Health Cost Containment and Efficiences: NCSL Briefs for State Legislators

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Series Cover:  Health Cost Containment and EfficiencesA series examining options for containing or reducing health costs and improving efficiency in health care.

The cost of health and health care in the United States for years has been a highly visible topic of discussion for consumers, employers, state and federal policymakers and the media. 

Innovations and Experiments 
Policymakers, especially at the state level, have spent a good deal of time and energy considering—and sometimes passing—laws and budgets aimed at controlling or even cutting selected health expenditures.  In recent years, a variety of health policy innovations and experiments have been put into place to improve quality, control cost and expand coverage.  Many new approaches, already established in parts of the private, commercial market and in state and public sector programs, promise savings or improved affordability. 

Some health cost controls have medical consequences, some obvious and some unintended.  During budget crises, for example, health programs may reduce coverage, shift costs to enrollees or phase out programs for special populations. 

Successes and Potential
This series of briefs takes a fresh approach by describing a number of health cost containment and cost efficiency ideas. Emphasis is on documented and fiscally calculated results, along with results that affect budgets, coverage, quality, prevention and wellness.  Each brief describes 1) cost containment strategy and logic; 2) the target; 3) relation to the federal health reform law; 4) state and non-state examples; 5) evidence of effectiveness; 6) challenges and complementary approaches and 7) best sources for more information.  Where the results do not meet the hopes, these reports present an objective appraisal, saying, for example, “Limited evidence is available ... “ or “It is still too early to determine…”

The 10 briefs released as of August 2010 include:

1. Administrative Simplification in the Health System

2. Global Payments to Health Providers

3. Episode-of-Care Payments

4. Collecting Health Data: All-Payer Claims Databases

5. Accountable Care Organizations

6. Pay-for-Performance

7. All-Payer Health Provider Rates

8. Use of Generic Prescription Drugs and Brand Name Discounts

9. Negotiated, Volume and Evaluated Prescription Drug Purchasing

10. Pooling Public Employee Health Purchasing