State agencies and the federal government can take administrative actions through various programs to curb rising health system costs. This section explores some of these innovative actions.
A cost-growth benchmark program is a cost-containment strategy that limits how much a state’s health care spending can grow each year. Massachusetts pioneered the policy initiative to bring total cost of health care growth closer in line with the state’s overall economic growth. A growing number of states are now exploring the strategy.
This chart provides an overview of states’ health care cost-growth benchmark programs.
This webinar, convened in partnership with the Milbank Memorial Fund for state officials only, explores the strategies and experiences of states that are implementing cost-growth benchmark policies. To view the recording, email Amanda Attiya.
Insurance rate review gives states the authority to examine proposed premium increases charged by health insurance companies that offer plans in a state. Rate review is used both to assure the financial viability of insurers and to ensure that companies have a legitimate reason to raise costs. For more than a decade, Rhode Island has used a unique insurance rate review approach to keep hospital costs from rising any more than inflation plus 1 percent through a set of “affordability standards” that insurers must meet to have rates approved. States are using affordability standards to oversee hospital costs and to require insurers to invest in a state’s health priorities, such as primary care.
This blog explores Rhode Island’s experience with insurance rate review as a hospital cost containment tool.
This blog explores how states can leverage their existing health market authority via insurance departments to slow cost growth and aim to ensure there is a level playing field between hospitals and insurers to drive fair negotiations for lower prices.
Hospital rate setting is a system in which a state agency establishes uniform rates for hospital services for multiple payers. Maryland’s Medicare waiver, instituted in 1977, made the state an all-payer state, meaning that all third-party payers must pay the same rate for the same services
Reference-based pricing to Medicare is a method of paying hospitals and other medical facilities based on a standard reference point, in this case, the amount paid by Medicare to the exact same hospital for the exact same services and supplies. Reference-based pricing aligns a hospital’s prices more closely with its costs, generating savings for states and patients money.
In this webinar, state health policy officials who are working to standardize prices paid to hospitals explore two state models to maintain access and keep spending in check.
This blog explores Washington’s experience with their public option, which utilizes reference-based pricing.
This blog describes Nevada’s public option law, which also utilizes reference-based pricing.