REPORT – California wastes billions on sick care, leaving little for community health


In a disturbing paradox, increased state spending on medical treatment may actually be leading to worse health conditions for Californians.

Analysis of California’s state budget from 2007 to 2018 finds that health care spending has skyrocketed, leaving fewer dollars to fund programs and services that support health and prevent illness at the community level.

As investments in community conditions lag, millions of Californians continue to suffer from chronic health care problems, high infant mortality rates, and lower life expectancy, brought on by toxic air and water pollutants, poverty, food deserts, lack of affordable housing, and low levels of formal education.

While some health care spending has been put to good use expanding coverage, billions of dollars are wasted on overpriced services, low-value care, and administrative inefficiencies.

To ensure the long-term health of the state, California needs to eliminate health care waste and direct the savings toward increased funding for programs that improve community conditions—like public education, public health, housing assistance, food assistance, and income support.

“California is spending billions of dollars on overpriced and unnecessary care, money it should be spending to keep communities healthy from the start.”
– Shannon Brownlee, senior vice president of the Lown Institute

Not only does spending on social programs make people healthier, but these investments pay for themselves many times over, through more productive workers, fewer emergency room visits, and a reduction in unnecessary hospitalizations.

California Budget Facts

From 2007 to 2018, health care spending grew by 146%, while spending on community conditions grew just 39%.
At least $21 billion and as much as $44 billion of health spending is wasted each year on overpriced services, low-value care, and administrative inefficiencies.
From 2007 to 2018, spending on social services, public health, and the environment decreased from $1.22 to $0.68 for each $1.00 spent on health care.
From 2007 to 2018, health care spending increased by $71 billion, an amount greater than the entire 2018 budget for social services.

Community Conditions Facts

In Madero, Kings, and Fresno counties, the rates of asthma-related emergency room visits by young children is twice that of the state overall.
The Edison neighborhood of Fresno has a diabetes hospitalization rate of 39/10,000, while the more affluent Woodward Park neighborhood has a rate of 1/10,000.

Social Media Images

In the News

More state spending on health care may be eroding Americans’ healthSTAT News, by Shannon Brownlee and Benjamin F. Miller

Investing in Community to Cut Health Care CostsUS News & World Report

California’s health care spending is actually hurting our health, researchers sayThe Sacramento Bee

New Report Shows Spending On State Sponsored Healthcare Services Growing SlowerKSRO

How More State Health Care Spending Can Lead to Worse HealthThe Fiscal Times

LOWN Institute releases report “California’s health paradox: Too much health care spending may lead to poor community health”State of Reform


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This project was supported by funding from Well Being Trust, a national foundation bringing together clinical, community, and policy innovators to advance the mental, social, and spiritual health of the nation.