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. 2019 Feb;38(2):237-245.
doi: 10.1377/hlthaff.2018.05164.

Health Care Spending Slowed After Rhode Island Applied Affordability Standards To Commercial Insurers

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Health Care Spending Slowed After Rhode Island Applied Affordability Standards To Commercial Insurers

Aaron Baum et al. Health Aff (Millwood). .
Free PMC article

Abstract

States are introducing regulations to slow health care spending growth, but which of these successfully reduce spending growth remains unclear. We studied Rhode Island's 2010 affordability standards, which imposed price controls-particularly inflation caps and diagnosis-based payments-on contracts between commercial insurers and hospitals and clinics and required commercial insurers to increase their spending on primary care and care coordination services. Using a difference-in-differences design, we compared spending among 38,001 commercially insured adults in Rhode Island to that among 38,001 matched adults in other states in the period 2007-16. Relative to quarterly fee-for-service (FFS) spending among the control group, quarterly FFS spending among the Rhode Island group decreased by $76 per enrollee after implementation of the policy, or a decline of 8.1 percent from 2009 spending. Quarterly non-FFS primary care coordination spending increased by $21 per enrollee. Total spending growth decreased, driven by lower prices concordant with the adoption of price controls. Quality measures were unaffected or improved. The Rhode Island experience indicates that states may be able to slow total commercial health care spending growth through price controls while maintaining quality.

Figures

Exhibit 2
Exhibit 2
(Figure) Quarterly Fee-for-Service Spending in the Rhode Island Cohort and the Control Group Cohort Source [Authors’ analysis of study data] Notes [All values are quarterly per enrollee after adjustment to a standardized 90-day quarter. Dollars were inflation-adjusted to 2015 dollars. The vertical dashed line in 2009 indicates the last pre-policy year before the 2010 Affordability Standards implementation.]

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