Cross-Agency Strategies to Curb Health Care Costs: Leveraging State Purchasing Power

Rising health care costs are an intractable problem in the United States, but states, faced with balanced budget requirements and growing voter concern, aren’t waiting for a federal solution.

This report explores state initiatives to curb health care costs by: 

  • Leveraging Medicare’s well-established reimbursement rates as reference prices for state employee plans to address rising health costs;
  • Harnessing collective buying power of state purchasers across agency and state lines to lower drug costs; and
  • Establishing state authority to limit hospital rate increases, promote cost transparency, and limit spending growth.

States are increasingly looking beyond individual agencies and programs to harness the significant potential of their collective buying power.

State dollars fund Medicaid, state employee health plans, health services in mental health and correctional facilities, and public hospitals, and coverage for university, municipal, and school employees. When acting together, state agencies exert considerable buying power in an increasingly consolidated health care system. This report highlights the new wave of state initiatives that leverage collective purchasing clout to lower the cost trajectory.

Read or download: Cross-Agency Strategies to Curb Health Care Costs: Leveraging State Purchasing Power