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States and Other Employers Have the Power to Decrease Medical Costs

If you are an employer, policymaker, or patient who’s frustrated by rising healthcare costs because of the negative impact on your bottom line, the lack of healthcare affordability in your state, or unsustainable medical debt, you’re not alone. In 2018, the United States spent $3.65 trillion on healthcare, representing $11,212 per person.

According to a recent Axios article, private-sector employers account for 20% of all healthcare spending—nearly $700 billion in 2017and are “one of the biggest and most politically powerful stakeholder groups in the healthcare debate.” With healthcare coverage costs expected to rise to $2 trillion by 2040, employers are realizing their power in the quest to drive down healthcare costs.

For example, since 2017, Walmart has provided its employees with a center of excellence (COE) for spine surgery that includes Geisinger Health System (Geisinger). For employees and enrolled members who need spine care, Walmart pays for the entire cost of travel and treatment at Geisinger. From 2015 to 2018, ~2,300 employees (around half of the employees who underwent spine surgery/evaluation without surgery) utilized a COE.

Not to be left out, state governments—frequently the largest employer in each state—are adopting best practices from private-sector employers to improve healthcare transparency for their employees. In July 2018, the State of Nevada implemented Healthcare Bluebook’s (Bluebook’s) healthcare price and quality transparency solution. Just as the state’s employees are rewarded for choosing affordable care, the state is rewarded for steering its employees to, high-quality, cost-effective providers. The State of Florida followed suit, implementing Bluebook’s solution in January 2019 to power the State of Florida’s Shared Savings Program, which rewards members when they shop for and select cost-effective, high-quality providers for both inpatient and outpatient services.

On a legislative front, states are also investigating transparency and shared savings programs to combat high healthcare costs for their constituents.

  • North Carolina not only passed a law that requires hospitals and ambulatory surgical facilities to disclose the prices for the top outpatient surgical procedures and imaging procedures, but the state also created a public site for its residents to search for costs by facility/procedure.
  • In February 2019, Tennessee passed the Right to Shop Act, which requires the state employee plan to evaluate transparency and shared savings programs that reward members when they shop for care.
  • And, Georgia’s Lieutenant Governor created the Task Force on Healthcare Access and Cost to explore ways to decrease healthcare costs and improve access to care. Bluebook’s co-founder, Bill Kampine, was invited to testify at a recent task force event. During his presentation, Kampine shared an analysis of hip replacement prices in Georgia and emphasized the importance of states having access to their healthcare data. In response to Kampine’s analysis, the Lieutenant Governor said, “To me, we’re three sessions into this, we’re multiple, multiple hours. This has, in my opinion, the chance of being the most impactful slide that I remember.”

Most states and municipalities don’t realize that they could decrease their healthcare spend by up to 50% by steering their employees to lower-cost providers. Analyzing commercial claims and the largest national, independent CMS discharge claims dataset for thousands of procedures, Bluebook is not only able to measure healthcare costs and quality for the most shoppable procedures, but also works with states and municipalities to optimize their networks by developing engagement and incentive plans to help their employees navigate to the highest-value care. To learn more about how Bluebook empowers state and municipal employers, contact Bluebook today.

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