By Lisa Cirincione, Senior Resource Development Associate at Joining Vision and Action
It seems that each year, fewer people can afford healthcare. From 2006 to 2016, the cost of employer-sponsored health insurance increased 77 percent—from an average annual premium of $2,973 to $5,277. During that same time period, incomes only rose 19 percent. Warren Buffet recently called these rising costs “a hungry tapeworm on the American economy.” In 2016, healthcare spending represented an astounding 18 percent of the U.S. economy. It is estimated that by 2030, up to half of retired people’s Social Security income will be used to pay for their out-of-pocket healthcare costs. Just pause and think about that for a moment. Given the reliance that people will have on Social Security to pay for all of their expenses in retirement, it seems likely that more older adults are going to declare bankruptcy as they have fewer resources for housing, food, utilities, etc. Already, healthcare costs are the No. 1 reason older people become bankrupt.
Healthcare costs more in Colorado
The Center for Improving Value in Health Care (CIVHC), an independent nonprofit organization that JVA is proud to have worked with several years ago, recently participated in a multistate study that found that Colorado’s total costs across all healthcare services were 17 percent higher than those of the other states studied. In a recent webinar, CIVHC’s vice president of research and compliance, Jonathan Mathieu, stressed that Colorado’s high costs are attributable to both price and utilization. Coloradans use more hospital inpatient, outpatient and pharmacy services than patients in the other states in the study (Oregon, Utah, Minnesota and Maryland). Professional services were the only category where Colorado’s costs were lower than in the other states.
Where you live in Colorado also makes a difference
Those of us who live along the Front Range pay less for our healthcare. Denver’s per-member per-month cost was $403, and Colorado Springs’ was the lowest in the state, at $390. However, Colorado’s East and Greeley regions had the two highest costs in the state, driven by both higher utilization and higher prices. Grand Junction and the West region had the third- and fourth-highest total costs, respectively—primarily driven by higher prices, because utilization in those areas is either lower than or nearly equal to the statewide average.
What our Legislature is trying to do
To increase cost transparency at free-standing clinics, aka “docs in a box,” state Sen. John Kefalas introduced Colorado Senate Bill 18-146. The bill would require free-standing emergency departments to provide information to patients about the public and private health plans they accept, list the costs for the 25 most common health services they provide, and assure people they will be treated regardless of ability to pay. The need for this bill is clear—it is difficult to tell whether a site is an emergency room or an urgent care center, and it is even more difficult to discern what insurance a clinic accepts. There is a difference in cost between treatment at urgent care or a free-standing emergency room. Care in emergency rooms is typically 20 times higher than at an urgent care center because they carry higher staffing costs, have more expensive technology and need increased security because they provide round-the-clock care. Also, because of a federal law that prevents providers from discussing cost if it delays care in an emergency situation, many people don’t learn that they received care in an emergency room until they receive their bill—they thought they were at an urgent care clinic.
Another bill that is being proposed is Colorado House Bill 18-1260, which would require insurance carriers to provide information on the prescription drugs that cost the most, and the drugs that increase the most in price each year. The bill would also require pharmaceutical manufacturers to explain the reasons for their biggest price increases, e.g., marketing, research, manufacturing and other factors. Although the bill would not require price controls, it would promote price transparency.
What can you do?
Because most of us are commercially insured through our employers, we do not have a lot of leverage to negotiate for lower healthcare costs. However, CIVHC will soon begin sharing publicly limited information about which adult and pediatric practices are better at controlling costs through reduced prices and utilization. This transparency alone will help drive down costs, and we should pay attention to how our providers rank. Also, express your support for legislation that will promote transparency with regard to costs. As with everything, we have to be informed consumers.