Healthcare: The Path Forward

“I have a great respect for incremental improvement, but I’ve always been attracted to the more revolutionary changes.” Steve Jobs

“When you come to a fork in the road, take it.”  Yogi Berra

In a very real sense, the fork in the road that Amendment 69 will represent for Colorado voters in November is the choice between two very different promises.  One is the promise from health plans and providers that staying the course with a free market approach will gradually slow costs and eventually improve quality. The other is the promise from proponents of ColoradoCare that a complete upheaval of the status quo will result in immediate savings and provide a path to  affordability.

On March 10th CBGH sponsored a discussion on the why and why not of Amendment 69.  Healthcare author and journalist T.R. Reid presented the case for Amendment 69, and Kim Bimestefer, Cigna General Manager for the Mountain States, presented the case against.  This well attended meeting generated all kinds of questions and lots of interest.  Here are some takeaways.

ColoradoCare is not simply “the road less traveled, ” it is the road that has yet to be taken.  It would make Colorado the first state in the union to provide universal healthcare. Covering everyone is a laudable goal, but some fear that it would effectively do away with health plans and TPAs, and eliminate the need for consultants and brokers.  While proponents reasonably point to successful cooperative models both within healthcare (Group Health of Puget Sound – one of the country’s most respected plans) and without (dozens of utility companies across the country), the model has never been attempted on a statewide level.  As such, the implications cannot be fully known or anticipated.

While ColoradoCare could slash administrative costs by as much as two-thirds, it is not clear how it would address the 25-50% of health spending resulting from waste on the delivery side. And is Colorado, which is among the lowest cost states in the country with one of the best economies, the right place to test wholesale change?

 On the other hand, Colorado employers simply cannot continue to absorb health care costs that double every 10 years – cost increases that have occurred not simply despite the health plan’s efforts, but in large part because of them.  For instance, deep discounting has stimulated ever increasing and unnecessary utilization, and forcing discounts on providers has created reciprocal incentives for providers to consolidate rather than to actually improve the value of their services.

Continuing to ride the fee-for-service horse has richly rewarded volume over value. Hawking “consumer-directed health plans” and inflating enrollee deductibles has postponed early interventions and increased long-term costs. And perpetuating the shortsighted undervaluing of primary care has pushed patients to the most expensive sites and providers.

If health plans actually are capable of “pulling the right levers” to improve value, there isn’t a great deal of evidence that they have done so. As long as health plan revenues are tied to and proportionate with healthcare increases, employers have every reason to question the underlying premise of today’s healthcare market.

CBGH believes that voters should study the pro’s and the con’s and make an educated decision on Amendment 69.  We encourage employers to be involved. You and your employees fund the majority of healthcare today and you will continue to fund the majority of care whether the ballot initiative succeeds or fails.   Regardless of the outcome, employers must increasingly be proactive purchasers of care.