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Healthcare spending is growing at an unsustainable rate. The rising costs force patients, employers, and government payers to shuffle funds from other priorities, replacing other consumer spending, reducing wage increases, and crowding out other government spending. Without greater transparency and competition, prices will only continue to grow. This will fuel calls for expanded government involvement and control in the sector—threatening patient access and innovation. And the resulting increases in government spending will necessitate significant tax hikes, further burdening the consumer.


Healthcare is unlike any other market, but it should not lack the hallmarks of a functioning market. There are meaningful steps we can take to create a more functional healthcare ecosystem. This includes providing patients access to pricing and quality information so they can make consumer driven decisions. Incentives must be reconfigured to make such information usable and useful. Providers and payers must be rewarded financially for improving outcomes and increasing efficiency. Clinical and non-clinical resources should be better coordinated to maximize return on investment and allow value-based or at-risk providers to provide whole-person care.


States can foster an innovative ecosystem with re-aligned incentives to slow the growth in costs, ensure access to doctors, and open the door to innovation that harnesses technology to improve patient wellbeing.



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Reference-Based Pricing For State Employee Healthcare

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