A Data Use Strategy for State Action to Address Health Care Cost Growth

Sustainable Health Care Costs Peterson-Milbank Program for Sustainable Health Care Costs


States with health care cost growth targets (or benchmarks) need to perform two types of analyses on data collected from payers and providers to identify factors driving health care spending levels and health care spending growth:

  1. Routine standardized analyses to inform, track, and monitor impact of the cost growth target, and
  2. In-depth, ad hoc analyses of the potential drivers of high cost, cost variation, and cost growth that are identified from the routine reports.

These two types of cost analyses are complementary: the regularly released reports draw attention to health care spending patterns that warrant further investigation via in-depth reports. The end goal is to use both types of analyses to identify and implement strategies to mitigate cost growth. Because the analyses are intended to inform and result in actions to address cost growth, we refer to the overarching strategy as a “data use strategy.”

A primary application of the data use strategy analyses is to inform each state about the specific factors contributing to  health care cost growth in their state.  The analyses could be of additional value if states with cost growth targets conduct them in the same way to facilitate valid comparisons across states. However, any differences in methods and data sources would need to be considered before these comparisons could be made.

This brief initially focuses on the design of the first category of analysis, which serves as a starting point for understanding health care spending patterns and trends. We present an analytic framework for these analyses, as well as a series of 11 recommended standard reports that apply the key framework dimensions. We also provide examples of more advanced analyses that we call “Phase 2,” which states may develop once they have mastered the standard reports. Stakeholder engagement and involvement of multiple state agencies in the design of the reports can help ensure that the analyses will be put to productive use.

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