If you’re in Colorado and need treatment for, say, cancer, there are dozens of hospitals and clinics that can provide it. But these places are not equal.
Some charge considerably more than others – sometimes twice as much – for the same service. Some have significantly higher quality ratings, as rated by independent companies.
This variability helps explain a quiet and significant change to the health insurance plan covering some state employees that went into effect last month — a change that shows how the Polis administration is advancing its healthcare reform policies. health in a way that doesn’t always make the headlines.
For years, Gov. Jared Polis has touted the potential benefits of a health insurance model for employers called a purchasing alliance and championed legislation that gives such arrangements a boost. In a purchasing alliance, employers seek to better control their employees’ healthcare expenditures by acting as more vigilant consumers.
Under today’s typical system, employers outsource the work of negotiating health care prices to insurance companies. Insurers do all the haggling with hospitals and other providers, then tell employers what it’s going to cost. In a buying alliance, employers come together to negotiate on their own, with the goal of doing business that insurance companies may not be motivated to seek.
The best-known example of the model in Colorado is the Peak Health Alliance, which covers residents of eight high country counties. But others have also sprung up, including one called the Colorado Purchasing Alliance.
Now the important part: Since last month, the State Employees Health Plan has partnered with the Colorado Purchasing Alliance to provide access to lower prices and other healthcare purchasing tools. health.
“We are constantly looking for ways to be as efficient as possible with taxpayer dollars and our members, employee dollars,” said Doug Platt, spokesman for the Colorado Department of Personnel and Administration. “So we are constantly on the lookout for these innovative programs.”
The move is another example of how Colorado employers, tired of the high cost of health care coverage for their employees, are turning to innovative solutions to save money. And, of course, this is a small step into the world of alternative employer-sponsored health insurance models.
Only employees enrolled in state Cigna plans have access to the alliance tools. About 19,000 people are covered by Cigna plans, Platt said; more than 11,000 other state employees and their family members are covered by the state’s Kaiser Permanente options.
Participation in the alliance aspect of the plans is also voluntary. It works like this: when an employee needs something done – a colonoscopy, say – they can always go to their regular doctor and have it done at the regularly negotiated rate by Cigna. But, the alliance also gives them access to something called the Healthcare Bluebook, which allows them to compare prices and quality ratings for a group of providers, including providers with whom the alliance has negotiated low-cost contracts. price.
When employees use the Bluebook to choose a lower cost vendor, the employee may end up receiving a check in the mail, essentially a reduction in savings. Platt said the goal is for employees to receive refunds within 90 days.
The state pinned high hopes on the experience. But, because the partnership is still in its infancy, Platt said it was too early to say how much he would save the state — or the employees.
“We hope that as they learn about it and explore it, they will enjoy another way to get quality health care,” he said.
The state’s participation is a milestone for the Colorado Purchasing Alliance, which began as an outgrowth of the Colorado Business Group on Health. The latter is a collection of employers who have come together to try to figure out how to reduce health care costs.
The alliance, like the Business Group of Health, is led by Robert Smith, a longtime healthcare executive who has spent the past several years using that experience to think about ways to improve the functioning of the healthcare market. health. His vision: If you want cheaper, better quality health care, the responsibility lies with those who pay. In Colorado, where about half the state is covered by a job-related health care plan, that means employers.
“If the market is dysfunctional, you can’t blame hospitals and you can’t really blame insurers,” Smith said. “It is the employers who write the checks.
Smith said there have been 12 employers signed up with the Colorado Purchasing Alliance so far, including a handful of school districts and local governments. But state participation is huge. The large number of people covered gives the alliance greater leverage in negotiations.
Smith said he also hopes the state’s willingness to be part of the alliance will send a message to employers still on the fence.
“It gives courage to other employers,” he said. “I intend to make the state of Colorado an example of employer-based purchasing.