State Health System Performance and State Health Reform

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Abstract

Recent reports—including the state-by-state health spending reports from the Centers for Medicare and Medicaid Services, the health care quality report from the Agency for Healthcare Research and Quality, and the state scorecard on health system performance by the Commonwealth Fund Commission on a High Performance Health System—attest to the wide variation among states in insurance coverage as well as quality, cost, and other important dimensions of health system performance. The data also point out some interesting relationships: for example, personal health care costs do not appear to be linked to quality or mortality, but Medicare spending is closely linked to preventable hospitalization. These variations tell us that every state has room to improve—and, in fact, many states have devised innovative strategies to address problem areas.

With the inexorable rise in the costs of care, several states are seeking major gains in efficiency by raising the performance of the health care system as a whole. For instance, providing patients with access to a medical home has been shown to improve access to and coordination of care, leading to better health outcomes along with lower costs. Iowa has been able to reduce Medicaid spending by 3.8 percent over eight years by implementing and expanding a primary care case management program, which increased pharmaceutical expenses but lowered hospital and physician costs.

Other states have invested in electronic medical technology to improve outcomes, reduce errors, and improve efficiency. Still others—like Massachusetts, Minnesota, Washington, and Wisconsin—are using value-based purchasing to improve quality, reduce administrative cost, and provide financial incentives in state public employee benefits or Medicaid programs. These initiatives are allowing states to test-drive promising approaches, while serving as valuable learning laboratories for other states and the nation as a whole.

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