Interested in getting a cross-state look at how government leaders are tackling the challenge of rising healthcare costs and outdated modes of delivery? A new report from theMilbank Memorial Fund — “State Models for Health Care Cost Measurement: A Policy and Operational Framework” — offers
a view of such efforts across four states. The report examines how government-led “policy pioneers” from Maryland, Massachusetts, Oregon, and Vermont are identifying and addressing healthcare costs as one of the key reform drivers of improving the quality of their communities’ health and healthcare systems across all payers and populations.

The report details how each of these states is using policy levers to set sustainable levels of cost growth by developing comprehensive, statewide strategies related to the measurement of the “total cost of care” (TCOC). The report notes that two primary strategies are being leveraged by their efforts: (1) payment reforms aligned with TCOC measures and (2) performance transparency reporting that include TCOC measures. A number of other complementary goals are also discussed, including using strategies to reduce cost shifting among payers and price variation among providers.

Also addressed: the governance and authority challenges (e.g., legal or legislative difficulties) and key policy and operational activities (e.g., definitions of scope, methodologies, applications, and data sources) that they have had to handle in order to implement TCOC measures effectively. Although each of the states has fine-tuned their TCOC strategies to target their varying reform goals, the report notes that all have faced similar legislative and operational issues throughout their implementation phases.

After briefly highlighting some future policy considerations that could help these “policy pioneers” achieve their ultimate TCOC goals, the Milbank concludes its report by extending it as a kind of framework for other states interested in building the operational and technical capabilities to implement total cost of care as part of their reform efforts.