LA Business Journal: AB3087 Has Serious Unintended Consequences

Thomas M. Priselac, president and chief executive officer of Cedars-Sinai Health System, wrote an opinion article for the Los Angeles Business Journal urging a strong look at the unintended consequences that would come with the passage of AB 3087, a bill intended to address rising healthcare costs in California.

"At first glance," Priselac wrote in the piece, which appeared in the May 21 issue of the Business Journal, "the language in Assembly Bill 3087 appears to provide a clear, simple way to solve the cost problem: Regulate the cost of healthcare by regulating healthcare prices. The bill promises to lower commercial insurance prices by creating a state commission to determine commercial payments for doctors, hospitals and other healthcare providers based on Medicare payment levels."

However, he wrote, the legislation is deeply flawed. Priselac pointed out that the bill fails to take into account the multiple drivers of healthcare costs. As a result, its passage would have the unintended consequence of reducing access – especially for the poor – without effectively reducing real costs.

"The unintended consequences would be reduced access – especially for the poor – without effectively reducing real costs," Priselac wrote in the Business Journal. 

The bill, he added, would also drive down hospital revenues, which would in turn feed a growing shortage of nurses and physicians at a time when healthcare providers are struggling to keep up with the demand for talent amid increased need for healthcare services.

Acknowledging that rising costs are a problem, Priselac called for a "meaningful dialogue to develop a complete understanding of the (cost) drivers."

Doing that, he wrote, would allow all stakeholders to "move in a timely way to identify the solutions and a transition plan to achieve effective change. Hospitals and physicians in California are prepared to be part of such an effort."

Click here to read Priselac's complete column in the Los Angeles Business Journal. 

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