State Employee Health Plans Can Lead Value-based Initiatives

Lessons and best practices can be adopted by commercial payers and purchasers

With a large market share, a statewide pool of enrollees, and long-term relationships with employees and retirees—state employee health plans have a unique ability to address rising costs through new payment and delivery reforms, according to a new report prepared by experts at the Duke-Margolis Center for Health Policy with funding from the Robert Wood Johnson Foundation. Plans in 18 states cover more than 10 percent of their state’s privately insured population, and all states are well-positioned to carry out new initiatives. States are implementing a variety of new payment reforms, incentivizing use of high-value insurance plans, and taking leadership roles in state-wide stakeholder health collaboratives.

“Options such as bundled payments, limited and tiered networks, accountable care organizations, patient-centered medical homes, reference pricing, contracts for primary care and coordination across agencies have all been implemented successfully by state employee health plans,” said Robert Saunders, PhD, who led the research team.

The team provides guidance about which techniques have been used successfully and identifies factors affecting implementation. The breadth of initiatives shows that regardless of a state employee health plan’s priorities, administrators can find and develop the best initiative to meet their needs and collaborate with large payers and purchasers to achieve broader health system change.