A new analysis by UCLA Health suggests that US states can reduce the pace of healthcare spending growth when they adopt legally backed spending targets accompanied by enforcement measures. Between 2013 and 2019 five states implemented cost‑growth programmes, and in four of them annual spending growth fell by about 2 percentage points relative to the national average, the report found.
Design and accountability mattered
The report examined state health expenditure data from the Centers for Medicare & Medicaid Services covering 1 January 2010 to 31 December 2020. It focused on five early adopters of cost‑growth programmes: Massachusetts, Maryland, Vermont, Rhode Island and Delaware.
According to the authors, the difference between programmes that modestly slowed spending growth and those that did not largely came down to policy design and enforcement. The four states that achieved slower growth paired their spending targets with tools such as penalties for non‑compliance and constraints on hospital prices. In contrast, Delaware, which did not implement penalties to enforce limits, showed no change in healthcare spending growth.
“While the reductions we observed were modest, even small decreases in spending growth can translate into substantial savings over time,”
said Aleena Imran, a student in the David Geffen School of Medicine at UCLA, who led the study published in JAMA Network Open.
Co‑author Dr John N. Mafi, an associate professor‑in‑residence in general internal medicine and health services research, emphasised the importance of accountability: “The policy design really matters. The accountability structure determines whether they translate into meaningful spending changes.”
Which parts of care changed most
The analysis found that the largest reductions in spending growth were concentrated in hospitals and nursing homes. By contrast, spending growth for home health services increased, suggesting some services may shift rather than being eliminated.
- Successful elements: clear targets, public tracking and enforcement mechanisms (penalties, price constraints)
- Observed effects: reduced growth mainly in hospital and nursing home spending
- Possible shifts: increase in home health spending growth
| State | Programme outcome (2013–2019) |
|---|---|
| Massachusetts | Slower spending growth |
| Maryland | Slower spending growth |
| Vermont | Slower spending growth |
| Rhode Island | Slower spending growth |
| Delaware | No change (no penalty enforcement) |
The authors note that while spending still rose, it did so at a somewhat slower pace than nationally — roughly 2 percentage points less than the US average of 3.7% per year over the period analysed. They caution that the observed reductions were modest but could accumulate into substantial savings over time.
Implications for policymakers and patients
For policymakers, the study underlines the message that policy details matter. Targets without enforcement appear unlikely to change spending trajectories. The findings also suggest that slowing spending growth need not directly equate to broad cuts in services; rather, expenditures can shift between care settings.
For patients and households, slower spending growth at system level could translate into greater affordability over the long term, but the report does not examine direct effects on out‑of‑pocket costs, access to care or health outcomes. The authors recommend that states considering similar programmes combine transparent reporting with concrete accountability measures.
Those interested in the study should consult the original report in JAMA Network Open for full methods and limitations. For individual health concerns, always consult your healthcare provider or clinic rather than attempting to self‑diagnose or change treatment based on policy research.
