The UCLA Center for Health Policy Research’s Health Economics and Evaluation Research (HEER) Program has identified and assessed key design considerations that should be part of any effort to reform health care in California under a unified financing model.

In their 181-page report, the authors from UCLA, UC Irvine, and RAND thoroughly examined the various aspects of the health care system, such as the role of health plans, provider payments, benefits, and the potential reduction in administrative burden on payers and providers and their respective impacts on access, quality, and equity.

The report was completed in response to provisions of Senate Bill 770, which directed the California Health and Human Services Agency to take steps toward designing a health care delivery system that provides benefits under a unified health care financing model.

The overall goals of a unified financing model would be to increase access to better-quality health care, and promote health equity for all, while being less costly. A unified financing model could take the form of a single-payer system, in which the California government collects revenues and directly pays for health care services, but it could also include multi-payer systems that include private plans as well.

The report was led by the HEER Program under a contract with the California Department of Health and Human Services (CalHHS). The HEER Program’s report builds upon previous work of the Healthy California for All Commission from 2019 to 2022.

“Unified financing is an important step toward health care for all under a system that does not discriminate what types of services you are entitled to because you work for a large employer or have higher income or are not young or old enough’ said Nadereh Pourat, PhD, director of the HEER Program and the report’s lead author. “Our current system is fragmented and costly, offers incentives for duplication and inefficiency, and leads to poor health outcomes for those most in need of care.”

The report lists considerations for choice of the financing model; eligibility and enrollment rules; simplification of administrative burden; provision of benefits; premiums and cost sharing; and provider payment to promote access and quality, effectiveness, efficiency, and equity.

Among some of the important considerations raised in the report:

• Single vs. multi-payer approach: A single payer approach would reduce duplication in administrative task.
• Eligibility for coverage: Universal eligibility is likely to eliminate inequities in access and quality of care.
• Comprehensiveness of benefits: More comprehensive benefits promote improved health but would cost more.
• Premiums and cost sharing: Cost-sharing approaches such as deductibles and copayments restrict access to care and put individuals at risk of medical debt but also reduce use of low-value care and overall expenditures.
• Provider payment: Methods of payment to providers change incentives to delivery of care and are important drivers of efficiency and equity.

Based on its track record of delivering high-quality studies, local, state, and federal agencies have chosen the HEER Program to conduct health care program evaluations of policies and programs on health insurance coverage, how health care is delivered, whether population health has been affected, and whether cost savings are achieved.

Previous reports include evaluations of California Advancing and Innovating Medi-Cal’s (CalAIM) Providing Access and Transforming Health (PATH) and Community Supports components, the Health Resources and Services Administration (HRSA)-funded Health Center Program, Housing for a Healthy California, California’s Public Hospital Redesign and Incentives in Medi-Cal (PRIME) Program, and the state’s Whole Person Care, and Los Angeles County’s Parks after Dark, among many others.