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States are increasingly turning to cost growth targets as a strategy for monitoring and slowing unsustainable health care cost growth. These states work with health insurers, providers, consumers, and other stakeholders to set annual targets for statewide health care cost growth to help ensure costs don’t rise faster than the economy, state revenues or wages. As they engage in this work, however, states must ensure that their efforts to slow cost growth do not exacerbate but instead address the deep and well-documented inequities in the health care system.
These inequities are reflected in persistent health disparities and elevated disease burden for certain populations. Inequities can occur across a broad range of dimensions, including age, disability status, gender identity, geography, income, insurance status, language, race and ethnicity, sexual orientation, and other social risk factors. Inequities often result in distorted health care spending (e.g., lower health care spending could be attributed to certain populations skipping needed care for a chronic condition due to cost or access challenges), and an imbalanced distribution of resources. They can also lead to unequal access to health care and disparities in quality of care.
There are various points in the cost growth target implementation process when states can consider or incorporate health equity so they can measure and address inequities. Approaches to considering equity during the design, analysis and reporting process are discussed below.
In addition to cost growth target programs, states can consider complementary policies to promote health equity, such as quality and health equity targets. States can use quality targets to motivate maintenance of or improvement in health care processes and outcomes alongside a cost growth target. To incorporate an equity lens into this policy, states can stratify performance using health equity data. They can then implement health equity targets that aim to reduce disparities in performance between two populations and/or improve performance for a specific subpopulation with known disparities.
Cost growth targets provide a more complete, system-wide perspective on health care costs. States, however, face a moral imperative to ensure that cost growth targets do not perpetuate or exacerbate the persistent known inequities in the health care system. These strategies present several ways for states to adopt a health equity lens in the development, assessment, and reporting of cost growth targets with the aim of making the health care system both more affordable and more equitable.
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