State Spending Growth Benchmarks and Hospital Revenue, Hospital Prices, and Premiums

Since 2013, 9 states have implemented health care spending growth benchmarks. States track performance against these benchmarks, and some states can penalize noncompliance. While subsequent growth has frequently exceeded the benchmark, the approach could slow growth relative to what would have happened without benchmark implementation.

To assess the association between spending growth benchmarks and spending outcomes.

This population-based case-control study used event study models that compare hospitals and counties in states with benchmarks with entropy-balanced comparators in nonimplementing states from January 1, 2015, to December 31, 2025.

Implementation of state spending growth benchmarks in Vermont (2018), Delaware (2019), Rhode Island (2019), Connecticut (2021), Oregon (2021), Washington (2022), New Jersey (2023), and California (2025). Massachusetts (2013) was excluded.

Outcomes of interest included hospital inpatient net revenue per discharge and outpatient net revenue per discharge equivalent from the Centers for Medicare & Medicaid Services Health Care Cost Report Information System, mean county-level inpatient and outpatient standardized prices from the RAND Hospital Price Transparency data, and county-level individual and small group market single bronze premiums from the Center for Consumer Information and Insurance Oversight.

A total of 298 hospitals and 184 counties in 8 states that implemented benchmarks and 4515 hospitals and 2924 counties in nonimplementing states were included, yielding a final sample of 4813 hospitals and 3108 counties. On average, no statistically significant changes from preimplementation to postimplementation relative to comparators were found for hospital inpatient revenue (-$839 [95% CI, -$4276 to $1874]), hospital outpatient revenue ($439 [95% CI, -$1207 to $2126]), inpatient prices (-$3 [95% CI, -$2290 to $2417]), outpatient prices ($11 [95% CI, -$12 to $34]), individual market premiums ($8 [95% CI, -$8 to $26]), or small group premiums ($11 [95% CI, -$3 to $25]). State-specific findings were similar, except for Rhode Island, for which benchmarks were associated with a statistically significant $55 (95% CI, -$88 to -$20) reduction in outpatient prices.

In this case-control study of hospital revenue, hospital prices, and premiums, scant evidence suggested that spending growth benchmarks were associated with reductions in the outcomes of interest. States may need to pair benchmarks with more rigorous enforcement or additional policies to meaningfully influence health care spending.