States. They’re just as perplexed as the rest of us over the ever-rising cost of health care premiums.
Now some states — including Montana, North Carolina and Oregon — are moving to control costs of state employee health plans. Their strategy: Use Medicare reimbursement rates to recalibrate how they pay hospitals. If the gamble pays off, more private-sector employers could start doing the same thing.
“Government workers will get it first, then everyone else will see the savings and demand it,” says Glenn Melnick, a hospital finance expert and professor at the University of Southern California. “This is the camel’s nose. It will just grow and grow.”