AND I VERY
MUCH APPRECIATE THE
INFORMATION. AND WITH THE HELP
COST OF HEALTH CARE RISING AT
TWICE THE RATE OF INFLATION-
THAT'S A DISTURBING NUMBER- THE
CONTINUES TO GO ON YEAR AFTER
YEAR AFTER YEAR AND- SO IT
BEHOOVES US TO REALLY LOOK AT
THE FACTORS THAT ARE- LEADING
TO THAT. AND IT'S CLEAR THAT-
CONSOLIDATION IS ONE OF THOSE
FACTORS SO- WE WILL GO TO ARE
MODERATED- OUR MODERATOR AND-
ASK- ARE THERE- CALLERS WHO WHO
WANTED WHO ARE CALLING IN WILL
TRY TO LIMIT THE TESTIMONY TO
TWO MINUTES. PER CALLER PLEASE.
HAVE ANY PUBLIC COMMENT YOU MAY
PRESS ONE ZERO AT THIS TIME.
ONE ZERO FOR ANY PUBLIC COMMENT.
AND WE ILL GO TO A LINE OF
FIFTEEN YOUR LINE IS OPEN.
THANK YOU GOOD MORNING HELLO
DOCTOR WOULD DETERRED AND J. D.
ASK ON BEHALF OF FTA YOU
CALIFORNIA THANK YOU FOR YOUR
ONGOING LEADERSHIP AND THE
INTEREST IN LEARNING ABOUT OUR
COMPLEX HEALTH CARE SYSTEM AND
ACTUALLY EDUCATING. OTHER
MEMBERS AND THE PUBLIC
INFORMATIONAL HEARING WITH AND
YOU KNOW RISING HEALTH CARE
COSTS THE CHIEF CONCERN AMONG
OUR MEMBERS AND FAMILIES AS
THEY STRUGGLE TO AFFORD TO PAY
FOR HEALTH CARE- AND ADDS UP DR
KING OPEN. RISING HEALTHCARE
COSTS ARE ARE HOT ARE CAUGHT HI
NEARLY THE LACK OF COMP. YOU
TOO MORGAN. AND FRANKLY IN OUR
OPINION DUE TO CORPORATE GREED
AND A POWER GRAB OF CERTAIN
SYSTEMS DOMINATE THE HEALTHCARE
MARKET. ADDITIONALLY
CONSOLIDATION MORE OFTEN THAN
NOT ACTUALLY LEADS TO RAPID
WALKER LAY OFF AT THE COST
CUTTING STRATEGY FOR THE CHOIR
IN MERGING ENTITIES. AND ALL OF
THAT SAID THIS IS WHY WE
STRONGLY SUPPORT ANY EFFORTS BY
THE LEGISLATURE AND ALL LEVELS
OF GOVERNMENT TO FIND BOLD
SOLUTION TO CONFRONT AND
ADDRESS NEGATIVE IMPACTS OF
CONSOLIDATION EXACTLY RESTORED
SOME LEVEL OF COMPETITION BACK
IN THE MARKET. WHICH AFTER ALL
IS THE GOVERNMENT'S ROLE IN
FIXING MARKET FAILURES. WE
STRONGLY SUPPORTED THE CREATION
OF A P. C. D. WE APPRECIATE DR
KING PRESENTATION HIGHLIGHTING
DATA IS FOUNDATIONAL BUT ONE
THING MISSING IS THE NEED TO BE
ABLE TO GET PROVIDER LEVEL DATA
AND MAKE THAT ACCEPTABLE IN
ORDER TO MAKE COMPARISONS ON
PRICE QUALITY. EQUITY AND
ACCESS TO CARE. ADDITIONALLY WE
STRONGLY SUPPORTED SB NINE
SEVEN SEVEN BY SENATOR MINING
IT'S PAST SESSION WHICH WOULD
HAVE SERVED A CRITICAL NEXT
STEP IN RESTORING OVERSIGHT
ACCOUNTABILITY AND ENFORCEMENT.
OVER HEALTH CARE CONSOLIDATION.
I'VE YOU KNOW DOCTOR MANY SMALL
SYSTEM LIKE HOSPITAL MEDICAL
GROUPS. AND OTHER HAVE BEEN BY
NOW HIT HARD BY THE CLOSURES
DUE TO THE- MANY OF WHICH WILL
AT AT RED FOR. CONTROL BY YOU.
SUCH AS PROPERTY PRIVATE EQUITY
AND HEDGE FUND HI ALL OF WHICH
WE WOULD NOT HAVE IMAGINED
ENTERING THE HEALTHCARE MARKET.
BECAUSE OF THIS WE LOOK FORWARD
TO WORKING WITH YOU AND OTHER
MEMBERS ON PROPOSALS THAT WILL
BEING- CONSOLIDATING ENTITIES
MORE ACCOUNTABLE AND AT THE
SAME TIME DON'T INADVERTENTLY
HAD NEGATIVE WORKED FOR IMPACT.
THANK YOU. SO MUCH. THANK YOU
VERY MUCH. NEKOOSA NEXT BETTER
PLEASE. NEXT CALL SENATE WILL
COME FROM WIND SIXTY YEAH IS
OPEN. GOOD MORNING THIS IS YES
MEAN PALETTE ON BEHALF OF
HEALTH ACCESS CALIFORNIA WE
VERY MUCH APPRECIATE YOU
HOLDING THIS HEARING TODAY TO
SHINE A LIGHT ON HOW
CALIFORNIA'S HEALTH CARE
CONSUMERS ARE IMPACTED BY
CONSOLIDATION IN OUR HEALTHCARE
SYSTEM. AS YOU'VE HEARD TODAY
ROBUST ACTIVE ACADEMIC
LITERATURE AS WELL AS NEWLY
DEVELOPING SORT OF CASE LAW
DEMONSTRATES THE CONSOLIDATION
IN THE HEALTHCARE SYSTEM IS
STRONGLY CORRELATED WITH HIGHER
PRICES. AND NOT CORRELATED WITH
IMPROVED QUALITY. STUDIES HAVE
REPEATEDLY SHOWN THAT THE
HIGHER THE DEGREE OF
CONSOLIDATION OF HEALTH SYSTEMS
THE HIGHER THE PREMIUMS PAID
AND THE HIGHER THE COST OF
VARIOUS PROCEDURES. MANY
ENTITIES SEEKING TO MERGE
CLAIMED THE CONSOLIDATION
IMPROVES HEALTH OUTCOMES AND
OTHER QUALITY MEASURES BUT
THERE'S NO EVIDENCE IN ACADEMIC
LITERATURE TO SUPPORT THESE
CLIENTS. A RECENT ANALYSIS
SHOWS THAT ALMOST 60% OF
CALIFORNIA PHYSICIANS THAT
PRACTICE AND GROUPS AFFILIATED
WITH OR CONTROLLED BY HEALTH
SYSTEMS. ADDITIONALLY WE ARE
LEARNING THAT PRIVATE EQUITY
AND HEDGE FUNDS ARE ALSO
ENTERING THE SPACE AND THEY ARE
DRIVEN BY PROFIT NOT THE
DELIVERY OF HEALTH CARE AT ALL.
GIVEN THE FINANCIAL STRAIN
FACED BY PHYSICIAN PRACTICES IN
HOSPITALS DUE TO THE PANDEMIC
THE PACE OF AFFILIATIONS
ACQUISITIONS AND OTHER FORMS OF
TRANSCRIPTIONAL WILL LIKELY
CONTINUE TO ACCELERATE. WE NEED
TO EXPAND THE ATTORNEY
GENERAL'S AUTHORITY TO REVIEW
ALL MERGERS AND TRANSACTIONS
SIMILAR TO THE AUTHORITY THEY
CURRENTLY HAVE HAD FOR OVER
TWENTY FIVE YEARS ON NONPROFIT
HEALTH FACILITY TRANSACTION.
THE EIGHT YOU SHOULD ALSO BE
ABLE TO EVALUATE THE MARKET
POWER IMPACTS SPARKED BY
ACTUALLY BUT ENTITIES ENGAGE IN
THAT MAY HAVE ANTI COMPETITIVE
EFFECTS AND IMPACTS RIGHT. WE
ALSO NEED TO CONTINUE TO
EVALUATE WHAT ADDITIONAL THIRTY
DMH THE MAY NEED TO EVALUATE
BURGER TRANSACTION. THAT
FURTHER CONSOLIDATE THE MARKET.
CONSOLIDATION CONTINUE IMPACT.
UNTIL WE CAN ADDRESS THESE
ISSUES LEGISLATIVELY HELP
ACCESS LOOKS FORWARD TO
CONTINUING THAT WORK WITH THE
LEGISLATURE AND OTHER
STAKEHOLDERS THANK YOU. THANK
YOU VERY MUCH. NEXT CALLER
PLEASE. THANK YOU. AND THE NEXT
CALL WILL COME FROM LINE
THIRTEEN YOUR LINE IS OPEN.
GOOD MORNING MISTER CHAIR OF
POPCORN WITH THE CALIFORNIA
HOSPITAL ASSOCIATION. HAS CALL
THE NINETEEN CONTINUES TO
SPREAD MANY CALIFORNIANS RELY
ON HEALTH SYSTEM DELIVER CARE.
ESPECIALLY AS RESOURCES LIKE
PERSONAL PROTECTIVE EQUIPMENT.
TESTING SUPPLIES AND HEALTH
CARE STAFF CONTINUE TO BE
STRETCHED THEM. INTEGRATED
HEALTH SYSTEMS HAVE THE UNIQUE
ABILITY TO RAPIDLY TRANSFER
SCARCE RESOURCES AMONG
FACILITIES AND HAVE BEEN AT THE
FOREFRONT OF ACCEPTING
TRANSFERS OF PATIENTS FROM CO
BUT HOT SPOTS ACROSS THE STATE.
AND THE TO SAVE THOUSANDS OF
LIVES. EVEN BEFORE THE PANDEMIC
HEALTH SYSTEMS HAVE PROVIDED
CRITICAL LIFELINE. TO
STRUGGLING WILL AND THE PET
HOSPITALS WHO OFTEN LACK THE
RESOURCES TO COMPLY WITH THE
MYRIAD OF REGULATORY
REQUIREMENTS. FOR THE ABILITY
TO PROVIDE ON THEIR OWN THE
WIDE RANGE OF SERVICES NEEDED
AND A COMMUNITY. THROUGHOUT
CALIFORNIA MANY HOSPITALS TODAY
ARE OPEN AND PROVIDING CARE
ONLY BECAUSE THEY ARE PART OF
AN INTEGRATED HEALTH CARE
SYSTEM. AS THIS COMMITTEE
CONSIDERS THE IMPORTANT ISSUE
OF HEALTHCARE PORTABILITY AND
CONSOLIDATION. IT IS ESSENTIAL
TO LOOK AT THE ENTIRETY OF THE
HEALTHCARE SYSTEM INCLUDING
PROVIDERS PHARMACEUTICAL
COMPANIES PRIVATE AND
GOVERNMENTAL PAYERS AND
PURCHASERS NOT JUST ONE
PROVIDER GROUP. YOU HAVE TO
MAKE CERTAIN THAT EVERY
CALIFORNIAN HAS AFFORDABLE
COVERAGE ACCESS TO CARE WHEN
THEY NEED IT. BOB
SIMULTANEOUSLY MONITORING THE
COST OF HEALTH CARE REGULATION
THEREBY ENSURING VALUE FOR
HEALTHCARE DOLLAR THANK YOU.
THANK YOU VERY MUCH THE NEXT
CALLER PLEASE THANK YOU. AND I
CALL WILL COME FROM MINUS
SEVENTEEN YOUR LINE IS OPEN.
GOOD MORNING MR CHAIRMAN
MEMBERS BRANDON MARCHING WITH
THE CALIFORNIA MEDICAL
ASSOCIATION- WE WANT TO THANK
YOU FOR HOLDING THIS
INFORMATIONAL HEARING ON
CONSOLIDATION WITHIN THE HEALTH
CARE MARKET PLACE AND FOR THE
OPPORTUNITY TO COMMENT TODAY.
HE MAY HAVE LONG VIEWED
CONSOLIDATION WITHIN THE
HEALTHCARE MARKET AND THE
IMPACT IT HAS ON PATIENT ACCESS
TO CARE AND COST AND ISSUE THAT
MUST BE ADDRESSED. IT IS FOR
THIS REASON THAT WE STILL WITH
A BROAD COALITION OF HEALTHCARE
LABOR PATIENT AND CONSUMER
ADVOCATES AND COMMITTED TO
WORKING WITH COMPANIES TEND TO
BRING DOWN CONSUMER COSTS
EXPAND ACCESS TO HEALTH CARE
NOT JUST THE ISSUE OF
CONSOLIDATION PERMIT PATIENT
CENTERED AND COST PERSPECTIVE.
WE ECHO MANY OF THE POINTS THAT
IN THE BACKGROUND MATERIALS
WRITTEN BY THE COMMITTEE STAFF
AND EMPHASIZED THE NEED FOR
ACTION TO ADDRESS PARKING
CREATED DRIVEN BY CONSOLIDATION
ESPECIALLY BY FACILITIES.
RESPECTIVELY THE BACKGROUND
MATERIAL TO CLICK THE CONTACT
OF CONSOLIDATION AND CLINICAL
IN QUICK INTEGRATION AND IF NOT
ADDRESSED PROPERLY WILL FURTHER
EXACERBATE THE CURRENT
SITUTION. WILD HORIZONTAL AND
VERTICAL CONSOLIDATION HAS BEEN
SHOWN TO LEAD TO GREATER
INCREASE IN COSTS AND MORE
FREQUENTLY RESULT IN A LOWER
QUALITY OF CARE FOR PATIENTS.
CLINICAL INTEGRATION HAVE BEEN
SHOWN TO REDUCE THE RATE OF
GROWTH IN HEALTHCARE SPENDING
AND INCREASE CARE. COORDINATION
AND HEALTH OUTCOMES. AT THIS
COULD TIME AND- THE- BUT IN
LIGHT OF THE COLD. AND THEN I
CAN HAVE HEALTHCARE. DNA LOOKS
FORWARD TO ENGAGE WITH THAT AND
OTHERS TAKE. ON THE IMPORTANT
ISSUE. THAT HAVE BECOME IMPACT
ON THE STATE'S ABILITY TO
CONTROL HEALTH CARE COSTS AND
DELIVER QUALITY CARE TO
PATIENTS. THANK YOU SO MUCH FOR
YOUR TIME. THANK YOU VERY MUCH-
NEXT CALLER PLEASE. THANK YOU
AND AS A REMINDER IF YOU WOULD
LIKE TO GET INTO QUEUE FOR
PUBLIC COMMENT IT IS ONE ZERO.
AND THE NEXT ONE WILL COME FROM
EIGHTEEN YOUR LINE IS OPEN.
GOOD MORNING MISTER MEMBERS
OPERATES DOUGHERTY HERE ON
BEHALF OF THE CALIFORNIA
INDEPENDENT PHYSICIAN PRACTICES
ASSOCIATION THE CALIFORNIA
ACADEMY OF FAMILY PHYSICIANS.
WE APPRECIATE YOUR ONGOING
LEADERSHIP IN EXPLORING POLICY
OPTIONS TO ENHANCE HEALTHCARE
MARKET COMPETITION IN ORDER TO
DECREASE THE OVERALL COST OF
THAT CARE CALIFORNIA
INDEPENDENT PHYSICIAN PRACTICE
SO SHE CAN REPRESENTS FIVE
HUNDRED POSITIONS ACROSS
MEDICAL SPECIALTIES. AND
CHARACTER HUNDREDS OF THOUSANDS
OF CALIFORNIANS WE HAVE A
UNIQUE PERSPECTIVE AS THE ONLY
MEDICAL ASSOCIATION THE STATE
THE CONSIST ONLY POSITIONS AN
INDEPENDENT MEDICAL GROUPS.
UNFORTUNATELY INDEPENDENT
MEDICAL PRACTICES ARE THE
CASUALTIES OF HEALTHCARE
CONSOLIDATION OCCURRING IN
CALIFORNIA BUT HOSPITAL AND
HEALTH SYSTEMS REQUIRED
PRACTICES AND ACCELERATED PACE
THE ECONOMIC PRESSURES
INDEPENDENT MEDICAL GROUPS ARE
FACING DURING A CO DEPENDENT
MAKE WILL MAKE THAT PROBLEM
EVEN WORSE. WHERE JUNE THE
COMMITTEE TO PURSUE POLICIES
THAT PROMOTE LOWER COST
INDEPENDENT MEDICAL PRACTICES
AT A COMPETITIVE COUNTERBALANCE
HEALTHCARE FURNISHED IN THE
HOSPITAL. AND HEALTH SYSTEM
SETTING. FURTHERMORE BUSINESS
STRONG BELIEVE THAT WE-
ALLEGATION PARTICULARLY HELPS
BEING PER BY RELIGIOUS
AFFILIATED ORGANIZATIONS. WE
MUST ALSO TAKE INTO ACCOUNT THE
POTENTIAL EFFECTS ON ACCESS TO
ESSENTIAL HEALTH SERVICES
INCLUDING REPRODUCTIVE AND
WOMEN'S HEALTH SERVICES GENDER
CONFIRMING CARE AND OF LIFE
CARE THEY MIGHT POSITIONS ARE
CONCERNED THAT THESE RELIGIOUS
AFFILIATIONS MAY RESULT IN
RESTRICTIONS ON THE PRACTICE OF
EVIDENCE BASED MEDICINE ON THE
PATIENTS RIGHT TO MAKE
HEALTHCARE DECISIONS. THANK YOU
FOR YOUR TIME TODAY AND WE LOOK
FORWARD TO CONTINUE TO WORK
WITH YOU TO COMMITTEE AND ALL
STAKEHOLDERS ON THE SCENE
CRITICALLY IMPORTANT ISSUE
RELATED TO HEALTH CARE
CONSOLIDATION CALIFORNIA IN
EFFECT ON THE COST OF THAT CARE
THANK YOU VERY MUCH. THANK YOU
VERY MUCH- NEXT CALLER PLEASE.
THANK YOU AND AS A REMINDER YOU
MAY PRESS ONE ZERO. FOR AND
LIKE ANY PUBLIC COMMENT. ONE
ZERO. AND WE HAVE NO FURTHER
PUBLIC COMMENT QUEUE OKAY. WELL
THANK YOU VERY MUCH- MADAM
OPERATOR WITH THAT BRING IT
BACK TO THE COMMUNITY COMMENTS-
MISTER NAZARIAN OKAY WITH SO I
THINK EVERY I THINK OUR
SPEAKERS ONCE AGAIN OUR STAFF-
FOR PUTTING THIS TOGETHER AND-
A SPECIAL- HAPPY BIRTHDAY WISH
TO PATTY RODGERS R. COMMITTEE
SECRETARY IN NINETEEN IF SHE'S
OUT THERE STILL LISTENING I
HOPE SHE IS. HAPPY BIRTHDAY
PADDING AND- BUT THAT OUR
MEETING IS ADJOURNED THANK YOU.