Four States, Four Ways to Manage and Measure Health Care Costs

August 28, 2018

Program:  Total Costs of Care

“You can’t manage what you can’t measure.”  – Peter Drucker.  States face growing challenges to manage and measure health care costs. By looking at the cost performance across all payers of the system as a whole, or a particular set of services such as hospital care, these states can advance more comprehensive strategies for delivery system reform. This month, we took a look at four states that are each tackling the issue in a different way. To learn about this program area of the Fund, go to Total Costs of Care.

Delaware Health Care Delivery and Cost Advisory Group Issues Report

In 2017, Delaware’s Department of Health and Social Services (DHSS) launched efforts to develop a state health care cost benchmark. The department organized several summit meetings featuring national experts and state health care leaders.  A report to the legislature summarizing the results was published in December.

Based on this work, Governor Carney established an advisory group to develop consensus on specific recommendations for total health care costs measures and the establishment of a health care spending benchmark, selection of quality measures and benchmarks, and analysis of variations in delivery and cost across the state.  The advisory group’s report was delivered to the Secretary of DHSS at the end of June 2018 and will serve as a basis for her final recommendations to the governor.

Why is this important? If the plan is approved, Delaware would become the second state (after Massachusetts) to formally establish comprehensive health care spending measures and a spending benchmark.

Massachusetts Center for Health Information and Analysis Provides Public Access to Health Care Price Data Set

Massachusetts Center for Health Information and Analysis (CHIA) is the focal point for health care information in Massachusetts including data on cost, access, and quality.  One of CHIA’s primary roles is to support the work of the Health Policy Commission, which establishes the state’s health care spending benchmark and monitors health care market changes. But its broader mission is to inform the public and health care stakeholders about health care trends.

Recently CHIA unveiled a new public website to provide consumers with information about health care costs.  CHIA also recently announced that it will provide access to the complete, detailed data set on health care prices used to build the consumer website. This data set will include payer-specific price data in the near future.

Why is this important? CHIA’s state-level health care price data set will be the most comprehensive and detailed public data asset of its kind in the country.

Vermont Green Mountain Care Board Report to Legislature on ACO Implementation with Continued Commitment to Primary Care

The Vermont Green Mountain Care Board  (GMCB) reports to the legislature regularly on its progress in implementing an all-payer accountable care organization (ACO) model, providing an updated roadmap for the policy and operational activities necessary to advance the model.  In March 2018, GMCB approved the ACO’s certification, allowing the ACO to collect payments from Medicaid and commercial payers as part of the all-payer model. In this report, GMCB also noted  that it approved the OneCare ACO 2018 budget parameters and payment model for 2018, and it is working on finalizing the 2019 budget requirements.

Why is this important? The approved ACO budget for 2018 requires continued enhanced primary care payments and in 2019 the budget reporting will include the ACO’s primary care spending amounts.

California Enacts New Law for Health Care Cost Reporting

Starting in 2018, California will proceed to develop a mandated health care cost reporting system as authorized recently by enacted legislation.  The Office of Statewide Health Planning and Development will convene a multi-stakeholder advisory group to address the major policy and operational issues including governance, sustainable funding, entities to report and the types of data to be reported, and privacy/confidentiality issues.  The system will be developed over a five-year period.

Why is this important? Once implemented, it will be the largest state all-payer claims database.