This is especially concerning for states because unlike the federal government, states have to balance their budget which means higher spending on healthcare equals lower spending on education and other essential services.
States can also help lower prices through pro-competitive behaviors such as limiting consolidation of providers or providing funding for new developers into the healthcare space.
In order to reduce healthcare spending, states must identify the components of spending that can change or improve. One way to lower costs could be to reduce use of catastrophic coverage plans because high bills that are likely to be produced by these plans often go unpaid by the insured, resulting in a write-off for the provider which reduces the tax revenue for the state. States can also help lower prices through pro-competitive behaviors such as limiting consolidation of providers or providing funding for new developers into the healthcare space.
Several approaches beyond the pro-competitive strategies can be used as well. Requiring providers to publicly justify high prices or be identified as high-price providers could shame providers into restraining their prices. This method could be especially useful if providers are required to share their patient care data as well as feedback from patients regarding their care so that providers that provide excellent service are not reducing their quality of care just to get off the list of expensive providers. It takes the village to reduce the cost of healthcare and improve outcomes, and it starts with better data to inform planning.
