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Few people have had a closer view of California’s health care affordability challenges than Elizabeth Mitchell. As president and CEO of the Purchaser Business Group on Health and a member of the Office of Health Care Affordability (OHCA) board, she has spent the past three years helping implement one of the most comprehensive state-level cost reform frameworks in the country. It includes a 3% cost growth target, ambitious primary care investment goals, meaningful oversight of consolidation and private equity, and the strongest enforcement authority of any state.
On May 28, Mitchell announced her resignation from the OHCA board. Her conclusion after three years inside the work is stark: the affordability crisis is accelerating, the industry has resisted accountability at nearly every turn, and the system will not reform itself. Patients, employers, and policymakers will have to drive the change.
That is a hard message, but it is supported by the evidence. Her full statement is worth reading, and it appears below.
Elizabeth Mitchell, PBGH President and CEO, Statement on California Office of Health Care Affordability Board Resignation
Three years ago, Governor [Gavin] Newsom appointed me to California’s Office of Health Care Affordability board. My term has now come to a close. I leave with gratitude and with a conclusion that reaches far beyond California. The affordability crisis is here, accelerating, and untenable for employers and families alike.
OHCA’s staff and my fellow board members deserve enormous credit for delivering what the state asked for. In a 2023 Health Affairs article, PBGH and our coalition partners described California’s effort as the most comprehensive healthcare cost reform framework of any state in the nation:
- A 3% cost growth target indexed to what working families actually earn
- One of the nation’s most ambitious targets to grow primary care investment
- Real authority to scrutinize consolidation and private equity transactions shaping the industry
- The strongest enforcement framework of any state
- An office with the staff, data, and legislative mandate to make a meaningful difference
Perhaps most importantly, we created a public forum where the people who actually pay the price of this system are heard. Month after month, patients, family caregivers, workers, and small business owners came forward to describe what unaffordable care has done to their families, their finances, and their futures. They are the heroes of these three years. And these are the people to whom we owe progress.
At the same time, much of the industry resisted this effort at every step. The hospital association sued OHCA over a 3% target that still allows costs to grow more than 15% over five years. Insurers have largely dodged accountability and offered no meaningful innovations either in payment models or administrative practices that drive up costs without improving health. Each sector pointed at the others and circumstances “beyond their control” rather than taking accountability or action.
After watching this play out for three years, I see clearly that accountability will not come from within the industry. No one is prepared to willingly reduce their own revenue, no matter the consequences for patients, employers or public programs. In every comment, letter, and testimony (and there were hundreds) the opening was always, “We support the goals of affordability,” which was immediately followed by “but” or “however” with a litany of reasons why it is not achievable or why they can’t make the necessary changes. The exceptions who demonstrated what is possible — MemorialCare, Providence, and other innovators — actually proved the rule. They made it clear that change benefiting patients and purchasers is in fact possible and that the results are impressive, but what is needed is will and leadership.
We understand the current system does not support our goals. The incentives are aligned with cost growth. And that is the point of the work — to change the incentives and the system. But the system will not reform itself. Public demand has not changed that. A modest, enforceable growth target has not changed that. The lesson of these three years is the lesson of the last 30 — costs will continue to escalate unless and until something stops them.
California would not have created OHCA if the market was working. In much of the country, consolidation has already gone past the point where competition alone can fix it. As Yale economist Zack Cooper recently wrote in The New York Times, in hospital markets that are effective monopolies, “regulation isn’t a departure from sound economics—it’s the only tool left.” A dysfunctional market and a highly consolidated system lacking leadership and will to change has resulted in an affordability crisis. Which means the rest of us — employers, patients, and policymakers — will have to act.
