By Ralph Lindeman
Jan. 8 -- Actions taken at the
state level may be the most effective over the long term in helping to rein in
rising health-care costs because of the variety of policy tools available to
governors and state legislatures, according to a report released Jan. 8 by a panel of national health-care
State officials have significant control over spending in
Medicaid and the Children's Health Insurance Program, insurance regulation,
provider rates and medical malpractice laws, making states ideal laboratories
to try new ways to deliver and pay for health care, said the 116-page report,
“Cracking the Code on Health Care Costs.”
The report was released by the
State Health Care Cost Containment Commission, a 12-member panel created in
January 2013 by the Miller Center, a public policy organization at the
University of Virginia.
The panel co-chairs are Michael Leavitt, a
former secretary of health and human services in the George W. Bush
administration and a former Republican governor of Utah, and Bill Ritter Jr., a
former Democratic governor of Colorado.
The report follows news that
health-care spending rose by just 3.7 percent in 2012, the fourth consecutive
year of slow growth, according to Jan. 6 findings by the Centers for Medicare
& Medicaid Services (see related story).
“While the rate of
increase in the cost of health care has slowed over the last few years, it has
still hit the tipping point and it is having a huge impact on consumer
budgets,” said Gerald Baliles, the Miller Center's director and chief executive
officer and a former Democratic governor of Virginia, who spoke at a press
conference to announce the report.
The report outlined structural problems in the U.S.
health-care system that it said result in the nation spending more than twice
as much on health care than any other industrialized country.
problems include high costs for physicians, facilities and drugs, as well as
fragmented care among providers, a fee-for-service payment system that
encourages wasteful and unnecessary procedures and high administrative
At the same time, despite the increased spending, the U.S. ranks
lower than other advanced countries in several measures of health-care quality,
including life expectancy, infant mortality, obesity, diabetes and heart
disease, according to the report.
The report, which is “based on
conditions as they exist with the Affordable Care Act,” is intended to spark
discussions in state legislatures, as many begin new sessions early this year,
Leavitt said at the press conference.
Commission member Andrew Dreyfus,
president and CEO of Blue Cross Blue Shield of Massachusetts, added that the
state-focused report may be even more relevant because “some of the national
standardization anticipated in the Affordable Care Act has not occurred.” For
example, only about half the states are participating in a major expansion of
Medicaid that began in 2014 under the ACA.
Specific recommendations in the report include:
Use existing state health-care spending programs to accelerate the trend
toward coordinated, risk-based care.States should establish standards for
managing costs and promoting quality care and then apply them to state health
spending programs, including Medicaid, state employee health plans and plans
offered on state health insurance exchanges;
Change state laws and regulations governing insurance, scope of medical
practice and medical malpractice. States should review these policies to
ensure they promote cost efficiency and expand the availability of risk-based,
Help promote population health and personal responsibility in health
care. States can educate consumers and state employees to encourage them to
maintain healthy diets and lifestyles; and
Define and collect data to create a profile of health-care spending in the
state. States should identify quality-tracking measures, create process for
collecting cost and quality data and conduct an annual analysis of where
health-care spending is concentrated and outside national averages.
“The strategies proposed in this report largely rely on
transparency, purchasing power, payer and provider cooperation, persuasion and
'soft' regulatory pressure to spur the transition to more efficient, quality
care,” the report said.
“Over time, however, the state may need to
consider additional corrective action for some high-cost outliers,” it said.
“States have many levers at their disposal to encourage compliance with state
To contact the reporter on this story: Ralph
Lindeman in Washington firstname.lastname@example.org
To contact the editor
responsible for this story: JoAnn Goslin at email@example.com
The report is available
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