Minn. health care costs are below average

Published 9:39 am Wednesday, August 28, 2013

MINNEAPOLIS  — Minnesota likes to think of itself as an innovator in health care with some of the lowest costs yet one of the healthiest populations in the country. And the state’s official health care economist says its efforts to put a lid on rising costs seem to be paying off.

Those moves include bipartisan legislation in 2008 under GOP Gov. Tim Pawlenty, additional initiatives under Democratic Gov. Mark Dayton that dovetail with the Obama administration’s health care overhaul, and new delivery strategies that have come from the state’s health care providers and insurers, said Stefan Gildemeister, director of the Health Economics Program at the Minnesota Department of Health.

Minnesota’s annual health care spending growth has been under 4 percent for several years and it’s been “very slow” since 2009, Gildemeister said. And while the final data won’t be available until next month, he said it looks like 2011 may have seen the lowest cost growth since the state began measuring it.

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Gildemeister said economists don’t know yet how much of that low growth is due to Minnesota’s initiatives and how much is from the economic slowdown. That might take another year or two so they can observe what happens as the economy improves, he said.

The 2008 legislation sought to improve community health, patient experiences and affordability. Gildemeister said a lot of that initiative was “going upstream” to address some of the causes of rising health care costs, such as reducing obesity by encouraging exercise and reducing tobacco use. Another is the expanded use of “health care homes,” a new approach involving tighter collaboration between primary care providers and patients with chronic or complex conditions.

A Dayton task force last year issued a “Roadmap to a Healthier Minnesota,” eight broad strategies aimed at getting Minnesotans healthier.

The report recommended that state-funded health care plans shift from the traditional fee-for-service payment systems, which experts say lead to overuse and waste, toward a “total cost of care” approach, in which insurers and providers get fixed payments for taking responsibility for the health care of a population of patients. The approach has been increasingly common for commercial health plans.

The 2013 legislative session focused on two other key recommendations: establishment of Minnesota’s health care exchange and expanding Medicaid to cover more poor Minnesotans. It’s up to policymakers to pick and choose from the other recommendations over the next few years.

Data from the Kaiser Family Foundation rank Minnesota’s per capita expenditures on health care and its average annual percentage growth in health spending as a little above the national averages. But Gildemeister said Kaiser’s growth figures cover a long time frame, 1991-2009. And he said Kaiser’s numbers are based on federal estimates. He said Minnesota’s own data is more precise, and that he’s confident it paints an accurate picture of a state that is below average.