It’s no secret the cost of health care is astronomical and often outweighs perceived benefits. 

Colorado Gov. Jared Polis has made lower health care spending a priority for his administration and has presented a number of policy solutions.  The latest is House Bill 21-1232, also known as the Colorado public option. The initial version required health insurance premiums in 2024 to drop
20 percent below where they were in 2021 or the state would create an insurance plan. A newly introduced amendment moves away from a public option and requires private insurance companies to offer highly regulated, standardized plans with cost reductions over three years. 

Regardless of the amendments, Colorado would benefit from adopting a more cooperative approach in state-led initiatives. We should seek to improve health care outcomes alongside cost reduction and not treat them as mutually exclusive goals.

The Colorado health care industry opposed the original version of the public option due to the inherent revenue implications. Another valid concern is the public option essentially penalizes — or fails to recognize — organizations that already have made strides in reducing premiums and improving quality, mainly through cooperative arrangements with health care providers.  

Cooperation is paramount to cost reduction not only for the public option, but also across the board in health care. Again, we should seek to both improve health care outcomes and reduce costs.

The best way to achieve cooperative behaviors is to incentivize health care providers to have “skin in the game.” In other words, adjust their reimbursement in such a way to reward strong performance and penalize weak performance. The mechanism to accomplish these goals is to align financial incentives between providers and insurance companies to encourage both to work toward achieving the triple aim — lower costs, better care and  improved patient experiences.

If costs are reduced and quality improves, the hospital or doctor receives more pay. Ultimately, the best paid health care providers will be the best providers —  those that provide proactive, preventive care in the right setting at the appropriate level. Cooperative agreements allow all parties in the health care industry to align incentives based on doing right by the patient.

Organizations like Monument Health, known as a clinically integrated network, sit in the middle of these cooperative, “value-based” agreements. We bring providers and insurers together to create aligned financial incentives; share clinical best practices; and implement a robust, predictive model dataset that, in turn, drives higher quality outcomes across a broad population. 

Through our partnership with Rocky Mountain Health Plans, for example, we’ve reduced premiums for insurance plans sold on the Connect for Colorado Exchange by an average of 10 percent in the past year. That’s the biggest  reduction to an exchange product seen this year in Colorado.

Clinically integrated networks and value-based agreements should continue to grow until they represent a sizable portion of health care provider revenue. Today, value-based payment represents a third or less of a hospital’s total reimbursement, a step in the right direction.  CINs help shift the reimbursement model from pay for volume to pay for value as defined as the triple aim. Providers are paid based on the quality of care they give and positive outcomes of their patients rather than the impersonal, turnstile model in which they’re paid based on the number of patients they see. It’s a structure that promotes wellness and early intervention.

Medicare has begun to leverage the work of CINs for Medicare cost reduction as well. In 2019, Medicare reported $1.9 billion of savings generated by CINs that participated in value-based agreements with the Centers for Medicare & Medicaid Services. The work of these networks is effective regardless of whether insurance is publicly or privately funded. Washington’s CascadeCare, Maryland’s Health Services Cost Review Commission’s all-payer rate setting structure, Massachusetts’ MassHealth and other state-imposed health care options have all recognized the critical need for cooperative arrangements and have included a number of value-based components in reimbursement design to providers.  

Colorado would benefit from adopting a more cooperative approach as it considers state-led health care initiatives. We should shift our mindset to elevate as our ultimate goal better health care outcomes, which includes lower cost as a critical component. By encouraging cooperative arrangements with providers and insurers, Colorado can achieve better health outcomes for patients and promote lower costs, better care and improved patient experiences.