Photo: Grand County Commissioner Rich Cimino at State Capitol discussing healthcare legislation bill to help rural communities offset high costs.   Courtesy of Commissioner Cimino

Even if your employer offers you health insurance at work, chances are you’re shelling out more money for medical care year over year. Rural communities’ costs can be substantially higher, according to Peak Health Alliance (PHA), a non-profit health insurance purchasing cooperative founded in Summit County to negotiate lower healthcare rates by using the purchasing power of the community.

Last year, across the nation, employers spent an average of $15,159 in premiums to cover a family of four, according to an analysis from the Kaiser Family Foundation. In all, that’s an increase of 51% from a decade ago. Things haven’t become any more affordable for workers, either.

The average family of four paid a total of $7,726 in 2018, according to the foundation. That’s an increase of 67% from 10 years ago. Of that amount, families paid $4,706 in premium contributions for coverage at work, plus $3,020 in cost-sharing — that is, deductibles, coinsurance and copayments. The cost of coverage has even outpaced wage growth, which has gone up by 26% over the last decade.

Collectively, employers are the largest purchaser of healthcare in the United States, providing benefits for over 153 million people. There is considerable interest in how employers can use their purchasing power to improve quality and reduce cost in the healthcare system. Employer plans typically include plan networks, in which enrollees face lower out-of-pocket expenses if they receive care from a designated provider. By negotiating prices and establishing quality standards with providers participating in the network, employers can attempt to influence the cost and quality of care.

Grand County Commissioner Rich Cimino has been working behind the scenes on a local and state level trying bring down the cost of healthcare while still providing quality service. Commissioner Cimino said, “Healthcare is a complex economic system and we are trying to find innovative ways to reduce the costs to our citizens.”

In May 2019, Commissioner Cimino along with Senator Rankin, Senator Donovan, Governor Polis and other Colorado leaders introduced and passed new legislation to help insurance carriers offset high cost claims. House Bill (HB19-1168), the Colorado reinsurance program, will provide reinsurance payments to health insurers to aid in paying high-cost insurance claims. Cimino said, “This bill is intended to help cover carriers in specific claim situations. High cost claims contribute to the overall cost increases we see each year.”

Cimino has also been an advocate for building an alliance with the Summit County nonprofit organization Peak Health Alliance that formed to negotiate lower healthcare rates by using the purchasing power of the community.

“As rural communities, we want to have hospitals and quality healthcare.” Peak Health Alliance CEO Tamara Pogue-Drangstveit said, “The only way to have affordable services is to use those local facilities and providers.” Creating a network of local providers makes sense and the more participation in the network, the stronger the network becomes. “If we really want to have efficient affordable rural health care then we need to use the local healthcare providers.” 

While networks can mitigate cost growth, there are considerable challenges to developing and promoting these strategies, including concerns that tighter networks may limit enrollee choice and potentially expose employees to out-of-network charges. “Healthcare is so complex that people tend to be a little bit afraid of it. Part of our job at Peak Alliance is to help consumers and employers have more of a voice and more power to help design a local system that provides balance and is economically fair,” said Drangstveit.

A part of Peak Alliance’s job is to help negotiate with local providers and help local providers negotiate their needs with insurance companies. “In Summit County we have worked hard to bring all of our local providers into the network. It gives the consumer more options locally,” said Drangstveit.

“We’re proud, humbled, and excited to be offering plans to individuals, families, small businesses and groups for 2020 through Bright Health and Rocky Mountain Health Plans; with a big lift from St. Anthony Summit Medical.” Drangstveit said, “We are working with Grand County and the healthcare providers to offer services to the citizens of the community. We want to build a strong network so local providers can reduce their charges and offer more procedures for less money.”

Under Peak’s agreement with the Summit County Centura-owned medical facilities, they have seen average hospital costs come down to between 250% and 300% of Medicare costs and insurance premiums drop considerably. Those premiums have dropped 30% in some cases for individuals and between 15% and 27% for area small businesses.

And the organization is now working with Grand County Commissioners to offer the same in Grand County, beginning in January 2021. Grand County faces similar issues as do all rural communities on Colorado’s Western Slope. Premium costs have sky-rocketed. Local care is expensive, though Drangstveit says that the costs of non-profit Middle Park Health are much more affordable, in comparison to other hospitals, with average pricing between 150% and 200% of Medicare costs. 

Many Grand County residents do not support local providers, seeking service outside of the county. But the hope is that the many strategies of the Alliance, such as leveraging community-specific data, will result in both less expensive insurance premiums and more affordable high-quality local care. 

Peak Health Alliance is a non-profit whose formation was underwritten through the generosity of the Summit Foundation and local government organizations in Summit County. The ongoing operations are primarily funded by membership fees, paid through the monthly premiums of Peak Health Alliance plans. Peak was first initiated as a special project of the Summit Foundation. Today it is a 501(c)3 non-profit operated independently and based out of The Keystone Center in Keystone, Colorado.