Providers are the most powerful drivers in the Sacramento healthcare market, where health systems are highly consolidated and operate tightly integrated networks of physicians. However, the rapid spread of COVID-19 is threatening health systems and physicians with new financial challenges. One powerful system, Sutter Health, is also under fire from the state and has been forced to change the way it contracts with insurers, which could level the playing field for rival systems. In the public sector, proposed Medicaid reforms raise questions about whether Medi-Cal managed care plans are ready to become newly responsible for a broad array of services that local governments typically provide. Medi-Cal will also begin moving toward a full drug carve out by 2021, meaning manufacturers will be forced to negotiate with the state in lieu of Sacramento’s individual Medicaid health plans.