States reluctant to target hospital costs in employee health plans, new study finds

Hospital prices are cited most frequently by state plans as their top cost driver, but state negotiators are more likely to target other forms of health care spending when it comes to curbing costs, a new study found  (Source: “States don't want to tackle high hospital costs,” Axios, June 17)

According to a new study by Georgetown's Center on Health Insurance Reforms, state health plan administrators are “fully aware that hospital prices are the primary driver of the steady increase in the cost of employee health benefits. Yet they remain focused on secondary drivers such as excessive or inappropriate utilization.”

State employee health plans are often the largest employer purchasing insurance in their state, so in theory, should have significant clout when negotiating prices. But according to the report, plan administrators say it is hard to go after these prices because of a lack of competition between hospitals, hospitals' political clout and employee pressure to keep broad provider networks.