The extent to which health care providers shift costs -- increase the price charged to privately-insured patients to recover part of the costs of treating others -- has been the subject of long-standing policy debates, and in particular, is central to the current debate in California.  Often labeled a "hidden tax," existence of a major cost shift has been used as justification for substantial policy changes by the Governor, policy experts and business leaders.

This study finds that government underpayments to hospitals in the Medicare and Medi-Cal programs are a substantial factor in driving up private health care costs. But it also found that the impact on private payers of uncompensated care for the uninsured was minimal.

Development of California Competitiveness Index

To be released Fall, 2007

This project will develop a "California Competitiveness Indicator" that measures and describes California's competitive advantages and disadvantages, and leads public policy makers to leverage the benefits and mitgate the weaknesses of the state's business and investment climate. An annual indicator of the state’s competitiveness would serve several useful purposes:

• Establish the baseline for policy debates.
• Provide a useful additional mechanism for the state and private economic development organizations to use in marketing to prospective investors. 
• Become an indicator to predict the effects of policy proposals.

An academic expert has been retained to develop the indicator.  The research design is underway, including an activity to interview up to a dozen California executives with business expansion experience to understand key criteria, by industry category, for business location decisions.  An advisory board will also be assembled to oversee the research.