Colorado’s Employee Health Plan Aims to Reform

If you are in Colorado and need treatment for cancer, for example, there are many hospitals and clinics that can provide it. But those places are not equal.

Some charge dramatically more, sometimes double, than others for the same service. Some have very high quality ratings, as scored by independent companies.

This volatility helps explain the quiet but significant changes to health insurance plans for some state employees that went into effect last month, signaling the Polis administration’s push for health care reform policies. increase.

For years, Gov. Jared Polis has touted the potential benefits of a health insurance model called the Purchasing Alliance for Employers and defended laws that backed such arrangements. In purchasing partnerships, employers try to have more control over how much money their employees spend on health care by acting as more cautious consumers.

Under the current system, employers rely on insurance companies to negotiate the price of medical insurance. Insurance companies do all the negotiations with hospitals and other health care providers before they tell your employer the costs. Under the Purchasing Alliance, employers band together to bargain themselves, with the goal of facilitating bargains that insurers may not seek.

The most famous example of a model in Colorado is the Peak Health Alliance, which serves people in eight highland counties. But other organizations have sprung up, such as one called the Colorado Purchasing Alliance.

Now the important part: As of last month, the state’s employee health plan partnered with the Colorado Purchasing Alliance to provide access to low prices and other healthcare shopping tools.

Doug Platt, spokesman for the Colorado Department of Human Resources, said: “That’s why we’re always looking for these innovative programs.”

The move is another example of how employers in Colorado are fed up with the high costs of paying for employee health insurance and are turning to innovative solutions to save money. . And, indeed, this is a small step into the world of alternative employer-sponsored health insurance models.

Only employees enrolled in the state’s Cigna plan have access to Alliance tools. About 19,000 people are covered by the Cigna plan, Pratt said. More than 11,000 of his other state employees and their families are covered by his Permanente Option to the State Kaiser.

Participation in the Alliance aspect of the plan is also voluntary. It works like this: If an employee needs to do something, say a colonoscopy, they can still go to their regular doctor and Cigna’s regular negotiations You can do it for a nominal fee. But the Alliance also provides access to something called the Healthcare Blue Book. This allows you to compare prices and quality ratings from a range of providers, including those with whom the Alliance has negotiated low-price deals.

When employees use Bluebook to select a low-cost provider, they receive a check in the mail, a substantial portion of the savings. Pratt said the goal is for the employee to receive her reimbursement within 90 days.

The state has high hopes for this experiment. But because the partnership is just beginning, Pratt said it’s too early to say how much it will help the state or its employees.

“As they learn about it and explore it, I hope they will take advantage of other ways to get quality health care,” he said.

State participation is a major milestone for the Colorado Purchasing Alliance, which began as an offshoot of the Colorado Business Group on Health. The latter is a group of employers scratching their heads trying to find ways to cut healthcare costs.

The alliance, like the Business Group of Health, is led by long-time healthcare executive Robert Smith, who has used his experience over the past few years to reflect on how to make the healthcare market work better. His vision: If we want to lower the price and improve the quality of healthcare, the responsibility lies with the people who pay for it. In Colorado, about half of the state is covered by employment-related medical insurance.

“You can’t blame hospitals and you can’t blame insurance companies if the market is dysfunctional,” says Smith. “It is the employer who writes the check.”

So far, Smith said, there are 12 employers who are members of the Colorado Purchasing Alliance, including some school districts and local governments. But state participation is huge. The large number of people covered gives the Alliance greater leverage in negotiations.

Smith also said the state’s willingness to join the alliance hopes to send a message to employers.

“It gives other employers courage,” he said. “It is my intention to make Colorado a role model for employer-based purchasing.”

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