5 Things California: 2020 Democratic nominee, prescription drug cost transparency, Dilek Barlow

2019 is here and upon us, which—sadlymeans that the race for the Democratic nomination for President of the United States is set to begin. The legislature hasn’t even started in earnest yet, and candidates are coming forward… 

I mention this because, as you’ll see below, California’s role in 2020 will be impacted by its health policy politics in 2019. That and a few other items are what we’re watching in California health care for January 2019 (364 days before the Iowa caucuses).


DJ 5 Things Signature

With help from Emily Boerger
and Sara Gentzler


1.  The legislature, single payer, and the 2020 Democratic nomination for president

In this article, I try to connect some dots between the energy we see on the left around a single-payer health policy and what we might expect from the Democratic nomination for President of the United States. Here’s the summary: Expect the Democratic contest for the nomination for President of the United States to get here before we know it. (The first debate is scheduled for June.)

Expect that supporting a single-payer policy for health care will be a requirement to get the nomination. And expect that what happens in the California legislative session will provide important context and momentum for what happens at the ballot box in California on March 3, 2019.


 2.  Looking ahead to the governor’s budget

The governor is slated to present his 2019-20 budget to the legislature on January 10th. Reporters at Politifact recently fact-checked a claim from Gov. Jerry Brown that he’ll leave office with a budget surplus of “closer to $30 billion.” The article cites this fiscal outlook report from the Legislative Analyst’s Office (LAO)—a report that opens, in-part, with the line “It is difficult to overstate how good the budget’s condition is today.”

It specifically predicts that Health and Human Services spending will increase $1.6 billion compared to last year—driven mostly by a $1.4 billion increase in spending in Medi-Cal (this web post from LAO dives more into the projected increase). Notably, a sometimes contentious MCO tax that is expected to sunset after 2019 recently got new legs. The feds approved a similar tax in Michigan, suggesting the feds would also approve the California model. That would result in about $1.5 bn in funds—dollars currently coming into the state coffers but which are at risk of being lost.

3. Take Kamala Harris’s campaign for president seriously

I don’t hear a lot of folks in California excited about the idea of Harris running for president. I hear a good amount of folks in DC, however, talking about her potential candidacy (though Diane Feinstein, apparently, isn’t one of them). And, if you’re a party insider, you know that the way delegates will be allocated in 2020 gives Harris a more than reasonable shot at the nomination.

I lay out the logic of this pathway here, but this is the bottom line: I expect a brokered convention for the first time since 1972—and really since 1952. In that case, there is little chance a straight, white man leads the ticket in 2020. And if Harris can’t win a plurality of votes heading into the convention, being in the top three candidates may well be enough.

Think that’s a shock? When was the last time that a straight white man was nominated by Democrats anyway? It was 2004—almost a generation ago.

4. Video: Dilek Barlow, Wildflower Health

Dilek Barlow is the Senior Director of Government Solutions at Wildflower Health. She joins us in this edition of “What They’re Watching” to discuss lowering the maternal mortality rate.

“[Our applications are] a way to help families navigate their care and connect to care because families are the hub of health care decisions – in particular women. They’re the chief medical officer or the chief health officer of the home… And if you can have a positive experience for a woman in her first pregnancy, that will just have ripple effects across her healthcare journey and across the lifespan for herself, her children, and her partner if she has one.”

5. Prescription Drug Cost Transparency Report

The California Department of Managed Health Care (DMHC) released its Prescription Drug Cost Transparency Report last week, detailing data submitted by 25 health plans on the costs of covered prescription drugs and their impact on health plan premiums. The report concludes what many plan executives have been talking about for the last five years: that prescription drug costs have a significant impact on health plan premiums in California, primarily related to the cost of specialty drugs.

According to data released in the report, health plans paid nearly $8.7 billion for prescription drugs during 2017 (a 5 percent increase from 2016), representing 13.1 percent of total health plan premiums. Broken down by specific drug type, specialty drugs made up just 1.6 percent of all prescription drugs, but accounted for 51.5 percent of annual spending on drugs. Generic drugs made up 87.8 percent of the volume of drugs and 23.6 percent of the cost, and brand-name drugs made up 10.6 percent of the total volume and 24.8 percent of annual spending.