An ambitious effort to lower healthcare costs is taking shape in Summit County, Colo., and its leaders announced a major step forward Tuesday.
Peak Health Alliance, a group of employers and individuals that together represent roughly 6,000 people, has directly negotiated payment rates for services with the area's major health system and the county's only hospital provider, Centura Health. The group will now send that contract to health insurers and solicit bids to see who can create the best plan.
Summit County has some of the country's highest health insurance premiums, said Tamara Drangstveit, a member of Peak's executive committee. The idea is, in part, to bring those down.
"There does seem to be a fair amount of interest from insurers," said Drangstveit, whose day job is serving as executive director for the Family and Intercultural Resource Center. "They've struggled with the negotiation piece, too. So the fact that we've been able to crack that nut for them is very appealing."
The group hopes to select a carrier the first week in May for plans that are effective starting Jan. 1, 2020. The Affordable Care Act-compliant plans—a preferred provider organization option and an exclusive provider organization option—will be available to any businesses based in Summit County or individuals who live in the county. So far, Peak's membership represents about one-third of the county's privately insured population, Drangstveit said.
Employers who've signed letters of intent to participate include the governments of Summit County and the towns of Breckenridge and Silverthorne, Summit School District and Breckenridge Grand Vacations. A large employer not participating is Vail Resorts, because it's a national company that can't carve out a separate plan for its local employees, Drangstveit said.
Centennial, Colo.-based Centura agreed to "very aggressive" rate reductions compared to its usual charges, said Lee Boyles, CEO of Centura's St. Anthony Summit Medical Center in Frisco.
"We really did take some substantial rate reductions on our part, which we felt were appropriate and necessary," he said.
Boyles declined to share an average reduction or examples of rates for specific services. The rates in the contract will apply to any Centura provider, so if patients need a higher level of care, they can visit one of Centura's 16 other hospitals.
Peak plans to develop rates with other providers, too, especially those that provide reproductive healthcare and behavioral health services, Drangstveit said. The group is also finalizing a contract with Children's Hospital Colorado for certain specialty services.
Colorado's Insurance Commissioner, Michael Conway, has vigorously supported Peak's work.
"This model can lead to sustainable relief for all Summit residents who buy health insurance," he said in a statement, "and once we prove that this model can be successful, I want to take it statewide because lowering healthcare costs and providing relief to Coloradans for the high costs of healthcare is one of the governor's primary goals for the entire state."
Centura already has direct contracts with some of the large employers involved in Peak, such as the school district, county government and Breckenridge Grand Vacations, which acted as a stepping stone. While Centura supports the initiative, it won't be an easy shift. Boyles said accepting the new reimbursement rates will require a reevaluation of the services it offers. Like many hospitals, some of St. Anthony's service lines operate at break-even or even at a loss, he said.
"Those need to definitely be tightened up for us to maintain this collaboration," Boyles said.
Drangstveit said she's not aware of any models elsewhere in the country like Peak. There's been a lot of interest from other communities.
"As far as we know, we're the guinea pigs," she said.