Minnesota recently received a similar waiver, and several other states are exploring their own reinsurance programs.

Tackling Health Care Prices

Prices for health care services vary widely across the United States with little relation to quality. The price of an M.R.I., for example, is 12 times higher in the most expensive markets than in the least expensive ones, and can vary by a factor of nine even within the same area.

In 2011, the California Public Employees’ Retirement System (Calpers) changed how it paid for common procedures, a move that drastically reduced prices and saved the state millions. Before the initiative, prices for knee and hip replacements ranged from $15,000 to $100,000 with no difference in quality. That’s when Calpers introduced reference pricing — meaning it set an upper limit on how much it would pay for a given procedure, and patients would pay the rest.

For example, Calpers would pay up to $30,000 for knee or hip surgery at 41 acceptable-quality hospitals, defined by measures like infection and readmission rates. Patients could still go wherever they wanted, but would have to cover the additional cost of a high-priced hospital.

The results were impressive. Referrals to lower-priced hospitals increased by nearly 20 percent. The average price of the procedures dropped to about $26,000 from $35,000 — driven primarily by hospitals not initially included, and hoping to compete. There was no change in how well patients did or how much they paid out of pocket. California saved $5.5 million on knee and hip operations in the first two years. It also saved $7 million on colonoscopies, $1.3 million on cataract operations, and $2.3 million on arthroscopies. Prices fell by about 20 percent for each procedure.

Reducing Infant Mortality

The United States has one of the highest infant mortality rates among wealthy nations — and does worse than even many poorer countries like Cuba and Belarus. Mississippi’s infant mortality rate puts it on par with Botswana and Bahrain. The infant mortality rate in the U.S. is nearly three times higher than in Finland or Japan.

Georgia, which recently had one of the highest infant mortality rates in the country, has had perhaps the largest improvement in the past decade. The state has taken a three-pronged approach to the problem.