Focus Area:
Sustainable Health Care Costs
Peterson-Milbank Program for Sustainable Health Care Costs

Successfully implementing a health care cost growth target involves a substantial commitment from states.

It requires significant stakeholder engagement to develop buy-in, a robust infrastructure operated with dedicated staff or contract resources for data collection and analysis to measure performance and identify cost growth drivers, and willingness to carry out enforcement measures as needed and take strong steps necessary to bend the cost growth curve.

Most importantly, it requires persistent and courageous public–private leadership, especially by state staff responsible for the program. High levels of cost growth have plagued the US health care system for decades, and strong institutional forces will oppose efforts to meaningfully constrain cost growth.

The experience of eight states that have implemented target programs shows that states can choose from a range of approaches. Smaller states like Connecticut and Rhode Island have implemented more streamlined programs and are slowly building the capacity and infrastructure to do more, while larger states such as Massachusetts and Oregon have invested significant resources and broadened the reach of their programs. California will soon make the largest investment any state has made in a cost growth program.

Regardless of the structure and level of investment, all these states have demonstrated how targets can be leveraged to shine a spotlight on the issue of cost growth and affordability, and to spur action around cost containment. In particular, the focus on transparency and having the data to pinpoint problematic areas has allowed states to elevate discussions around cost containment with broad stakeholder support.