The health care system is broken. Efforts to fix it are missing the mark.

Here’s something most of us can agree on: The health care system in America is broken. It’s too expensive; there’s a shortage of doctors, particularly primary care providers; government insurance – primarily Medicare and Medicaid – doesn’t reimburse practitioners at a high enough rate, leaving them overly reliant on commercial insurance companies.

Into this web of problems, California has added oversight. In 2022, the state’s Office of Health Care Affordability was created, and its board convened for the first time in March 2023. Per statute, “The office shall be responsible for analyzing the health care market for cost trends and drivers of spending, developing data-informed policies for lowering health care costs for consumers and purchasers, creating a state strategy for controlling the cost of health care and ensuring affordability for consumers and purchasers, and enforcing cost targets.”

These are grand and important goals, implemented in a painstaking public process through thousands of pages of analysis and spreadsheets, and through hundreds of hours of deliberation. Staff writer Pam Marino, who covers health care, has attended many dozens of those hours of deliberation virtually or in person.

As Marino has reported, that led OHCA to implement a 3-percent cap on annual spending increases at hospitals across the state. Even before that cap phases in – and as hospitals face a barrage of challenges, including the looming prospect of $880 billion in Medicaid cuts from the feds – OHCA has moved on to evaluate an even more stringent cap on what it has defined as high-cost hospitals. Two local hospitals, Salinas Valley Health and Community Hospital of the Monterey Peninsula, made OHCA’s list of 11. (For more about the board’s vote on April 22, see story.)

Officials at SVH and Montage, the parent company of CHOMP, are on the defense. OHCA has played a much-needed public forum for people to vent about high hospital bills, and the hospitals have been cast as villains; correspondence to OHCA weighing in for and against the cap came in at 528 pages long.

While hospital leaders acknowledge there are opportunities to find more efficiencies, they are deeply frustrated by what seems like a misunderstanding of their accounting.

A big part of SVH and Montage officials’ frustration comes from OHCA’s classification of these institutions as “hospitals” rather than as “systems.” Both hospitals make money, but other operations – like clinics and outpatient care – are money losers, and they are subsidized by the hospitals’ positive balance sheets.

Just this month, Montage announced it was absorbing Monterey Spine and Joint; it will reopen on April 28 as Montage Orthopedics and Sports Medicine. “Sustainability of private practice has really become a thing of the past,” Dr. Samera Kasim, an orthopedic physician at MSJ, told Marino. And in Salinas, SVH is taking over Pacific Coast Pediatrics on May 1 as part of PrimeCare.

That two giants continue to consolidate medical practices presents obvious problems, but it also illuminates the even bigger problem: That it’s too expensive to run an independent medical office in Monterey County.

What’s even more frustrating is that even if hospitals can and do shrink their margins, there is a link missing: the behemoth in-between entities in this equation, insurance companies, are under no obligation to pass along those savings to patients.

As OHCA was taking shape, state lawmakers were considering whether to implement single-payer health care in California. The concept known as CalCare, introduced by Assemblymember Ash Kalra, D-San Jose, would have saved an estimated $42 billion annually in administrative costs alone. In 2024, the Assembly Appropriations Committee pulled CalCare off the table.

“We must remain committed to advocating for a more inclusive and equitable health care system for all,” Kalra said in a statement.

That is part of OHCA’s mission, but even cost caps won’t get us there – and they might backfire. “We rely heavily on SVH for the specialty services we cannot offer,” Clínica de Salud del Valle de Salinas CEO Dr. Max Cuevas wrote, listing cardiology, wound care and oncology. “Penalizing SVH would undermine the health and well-being of our most underserved patients.”

SARA RUBIN is the Weekly’s editor. Reach her at sara@montereycountynow.com