A new Manatt and Robert Wood Johnson Foundation white paper details how healthcare systems can increase price transparency by using cost growth benchmarking models.
States can increase price transparency by using cost growth benchmarking models and developing strategies to contain costs, according to a white paper released by Manatt and Robert Wood Johnson Foundation Thursday morning.
States that have already enacted benchmarking models include Massachusetts, Delaware, Rhode Island, and Oregon. Since 2020, Connecticut, Washington, New Jersey, and Nevada have taken the initial steps to establish benchmarking programs in their states.
This trend comes as state governments and consumers have grown increasingly concerned over the rise in healthcare costs.
Each state that has implemented cost growth benchmarking models have employed a strategic angle when it comes to engaging stakeholders, which is an "essential ingredient" for program development and setting goals, according to the white paper.
Beyond the effort to improve healthcare cost transparency, states are also interested in investing in primary care, identifying trends in patient cost-sharing, and advancing alternative payment models.
Additionally, the white paper highlights five common features among cost growth benchmarking programs which include:
- Authority to collect and use data to monitor health system spending trends
- Growth target against which to measure spending trends
- Spending measurement to collect and track healthcare expenditures
- Data and analytic capacity to support data analysis, reporting, and use cases
- Data use strategy to advance state use cases
The report also indicated that standardization could benefit benchmarking programs in certain circumstances by supporting continued growth and creating coordination between states. Areas for the potential of standardization include:
- Creating model language for legislation and executive order text
- Creating instruction guides to detail how to set a cost growth target
- Creating a standard methodology for benchmark data collection
- Creating strategies to ensure data accuracy and completeness
- Utilizing detailed case studies to "inform practice"
- Creating interstate working groups to "shape practices and understanding of emerging issue"
The white paper concludes that while benchmark programs are not a cure-all, these initiatives can help states “identify cost drivers and make data-driven decisions with the full spectrum of stakeholders at the table."
"With eight states on board and others looking closely at cost growth benchmarking, these programs are destined to become a critical data resource for states seeking to understand healthcare cost growth trends and what can be done to contain costs and direct spending toward efficient and equitable investments," according to the white paper.
Melanie Blackman is a contributing editor for strategy, marketing, and human resources at HealthLeaders, an HCPro brand.