South Dakota state law currently caps increases in state funding for K-12 education at 3% or the annual percentage change in the consumer price index, whichever is lower. (House Bill 1003 would amend that law to set a minimum annual increase of 2%.)
So if the state can cap increased funding for a vital public service like education at the going rate of inflation, could the state cap cost increases in another vital public service? That's what Maryland is doing with health care:
...[T]he state took another big step forward on Friday with the announcement that the federal government will allow the state to tie increases in hospital spending to economic growth—a bold challenge for a sector of the economy that has typically far outpaced the broader economy.
After a decade in which hospital spending in Maryland grew twice as fast as the state’s economy, Maryland will hold all of its hospitals to a growth rate of 3.58 percent, the state’s per-capita rate of economic growth. The state is also required to capture $330 million in Medicare savings over a five-year test period, reduce hospital readmissions, prevent hospital infections and file annual reports on population-health benchmarks. The new agreement with the Centers for Medicare and Medicaid Services upends the practice of paying doctors for each individual transaction, instead transitioning to “global payments,” which offer bulk sums for an entire population and encourage providers to reduce unneeded procedures and improve care to hold onto as much of the money as possible [Chris Kardish, "Maryland Becomes First State to Cap Hospital Spending," Governing, 2014.01.10].
If South Dakota can expect schools to run on a funding increases tied to economic factors, we should be able to impose the same expectations on hospitals, right?