Cost Containment State Summaries
Below is a summary of the analysis of each of the six states specified in P.A. 11-58, with links to a detailed analysis of each state and the seven domains examined.
Massachusetts is characterized by government-supported and market based payment reform strategies, which are strengthened by the state’s strong commitment to transparency. The state regularly collects, analyzes, and publishes health care data to inform market participants – providers, plans, employers, and to some extent, consumers. The legislature has been influential in shaping health care policy, and several Governors have made health care reform a priority, each helping advance health reforms in the state.
Maryland has been setting FFS rates for hospital for all payers since 1974. The state’s new all-payer model establishes a total hospital per capita revenue growth ceiling tied to long-term projected per capita state economic growth, to help combat the volume incentive that was inherent in its FFS approach. Hospitals are also incentivized to reduce readmissions and partner with community-based providers to achieve long term population health improvements. The state’s agreement with CMS requires Maryland to expand the model to the full spectrum of services and providers within five years.
The Oregon Health Authority serves as the single agency responsible for the state’s health purchasing, health policy development, HIT infrastructure and analytic capabilities. With control of nearly 30 percent of Oregon’s health care spending, the agency is able to drive strategic change. This has included creation of 16 Coordinated Care Organizations responsible for all Medicaid care in a designated region and with expected savings of $4.9 billion over 10 years.
Since 2008, Rhode Island’s Office of the Health Insurance Commissioner (OHIC) has served as the key agency leading statewide cost containment initiatives and creating standards for insurer participation in the market. These standards encompass a broad range of state expectations and affordability priorities, including targets for both primary care spending and alternative payment methodology adoption by insurers, as well as caps on hospital rate increases, creation of ACO-oriented standards, and support for Rhode Island’s statewide information exchange.
Washington’s Health Care Authority (HCA) serves as the single state agency for health care services and is committed to the integration of Medicaid and state employee purchasing activities. The HCA sets expectations for nine regional Accountable Communities of Health to achieve statewide goals for population health improvement. HCA is aggressively managing the Medicaid program to align with its goal of moving 80 percent of state-financed and 50 percent commercial health care to outcomes based payment in five years.
Vermont is characterized by a collaborative environment where parties with different interests come together to try to forge agreement through compromise. The Green Mountain Care Board, an independent board appointed by the legislature, regulates insurance rates and hospital budgets via a linked process with $66 million in estimated savings. CMS recently approved Vermont’s All-Payer ACO Model to test an alternative payment model. The model commits to limits on annualized per capita health care expenditure growth for all payers.
Vermont Analytic framework