State benchmarking programs can drive investments in primary care, Manatt report finds

State cost growth benchmarking programs can leverage data collection to advance preventive services like primary and behavioral healthcare.

So argues the latest Manatt state cost containment update, now in its third iteration. States are increasingly interested in curbing cost growth and redirecting the way dollars are spent to services that support long-term population health, the report said.

“Communities with greater primary care availability have reported better patient outcomes as well as decreased utilization of more costly health service categories, such as inpatient hospitalizations and emergency department visits,” the report noted.

One way of prioritizing this is through benchmarking programs, which measure spending and redirect dollars to higher-value services. 

A few have historically recognized the value of investing in these areas, such as Rhode Island and Delaware, using insurance regulatory authorities. Others, like Connecticut and Massachusetts, are determining how to leverage their benchmarking programs to this end. As of May 2022, seven states have a benchmarking program in place, and two others are either developing them or considering doing so. 

Stakeholders can look to the New England States Consortium Systems Organization (NESCO), which developed a way to calculate primary care spending as a portion of total medical spending across six states. It found that the all-state average of primary care spend was up to 8% of total spend, highest for the Medicaid population, according to the report. These programs are based on established targets, the violations of which may subject payers and providers to public inquiry or penalty.

Connecticut is developing a primary care spending target to eventually reach 10% by 2025, according to the report. The state’s Office of Health Strategy will collect primary care spending data from payers later this year. Similarly, Massachusetts is creating a target with a goal of increasing spending by 30% over three years on primary and behavioral healthcare. It is estimated to generate $1.4 billion. Payer and provider progress will be monitored and those failing to achieve the target may be required to complete a performance improvement plan.