What Can Other States Teach Us About Keeping Health Care Affordable?

A big part of our work at OAHP is in advocating in favor of laws and regulations that can help contain health care costs and to oppose those that would drive costs up. This means spending a fair amount of time at the Statehouse, sharing information with Ohio lawmakers, and having conversations about bills on the floor and those under consideration.

But it’s also important to look beyond Ohio, to see what’s being proposed and enacted in other states. Often, we see good ideas that we think would benefit Ohioans. We recently shared three of those in an email to legislators. One deals with benchmarking and tracking health care costs and quality to create pressure for improvement; another reins in a questionable pricing practicing that is inflating costs; and one more calls for independent actuarial review of what proposed new health care mandates will cost — before they’re voted on.

Here are the basics about each of these health care laws:

Connecticut: Benchmarks for cost growth and quality plus primary care spending targets

• Amendments to the state budget passed in May 2022 require the state’s Office of Health Strategy to set annual benchmarks for the growth in health care spending and certain quality measures and to establish a target for primary care spending. The office also must publish annual reports on health care expenditures and whether payors and providers meet those benchmarks. CBIA, Connecticut’s largest business organization, supported the measures as “a commonsense way to expose the true cost-drivers in health, incentivize lowering costs across the board, and provide policymakers with data and analysis to craft public policy in the future to bring relief to small businesses.”
• The first annual report, released in March, showed that health care spending in Connecticut increased in 2021 by 6%, exceeding the state’s benchmark of 3.4%. The governor is using details from the report to support further legislation aimed at reducing health care costs.

Indiana: Blocking hospital facility fees for care rendered outside of hospitals

• Indiana’s “site of service” law addresses a growing trend of hospital systems acquiring outpatient facilities such as surgery centers, dialysis locations and clinics, and then charging hospital-level facility fees for services performed there. Hospital facility fees are naturally higher than those for independently owned outpatient facilities because of the intensive equipment and staffing hospitals must maintain for 24/7 care.
• Charging a similarly high fee for outpatient care, simply because the facility is owned by a hospital, isn’t justified by actual cost and serves only to drive up costs for employers who provide insurance for their employees.

Colorado: Actuarial review of proposed changes to health insurance mandates

• The bill, passed last year, requires the state Division of Insurance to contract with one or more entities to perform actuarial review of proposed legislation that would either impose new health benefit coverage mandates or eliminate existing coverage mandates. The contractors must have experience in actuarial reviews, health care policy and health equity. It allows for up to six such reviews per legislative session — three in the house and three in the senate. One minority-party member and two majority-party members in each chamber may request a review.
• Any request for review and the resulting report must remain confidential to all but the member who requested it until a bill is actually introduced or the legislative session ends. Whenever a report is produced and a bill is introduced, the state legislative services commission, in preparing a fiscal note for the bill, must note that the actuarial review was performed and must indicate how the actuarial report can be read in its entirety.

Health care spending has been close to 20% of U.S. gross domestic product in recent years, with a cost per person double (or more) that of other wealthy countries. And Ohio is one of the highest-spending states. Data form 2021 showed Ohio spending $27.6 billion on Medicaid — sixth highest among U.S. states.

Good public policy means lower costs and better health outcomes — things everybody in Ohio can get behind. OAHP will keep working to advance good ideas, wherever they might come from.