Summit County’s high health-care costs still mysterious, despite study
August 2, 2016
The results from a statewide health-care study are in, but, as Summit County Commissioner Dan Gibbs put it, we still don't know why "a Band-Aid costs six times more in one part of the state versus another."
He was part of a coalition of leaders from the state's High Country communities who fought successfully to pass a law mandating Colorado's Division of Insurance answer a simple question: Why are health-care costs in the mountains so high?
The answer is proving to be more complex than anticipated.
On Monday afternoon, the state's top insurance official, Marguerite Salazar, delivered the study's findings to the General Assembly's Joint Budget Committee in Denver.
“(The health study) didn’t dig deep into what the true costs of health care are in Colorado.”Dan GibbsSummit County commissioner
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Gibbs, who was outspoken in his lobbying efforts for the health-care study this past April, attended Monday's session. Although he felt the information presented was helpful, he didn't think the study data went far enough.
"It didn't dig deep into what the true costs of health care are in Colorado," he said.
Instead, what the analysis offered was what a lot of citizens, particularly those on the Western Slope, already know: Both insurance premiums and the cost of care in these rural areas varies dramatically from other more populated regions of the state.
For example, the statewide average for total annual outpatient costs is $409. In Region 9, which includes Summit, it's more than double, at $852. The same is true of the average cost of services like X-rays and MRIs. Lab diagnostics are nearly triple.
"Understanding why variation exists and what factors dictate the negotiated rates between payers and providers is so critical if Colorado is going to do anything about curbing the cost of health care," added Gibbs. "This analysis will help shed some light that there are major difference throughout Colorado, but, in my opinion, the real work has just started."
The bill required that the Department of Insurance make a specific recommendation regarding the state moving to a single health-insurance region like six states across the nation already possess for the individual market. Colorado currently has nine regions. In the study, Salazar stated her concern that a single-rating area will not solve the problem of increasing health costs statewide.
"Moving to a single geographic rating area could end up harming the very citizens it is trying to help," she said. "People in the mountain areas could be facing even higher premiums or could be left without any insurance options. A move to a single geographic rating area would be an attempt to treat a symptom rather than finding a cure."
The biggest worry is that a single rating area would result in insurance providers possibly offering plans only in low-cost regions, or dropping out of the market altogether. Another suggested drawback is that it would force those insured in lower-cost areas to subsidize the high-cost ones.
So rather than endorsing a shift toward a single rating area — one that the presentation suggested could save consumers in Region 9 as much as 27 percent under certain scenarios — Salazar advised forming a small committee of stakeholders. That group would now take this price variation data and come up with tangible recommendations before the end of 2016.
Gibbs believes this a positive step. However, he believes the success of the committee depends on who is appointed — be they insurance company representatives, hospital officials or legislators. The former state senator and state rep. would prefer to see actual legislation hit the Assembly floor as soon as possible but did note his desire to be among those appointed to this stakeholder body to maintain efforts in lowering health-care costs statewide.
"The landscape is scary, frankly," said Gibbs. "There needs to be a lot more work. I'm a realist, and I know it's a daunting task when the status quo is working really well for a lot of powerful interests. But there are a lot of great people working to bring forth meaningful change and we're all going to work to continue to try to make an impactful difference on this issue."