Analyses of Health Care Cost Drivers in New Mexico
Problem
New Mexico, like many states, continues to struggle with rising health care costs.
According to the U.S. Census Bureau, New Mexico has the highest rate of public insurance enrollment in the nation (51.2 percent). Because New Mexico’s population is covered by public insurance at such high rates, the state pays significant health care costs while health care facilities tend to have less of a budgetary cushion derived from higher payments through private insurers.
In 2023, New Mexico decided to conduct research into possible strategies for reducing costs without sacrificing quality and access.
Solution
NORC used mixed-methods research to recommend solutions to the state.
The New Mexico Legislative Health and Human Services Committee selected NORC to conduct two analyses to:
- Recommend methods for reducing administrative health care costs
- Assess the feasibility of implementing global budgeting in rural hospitals
NORC conducted literature reviews and more than 25 key informant interviews and analyzed hospital cost report data to develop recommendations.
To reduce health care administrative costs, we developed 11 recommendations within three categories:
- Consider legislation to enhance uniformity and consistency across payers
- Commission a special report on medical malpractice
- Develop a strategic plan for implementing a Health Strategy and Impact Council
Result
New Mexico is moving forward with several of NORC’s recommendations.
After extensive analysis, NORC assessed that global budgets likely do not currently suit New Mexico rural hospitals, as they would involve significant investments in operational change and increased state capacity. The team was able to bring rigorous research methods to resolve a state’s questions and provide actionable information as the state moves into its next legislative session. Several of NORC’s recommendations were added to the committee’s formal recommendations for the state legislature to take up in future legislative sessions.
Contact Information
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Project Leads
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Megan Stead
Senior Research Director IIProject Director -
Charles Betley
Senior Research ScientistGlobal Budgeting Project Manager/Lead -
Elizabeth McOsker
Senior Research DirectorAdministrative Costs Project Manager/Lead -
Scott Leitz
Vice PresidentProject Advisor -
Rebecca Shore Catterson
Principal Research DirectorTask Lead -
Alana D. Knudson
DirectorSubject Matter Expert
“State governments have a key role to play in implementing solutions to fight rising health care costs. With no shortage of options, it's important for any solution to represent a data-driven, evidence-based approach.”
