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Cash for Colonoscopies: Colorado Tries to Lower Health Costs Through Incentives | Healthiest Communities Health News

By Markian Hawryluk | KHN

State workers in Colorado are being requested to be higher customers when procuring for well being care providers. And in the event that they select lower-cost and higher-quality suppliers, they might get a verify within the mail for a portion of the financial savings.

It’s a part of an initiative referred to as the Colorado Purchasing Alliance, by which employers within the state are banding collectively to negotiate decrease costs for well being care providers. The state authorities is certainly one of 12 employers which have agreed to be a part of the alliance and would be the first to use the newly negotiated charges and client incentives.

The purpose is to disrupt what’s thought of a dysfunctional market for well being care by encouraging employers and workers to make higher decisions and forcing well being methods within the state — which have a number of the highest prices and profits within the nation — to minimize their charges.

Since July 1, state workers have had entry to the Healthcare Bluebook, which is a web based device, owned by a well being knowledge firm of the identical title, that ranks well being suppliers by each prices and high quality. Providers within the high 25% for high quality are designated in inexperienced, the underside 25% in pink and anybody in between in yellow. The identical shade scale is used for prices.

“If you go to a green-green provider, then we’ll send you a check,” mentioned Josh Benn, director of worker advantages contracts for the Colorado authorities.

The checks can vary from lower than $50 for one thing like a mammogram to hundreds of {dollars} for surgical procedure. In most circumstances, the cash helps offset the worker’s copayments, coinsurance or deductible. But for preventive providers like colonoscopies, which don’t have any copay, it’s additional money within the worker’s pocket.

The reward program is obtainable solely to workers who select the state’s self-funded well being plan, which is run by Cigna, not the Kaiser Permanente possibility, which has a closed community of suppliers. Of the almost 20,000 individuals, each workers and relations, on the Cigna plan, greater than 1,200 used the device within the first six weeks, conducting 4,500 searches.

“We could cut the network to the bone and really limit choice, but part of what I want to do is encourage people to make better decisions,” Benn mentioned. “There are ways to curb health care spending without harming employees.”

Although it’s too early to inform how a lot the state will save by this system, Healthcare Bluebook estimates that employers save a median of $1,500 each time an enrolled member makes use of the web device to select a supplier.

“And you wind up with fewer complications and sick days,” Benn mentioned.

Larimer County, in northern Colorado, has been utilizing Healthcare Bluebook since 2018 in its incentive program to counteract the excessive costs it was paying for workers’ care beneath its self-funded plan. With little competitors, the native well being methods had been charging county workers almost double the costs in Denver, simply two hours to the south.

“We have one particularly dominant health care system here that knows they are the system of choice, just based on market reputation, and they are willing and able to charge accordingly,” mentioned Jennifer Whitener, advantages supervisor for the county.

Whitener recalled one worker who wanted a hip substitute and located a free-standing orthopedic surgical procedure middle that value $20,000 lower than a hospital-owned facility and had greater high quality rankings.

“Being able to share information in terms of how you can shop for health care and that not everyone is charging the same price for everything, and — oh, there’s actually a difference in quality depending on where you go — has been eye-opening,” she mentioned.

Over the primary 4 years, the county paid out a median of $15,000 in rewards per 12 months. The county calculated that for each $1 it spends to provide Healthcare Bluebook to its workers, it saves $3.50.

Andrea Bilderback, a well being promotion and outreach specialist with the county, used the device when deciding the place to have a mammogram and a colonoscopy after not too long ago turning 40. She wound up getting a verify for $100 for the colonoscopy and $35 for the mammogram, neither of which had any out-of-pocket prices. She and her husband used the funds for a date night time, a welcome respite for the dad and mom of a 1½-year-old boy.

“It was like free money,” Bilderback mentioned.

Similar approaches have been used with various levels of success throughout the nation. Self-Insured Schools of California, a buying alliance that represents 450 faculty districts within the Golden State, carried out an identical system years in the past. Officials in contrast the costs they paid for 5 widespread procedures — arthroscopies, cataract surgical procedures, colonoscopies, higher GIs, and endoscopies — at hospitals versus free-standing surgical procedure facilities. They discovered that surgical procedure facilities had been usually less expensive and the care was typically rated as higher. The group capped the sum of money it will pay hospitals, leaving workers on the hook for any steadiness. If they went to a surgical procedure middle, there can be no cap.

For instance, arthroscopies had been capped at $4,500, so if a hospital charged $6,000, the affected person could possibly be billed for the remaining $1,500. But if that affected person went to a surgical procedure middle, the plan would cowl your complete value, irrespective of the quantity.

In the primary 12 months, beginning Oct. 1, 2018, the brand new strategy had shifted 54% of procedures from high-cost hospitals to lower-cost surgical procedure facilities, saving the college districts $3.1 million in well being care prices.

“If you could pay $25,000 for a car or $75,000 and the only difference was the overhead of the dealership, why would you pay $75,000?” mentioned John Stenerson, Self-Insured Schools of California’s deputy govt officer. “That’s kind of like what we do with medical pricing all the time.”

The Colorado alliance did an identical evaluation of the ten most frequent outpatient procedures paid for by its employer members. Even earlier than negotiating any charges, these employers may minimize their prices for these procedures in half by sending workers to surgical procedure facilities as an alternative of hospitals. Surgery facilities have a tendency to cost lower than hospitals for the identical procedures, and hospitals typically tack on a facility charge that will increase prices for customers and employers. A recent study discovered that prices for a spread of orthopedic surgical procedures had been a median of 26% decrease at ambulatory surgical procedure facilities than at hospitals.

The cash-back incentive program is a part of a broader effort by the Colorado alliance to decrease well being care prices for state workers and 12 different employers, largely faculty districts and native governments. But the state workers are what give the alliance a large block of lined lives and larger negotiating energy with medical doctors, hospitals and different well being suppliers.

Robert Smith, head of the Colorado Business Group on Health, which is spearheading the alliance, believes the purchasing-alliance mannequin can revolutionize the well being care market and use the ability of the employers to drive down prices. Most firms, he defined, pay premiums to a well being plan to cowl their workers however permit these well being plans to negotiate charges with hospitals, medical doctors and different suppliers. It can be too sophisticated and time-consuming for most companies to tackle that position themselves.

Health-purchasing alliances, alternatively, permit employers to band collectively and negotiate charges for a a lot bigger group of workers, giving them larger market energy to negotiate decrease charges.

“Health care outcomes are not related to the price,” Smith mentioned. “You can pay twice as much for some of the worst health care at one facility, and then you can get some of the best health care at half the price at another facility 10 miles away.”

But if employers modified the best way they purchase well being care, it may create a aggressive market, Smith mentioned.

So far, a lot of the negotiated charges have been restricted to suppliers within the populous Front Range area of Colorado that features Denver, Fort Collins, and Colorado Springs. The alliance is attempting to join suppliers in different areas, significantly within the western a part of the state, but it surely would possibly take three years or extra to absolutely transition to the brand new mannequin.

A report by the nonprofit Catalyst for Payment Reform discovered that such alliances typically had early success however couldn’t survive, partially due to the reactions of the massive well being care methods. Those methods typically undercut the pricing of buying alliances to drive them out of enterprise.

So far, Smith has negotiated with free-standing ambulatory surgical procedure facilities, imaging amenities and physician-owned clinics. But he has had little luck getting the bigger well being methods to play ball.

“If it’s disruptive enough that it affects their bottom line and they notice it,” mentioned Benn, the state worker advantages director, “then, yeah, I think they’ll come to the table.”

This story was produced by KHN (Kaiser Health News), a nationwide newsroom that produces in-depth journalism about well being points and a significant working program at KFF (Kaiser Family Foundation). It has been printed with permission.

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