Healthcare in Colorado: An Unprecedented Moment. An Unparalleled Opportunity.

In the 1960’s, Psychologist Fredrick Herzberg probed an interesting question about “Work and the Nature of Man.”  Herzberg wanted to know if removing environmental factors that dissatisfied workers would result in more satisfied and self-motivated workers.  He determined that they would not because of what became the “two-factor” theory.  Basically, he concluded that the factors that dissatisfy are not the same factors that may motivate you for success.  He referred to the first set of factors as “hygiene” factors and to the second set “success” factors.  His simple model brilliantly takes into account organizational complexity.

Since studying business administration in the mid-1970’s, I’ve always considered that Herzberg’s work should be more broadly and deeply applied to the very mission of the organization.  And I long ago concluded that while factors such as solid research, good data and reporting, responsive information systems, adequate resources, talented people and other infrastructure are so essential that their absence can make organizations fail, the presence of those factors, even in abundance, will not make an organization succeed.  Success factors are different than infrastructure.  They begin with leadership, a focus on the customer, and excellence in execution and operations.   These ingredients, enabled by the hygiene factors, propel organizations to their goals.

With regard to both hygiene and success factors, numerous considerations lead us to believe that Colorado employers are entering an unprecedented moment that offers an unparalleled opportunity to create a healthcare market that can provide them and our state will the most efficient and effective care in the country.  (Click here to read more.)

Colorado’s Hygiene Factors.   Colorado may very well be the best poised State in the US to actually sustainably improve healthcare and achieve the quadruple aim because of several complementary capabilities and capacities that are currently in place and being improved.

  • Existing legislation. CRS 10.16.1001 is a brilliant piece of baseline legislation (being updated) designed specifically to improve health care affordability by “pooling purchasing power among consumers and organizing employers” so that health care services are delivered in the most efficient manner.
  • A robust all-payer-claims database (APCD) being managed by CIVHC, that is now better funded and becoming more robust every month – and affordable for an employer to use. It includes a unique “Shop for Care” function for consumers.
  • The recent Rand Transparency Report analysis calibrated how expensive care in Colorado is relative to both other States and to Medicare as a benchmark, empowering proactive employers with an incredible framework.
  • Exceptional financial reporting and industry insights from the CFO and staff of the CO Department of Health Care Policy and Financing (HCPF).
  • Legislators, of both parties, seeking to create a more effective, efficient marketplace that better serves their constituents.

Colorado’s Success Factors.   As critically elemental as the above factors are, alone they are inadequate.  Thankfully, Colorado has numerous potential success factors – from our experience with the State Innovation Model to organizations such as the Colorado Consumer Health Initiative, HealthTeamworks, the Practice Innovation Program Colorado, and others.  Here are perhaps the three that could be most influential.

  • The Governor’s Office. Both buyers and sellers understand that our new administration has committed to making healthcare more affordable and accessible for all Coloradans.  We have a Lt. Governor and a team of staff working to make it so.
  • Regulatory Leadership. Intending to improve and take advantage of an existing statute, Colorado’s Insurance Commissioner is creative, proactive, engaged, and well-respected.
  • Leadership at CO HCPF. HCPF is doing more than expanding and improving Medicaid.  Its leadership has outlined a pragmatic roadmap to affordability and a plan for transforming care.

So What’s Needed Now?   Two factors could now make Colorado a national model of change and prove that the free market can work in healthcare.  The first will determine whether we do or not.  The second will determine how quickly.

  1. Courageous Employers. Employers have the greatest means and most pressing need for change.  As with most change, this will begin with innovators willing (or simply needing) to take the lead.   They will then bring in the early adopters and we’ll be on our way.
  2. Flexible Health Plans. I’ve always recognized that, for understandable reasons, national insurers have national models.  But given the local nature of health care, it’s unlikely that national models will foster local transformation.  Health plan leaders with authority to adjust to this specific market will succeed – both accelerating and benefitting from the change that’s going to happen anyway.

As always, we must be wary of short-term thinking and particularly self-interests that will seek to obstruct meaningful change.  The raw, sobering reality is that today’s market generates enormous revenues, margins, and reserves for some.  As Warren Buffet put it, there are three-trillion reasons why it’s hard to change healthcare.   Nevertheless, we have a confluence of good reasons to believe Colorado can be the State that does.


Bob Smith, Executive Director, CBGH