POLITICO California Playbook PM: Opening the books on health care costs

Presented by U.S. Bank: Your afternoon must-read briefing on politics and government in the Golden State

Jul 11, 2023 View in browser   By Rachel Bluth Presented by U.S. Bank BALANCE SHEETS OF POWER: What looks like a wonky technical tweak to a landmark health care affordability law is the latest point of contention in long-running disputes between doctors and the labor groups that represent health care employees. The proposed change has frustrated Kaiser, the California Medical Association and other groups that say the union and lawmakers are reneging on a deal last year in which they agreed to release financial details with the understanding that they’d be kept secret. “We’re here talking about proposals that did not make it into the final agreement,” California Medical Association Lobbyist Brandon Marchy testified at a recent committee hearing. “This is not how good-faith negotiations should be made or honored afterwards.” Hospitals and health plans already have to report financial data to the state’s newly created Office of Health Care Affordability as part of an effort to set cost targets and rein in the ever-inflating cost of care. But the new bill, AB 616, would open large medical groups’ financial books to the public instead of housing them behind closed doors in an alphabet soup of government agencies. Like with other financial reports on hospitals or plans, the high-level financial data would be available online. Getting this health care affordability office off the ground was no small feat. It took months of negotiations with nearly every actor in the health care industry. Medical groups, like Kaiser Permanente, say they made it clear they were willing to participate only if they could be sure their financial information was kept confidential. But it’s a new year and a new Legislature — and some lawmakers don’t care what deals were cut last year. “I understand there was a lot of negotiations last year, that there was a deal struck,” Senate Health Committee Chair Susan Talamantes Eggman said at a recent hearing. “I wasn’t a part of that politics … and this policy seems fair.” SEIU-UHW, a health care union that is negotiating with Kaiser Permanente on behalf of 57,000 union members, wants high-level information like balance sheets, revenue and costs to be available to people who research the health care industry, purchase health plans or oversee the markets. Proponents of the bill argue that making such information public is key to monitoring the financial solvency of ever-consolidating medical groups and providing regulators and academics with real information on where health care dollars are going. They also note that financial disclosure has become increasingly common at the state and federal level. It’s not unusual for lawmakers to pass a big bill and then later adjust the language, said Anthony Wright, the executive director of Health Access California, which was involved in negotiations to create the office. “This is what we agreed on — and there were certain things we wanted that weren’t included — but that doesn’t mean we stop advocating for our long-standing policy goals.” HAPPY TUESDAY AFTERNOON! Welcome to California Playbook PM, a POLITICO newsletter that serves as an afternoon temperature check of California politics and a look at what our policy reporters are watching. Got tips or suggestions? Shoot an email to ‎rbluth@politico.com or send a shout on Twitter. DMs are open! A message from U.S. Bank: At U.S. Bank, we believe young people deserve access to financial education. That’s why we’ve partnered with Junior Achievement of Northern California to teach young people the skills they need to take charge of their economic and academic success. By supporting the next generation, we are investing in communities across California not just today, but for decades to come. Because U.S. Bank is small enough to care, and big enough to make a difference. Learn more.   WHAT YOU NEED TO KNOW TODAY BACKLASH TO BACKLASH: State Democrats rushed to denounce a Southern California school board’s embrace of the culture wars, and now Rep. Darrell Issa’s (R-Calif.) campaign is trying to take advantage. Issa’s camp sent a letter to constituents this week arguing that Gov. Gavin Newsom “and the radical Left’s goal is clear: End local control of education and run schools from the top-down from the State Capitol” — playing off a central tension between Sacramento Democrats and Republicans in more moderate parts of the state. Issa is gearing up for a reelection campaign in a politically diverse swath of the state. Tying into the backlash against school board members in Temecula, a suburban town in his district, has offered him the chance to take up a fight with Newsom, who called the board president “ignorant” on Twitter for repeating the disputed claim that gay rights icon Harvey Milk was a “pedophile.” But the letter fudged some details. It claimed “Democrat party leaders, clearly at Newsom’s direction, have organized a recall effort.” In fact, the brewing recall against the newly seated board majority has been organized by the nonpartisan One Temecula Valley PAC, a group formed in the fall to fight against a pastor’s picks for the board. Democrats and independent voters are involved in the effort, as well as some Republicans, including former Temecula Mayor Maryann Edwards. Local Democrats have promised an intense focus on down-ballot races moving forward, but they haven’t contacted recall organizers in Temecula, according to PAC co-founder Jeff Pack. Pack called the Issa letter “more partisan political rhetoric,” and said that if the Democratic Party tries to get involved, “it’s not going to go well for us in our recall efforts.” — Blake Jones   A message from U.S. Bank:   ON THE BEATS FOOD FIGHT: State Senate Judiciary Chair Tom Umberg announced today that his committee won’t vote on a proposal to hold fast-food companies liable for workplace violations committed at individual franchises before an important deadline. Instead, he will request a rules waiver to allow the bill to be heard later this session. The unusual maneuver is the latest twist in an ongoing battle between the fast-food industry and unions that has become one of the most contentious fights in Sacramento. Umberg’s decision to delay Assembly Bill 1228 ahead of the Legislature’s Friday deadline for bills to clear policy committees comes amid intense opposition from industry groups, which argue that joint liability would transform the franchise model — essentially turning owners of individual restaurants into middle managers for corporate offices. Assemblymember Chris Holden introduced the liability bill after fast-food companies spent millions to delay or block a new state law aimed at regulating wages and safety standards in the sector. He had stripped a liability provision from that law in an attempt to ease industry concerns. Even with the extra time to negotiate with the Judiciary Committee and opposition, Holden faces major obstacles. It was Umberg’s committee that urged Holden to take out the joint-liability provision from last year’s bill, and a group of restaurants and trade associations opposing AB 1228 promised they would not let up their opposition. — Alexander Nieves Power lines near Los Angeles International Airport last summer. | Patrick T. Fallon/AFP/Getty Images JUICED UP: California is heading into a heat wave with enough battery capacity to store the equivalent of more than twice the power produced by the Diablo Canyon nuclear plant — a tenfold increase from 2020. That’s particularly important during the evening, when demand soars and there’s no more solar feeding into the grid. The 5,000 megawatts of battery storage can provide enough electricity to power approximately 3.8 million homes for up to four hours, according to California’s Independent System Operator. Batteries provided roughly 3,300 MW of energy during last summer’s grid-straining heat wave. Along with plentiful hydropower output from a wet winter, the added battery capacity has led to state officials predicting less strain on the grid this summer even as soaring temperatures increase demand. The California Public Utilities Commission has called for the development of more than 10,000 MW in storage capacity by 2026. — Camille von Kaenel AROUND CALIFORNIA — “Leslie Van Houten, Manson family member, released from prison,” by the Los Angeles Times’ Christian Martinez: Gov. Gavin Newsom denied Van Houten’s parole multiple times but was overruled by a California appeals court earlier this year. On Friday he said he would not challenge an appellate court’s decision to allow parole for Van Houten. — “San Francisco’s drug-plagued UN Plaza could get skatepark, pingpong tables, plans reveal,” by the San Francisco Standard’s Garrett Leahy. Plans were filed Monday to change part of the 150,000-square-foot plaza into a skatepark, adding a bar and granite ledges to grind on, plus a pyramid-shaped ledge similar to La Republique skatepark in Paris, plans say. MIXTAPE — “Despite A’s Las Vegas plans, MLB commissioner leaves door open to Oakland,” by the San Francisco Chronicle’s John Shea.  — “California man paralyzed from run-in with police gets $20 million settlement,” by The Associated Press’ Tran Nguyen.  — “A waterfront Newport Beach home hits the market for $74 million,” by The Wall Street Journal’s Katherine Clarke.  A message from U.S. Bank: At U.S. Bank, community is everything.   That’s why we’re investing in communities across California by partnering with organizations like Junior Achievement. Together, we are teaching young people the skills they need to take charge of their economic and academic success. Students in these programs learn valuable financial education lessons, build professional skills and plan for the future. We are proud to offer our staff the opportunity to mentor young people in practical, meaningful ways that will impact their lives as they grow into adulthood. By supporting the next generation of Californians, we’re investing in the future of the state and its communities. U.S. Bank. Small enough to care, and big enough to make a difference. Learn more.     Follow us on Twitter Katy Murphy @katymurphy POLITICO California @politicoca   Subscribe to the POLITICO Playbook family Playbook  |  Playbook PM  |  California Playbook  |  Florida Playbook  |  Illinois Playbook  |  Massachusetts Playbook  |  New Jersey Playbook  |  New York Playbook  |  Ottawa Playbook  |  Brussels Playbook  |  London Playbook View all our political and policy newsletters Follow us

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