These plans operate at scale. They choose carriers, set benefits and contract with vendors. In many states, they are among the largest purchasers of commercial health care, so cost growth compounds quickly. That purchasing power can also be used to push for better results and more predictable spending.
Costs are rising for a few clear reasons: wide variation in provider prices and performance as well as increasing unit costs, pharmacy trend driven by the rapid growth in GLP 1 and specialty drug use, and high spending among a small number of members with complex needs. In these areas, poor coordination and lack of vendor accountability can drive costly utilization (ER visits, hospital stays) and fragmentation.
Many of the challenges for state employee health plans mirror those facing large employers in the commercial market. Morgan Health works to improve the quality, affordability and equity of employer-sponsored health care, creating unique opportunities to share lessons across sectors and accelerate the adoption of strategies that deliver better value.
Because state and municipal health plan decisions often include non-health care experts as part of the budget process, the State & Municipal Health Care Purchasing Playbook focuses on practical steps: optimize high value networks, proactively manage drug spend, and guide employees toward appropriate care.
The goal is stable coverage for the workforce and a budget path taxpayers can sustain.
