Monitoring MN Health Care Spending & Affordability

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The Health Economics Program (HEP) at the Minnesota Department of Health (MDH) requests proposals to review and certify total health care spending estimates and develop 10-year projections for health care spending on behalf of Minnesota residents. Responders to this Request for Proposal (RFP) are encouraged to propose additional tasks or activities that may assist MDH and Minnesota policymakers to more thoroughly understand health care spending trends, including equity considerations, and inform initiatives aimed at strengthening health care affordability. These additional proposals must be separated from the required items on the Cost Proposal, within the separate section in the Cost Proposal, and will not be scored as part of the evaluation project. These additional tasks or activities should be provided on separate pages from the required tasks in Section 4.

1)        Background
Minnesota policymakers have had a long-standing interest in monitoring state health care spending to understand the underlying drivers of spending growth and to identify strategies to affect its trajectory. To advance this work, MDH has estimated total health care spending for Minnesota residents since 1993.
Since 2008, when major health care legislation was passed in Minnesota to work towards achieving quality, affordable and accessible health care for all Minnesotans, MDH has created projections of health care spending and had the annual health care spending estimates be certified by an independent actuarial consultant. The projections serve to inform policymakers’ considerations on health care spending absent policy changes and as a baseline for transformational change.
The methodology used to estimate historical health care spending and future projections relies on methods developed by the Centers for Medicare and Medicaid Services (CMS) for the National Health Expenditure Accounts (NHEA), with adjustments to account for Minnesota-specific programs, Minnesota’s policy environment and population. MDH’s health care spending estimates rely on multiple data sources, including data collected by MDH, CMS, the Minnesota Department of Human Services (DHS), and other public and not public data. MDH constructs spending estimates for public and private payers overall, as well as by 11 main categories of spending (e.g., inpatient hospital, outpatient hospital, retail prescription drugs, etc.).

Both historical estimates and spending projections are updated annually and are used by a variety of stakeholders (e.g., purchasers of health care services, researchers, providers, and policymakers) to inform health reforms and/or policy proposals; establish business strategy; conduct planning related to workforce and budgets; and benefit considerations, among others. Over time, MDH has also conducted analyses of cost drivers for commercial spending, variation of transaction prices in Minnesota’s health care market, and chronic disease-related spending and trends.

2)        Procurement Goals
For this Request for Proposal, MDH is seeking respondents who have demonstrated expertise in supporting and reviewing state health policy research related to health care spending and cost growth. To continue this important work, MDH is seeking bids from respondents who can perform two primary duties:
a)        Extend and, as necessary, refine Minnesota’s rolling 10-year projections for health care spending beginning with calendar years 2024 and 2025, developed by the awarded respondent in the spring/summer of 2025 and 2026.
b)        Review and provide an independent actuarial certification of total health care spending estimates (based on the most recent calendar year); this annual work would be completed by the awarded respondent each fall/winter.

3)        Additional Information
MDH and HEP value transparency and have a preference to use Minnesota data for this work. To the greatest extent possible, all methodologies and specifications used in this work are included in published materials. Therefore, the selected respondent performing this work should limit the reliance on proprietary data and methods. The respondent should review these methodologies and specifications prior to submitting a proposal to ensure the respondent understands the expectations of this work and does not propose reliance on proprietary data and methods.
Previously published reports, data visualizations, and chartbooks on health care spending for Minnesota residents are available on the MDH Health Economics Program website (https://www.health.state.mn.us/data/economics/index.html); several examples are below:
¿        Key Trends for Minnesota Health Care Spending in 2021 [PDF]; https://www.health.state.mn.us/data/economics/docs/spendingkeytrends.pdf
¿        Infographic: Minnesota Health Care Spending in 2021 [PDF]; https://www.health.state.mn.us/data/economics/docs/spendinggraphic.pdf
¿        Data Short Take: Minnesota Health Care Spending Trends, 2017-2021 [PDF]; https://www.health.state.mn.us/data/economics/docs/shorttakespending.pdf
¿        Supplemental Information: Historical Health Care Spending Estimate Methodology [PDF]; https://www.health.state.mn.us/data/economics/docs/spendingestimate21.pdf
¿        Minnesota Health Care Spending Projections, 2022 to 2031: Key Trends [PDF]; https://www.health.state.mn.us/data/economics/docs/projectedkeytrends.pdf
¿        Supplemental Information: Health Care Spending Projections Methodology 2022-2031 [PDF]; https://www.health.state.mn.us/data/economics/docs/spendingprojected21.pdf
¿        Minnesota Health Care Markets Chartbook 1: Minnesota Health Care Spending and Cost Drivers [PDF]; https://www.health.state.mn.us/data/economics/chartbook/docs/section1.pdf
¿        Minnesota Health Care Markets Chartbook 2: Trends and Variation in Health Insurance Coverage [PDF]; https://www.health.state.mn.us/data/economics/chartbook/docs/section2.pdf
¿        Minnesota Health Care Markets Chartbook 5: Public Health Insurance Programs [PDF]; https://www.health.state.mn.us/data/economics/chartbook/docs/section5.pdf
¿        Health Care Spending, Price, and Use in Minnesota: 2017 to 2021 [PDF]; https://www.health.state.mn.us/data/economics/docs/spendingrpt2017to2021.pdf

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