Investor Presentaiton
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HIC began analyzing health care spending growth in 2020 after the Rhode
Island Cost Trends Steering Committee established a voluntary compact in 2018
to restrain the growth in per capita spending on health care to no more than
the level of projected state economic growth. For 2019 to 2022 the state set an annual
health care cost growth target of 3.2 percent, equivalent to the long-term forecasted
growth in Rhode Island's Potential Gross State Product (PGSP). This chapter examines
2021 state and insurance market performance against the cost growth target. It also
examines 2021 health care spending patterns based on OHIC's annual Cost Trends
data collection.
Statewide Spending and Spending Growth
OHIC assesses statewide health care spending growth against the cost growth
target by calculating the annual change in Total Health Care Expenditures (THCE)
for covered residents. THCE represents health care expenditures for Rhode Island
residents who received coverage from commercial insurance (including employers
that self-fund), Medicaid, and Medicare. It includes all categories of claims and non-
claims payments to providers for covered services² delivered to insured individuals
(also referred to as Total Medical Expense, or TME), and the cost of administering
private health insurance (referenced as the Net Cost of Private Health Insurance, or
NCPHI). OHIC measures THCE using aggregate data submitted by insurers in the state,
as well as state and federal government data.
COVID-19 restrictions
caused an abrupt
reduction in the use of
in-person health care,
which led to a sharp
drop in per capita
spending in 2020.
Utilization rebounded
in 2021, although not
to pre-pandemic levels,
resulting in a 3.2 percent
growth in THCE, which
was equal to the target.
Exhibit 2.1: Statewide Performance Against the Cost Growth Target, 2019-2021
5.0%
2.5%
0.0%
-2.5%
-5.0%
4.1%
2019
-2.9%
2020
3.2%
- Target 3.2%
2021
Source: OHIC analysis of TME data from insurers, the Centers for Medicare & Medicaid Services (CMS), and the Rhode Island Executive Office of Health and
Human Services (EOHHS).
1 For details on the data collection and analysis methodology, see OHIC, Rhode Island Health Care Cost Growth Target and Primary Care Spend Obligation Implementation Manual, August 26,
2022, https://ohic.ri.gov/sites/g/files/xkgbur736/files/2022-08/RI%20Implementation%20Manual_CY%202020%20-%20CY2021_final%20v8.1.pdf.
2 Some non-claims payments are not for covered services but are for incentives or infrastructure payments intended to support care delivery (e.g., electronic health record infrastructure
payments and other data analytics payments).
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Annual Report: Health Care Spending and Quality in Rhode IslandView entire presentation