Allison Neswood serves as CCLP's Deputy Director of Strategic Priorities. She is an expert in public health insurance plans (Medicaid and CHP+), Aid to the Needy Disabled, immigrant access to services and health equity. Staff page ›

Mar 1, 2018

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Report sheds light on Colorado health costs

by | Mar 1, 2018

Colorado has a problem with health care costs. While this is not news to many, a new report released by the Center for Improving Value in Health Care (CIVHC) tells the tale in numbers.

The report reviewed total costs across all health care services in five different states and found that Colorado services cost, on average, 17 percent more than services in comparison states.

CIVHC broke down how Colorado compares in terms of costs for different categories of care.  Colorado costs are 16 percent higher than the five-state average for inpatient services, 24 percent higher for pharmaceuticals and 30 percent higher for outpatient services.

The report revealed huge variations in costs between different regions of the state. Per member per month (PMPM) costs for all health care services ranged from $390 PMPM in Colorado Springs to $591 PMPM in the Eastern Plains.

Overall, the report suggests how important it will be for Colorado to get control of our relatively high health care costs – a primary driver behind the high premiums that are putting pressure on so many household budgets.

State policymakers are engaged in efforts that could have a positive impact on health care costs. Last summer, the Colorado Commission on Affordable Health Care completed a comprehensive analysis and set of recommendations for cost containment. In addition, bills introduced during the current legislative session aim to rein in pharmacy costs, increase hospital price transparency and implement a comprehensive approach to combatting the state’s opioid epidemic.

In addition, Colorado’s Department of Health Care Policy and Finance is in the process of rolling out the new Accountable Care Collaborative program in Medicaid, which aims to reduce costs by increasing care coordination and integrating behavioral health and primary care.

There are also promising solutions we can draw from in other states. For example, Maryland has implemented global budgets for all hospitals, which involves guaranteeing hospitals a set amount of revenue for the coming year, regardless of the amount of services they provide. The approach creates a powerful incentive to reorganize care for prevention and to invest in community services. Maryland’s model has resulted in improved health outcomes and saved more that $100 million for Medicare in the first year.

CIVHC’s report highlights the importance of data in driving cost containment efforts in Colorado and the need to address health care costs in the state.

– By Allison Neswood

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