In this episode, Andréa Caballero of Catalyst for Payment Reform talks with Rachel Block—Program Officer at the Milbank Memorial Fund and longtime federal/state health policy leader—about cost growth targets: what they are, why they matter, and how states, employers, and consumers can use transparent data to bend the healthcare cost curve without harming access to care.
Key Insights
Cost Growth Targets, Demystified
Think of a cost growth target like a scale for healthcare spending: you set a benchmark and use standardized measures to track progress. It’s a simple frame for a complex problem—aligning healthcare spending with overall economic growth.
Transparency Is Necessary—but Not Sufficient
State programs create trusted, all-payer views of total spending trends. Transparency reveals what’s driving costs (like price variation), but without shared goals and commitments, visibility alone won’t change the trajectory.
What the Data Already Shows
Across participating states, prices for basic services are high and vary widely between providers. Consolidation and corporatization have weakened market forces, contributing to rising costs—even as we underinvest in essentials like primary care and behavioral health.
Eight States, One Momentum
From Massachusetts (the pioneer) to Delaware, California, and states in the Peterson-Milbank program (Rhode Island, Connecticut, New Jersey, Oregon, Washington), governors and cross-sector coalitions are using targets to put healthcare spending in context—and in check.
The Employer Data Gap
Self-insured employers often struggle to access or control their own claims data held by TPAs or carriers. That missing data also keeps states from seeing the full picture, limiting benchmarking and actionable insights for the commercial market.
Protecting Rural & Safety-Net Providers
Rural and safety-net organizations face unique pressures from consolidation and rising benefit costs. Thoughtful program design—value-based payments, targeted carve-outs, or exemptions—can avoid unintended harm while channeling savings to priority areas like primary and behavioral care.
A Practical Role for Purchasers
Employers can advocate for (and participate in) state efforts, contribute de-identified data, and use benchmarks to negotiate fairer prices—advancing affordability while meeting fiduciary duties to plan members.
“No one feels the impact of rising healthcare costs more than employers—other than the consumers themselves.”