Fed Up With High Health Care Costs, A Community Asks for A Better Deal

By: - February 21, 2019 12:00 am

FRISCO, Colo. — St. Anthony Summit Medical Center commands an epic view of the snow-covered mountain valley here. It’s perched above town, flanked by pine forest and facing frozen Lake Dillon.

But the attractive setting comes with not-so-attractive prices.

A hospital visit in this ski town costs about 40 percent more than a visit less than 100 miles away in Denver. In 2015, an overnight hospital stay cost 80 percent more, according to a study commissioned by the Summit Foundation, a local community group with a mission to help working families.

High prices for medical services — here in Summit County and across rural Western Colorado — have left many residents struggling financially.

“For a number of years, it’s felt like a crisis to our commissioners and to our community as a whole,” said Sarah Vaine, assistant county manager for health, safety and human services.

Now local leaders are working on a plan to drive down prices that could be a model for the state and other places facing high health care costs.

They’re forming a nonprofit, the Peak Health Alliance, that will try to negotiate lower hospital, clinic and physician prices on behalf of some of the largest employers in the area, including the county and the towns of Silverthorne and Breckenridge.

Peak Health Alliance would then partner with an insurance company to package those discounts into plans that dues-paying members can offer to their employees, or that Summit County residents can buy on the state exchange, created under the Affordable Care Act. The plans could have different features — deductibles could vary, for instance — but if they’re based on lower prices, they should have lower premiums.  

Lee Boyles, CEO of St. Anthony Summit, said he’s willing to work with the county, and praised the efforts of local leaders. “We know we are a significant entity when it comes to health care in the county,” he said. “And we really do empathize, and we really do have concern with the high cost of care.”

Negotiations have barely begun, but Colorado’s insurance commissioner, Michael Conway, is excited about the strategy and is already planning to try it elsewhere, perhaps by nudging the state employee health plan to join a statewide alliance that would bargain with health care providers.

“I’m going to be pushing for this to be something much bigger than the Summit County idea,” Conway said.  

Similar efforts have succeeded in a few places in the country, but some have failed. Summit County’s is unique because it aims to bring together an entire community — including large employers, individuals and small employers — to push for lower prices, Conway said.

‘I’m Furious’

On the state’s health insurance exchange, Summit County is part of a pricing region that includes almost all of Colorado’s scattered mountain towns, as well as farms and ranches near the Utah border.

The region generally has the highest premiums in the state, with 14 counties served by just one insurer.

Economists who study health care markets say people who live in rural places tend to pay more for health care than city dwellers do, typically because rural places have fewer hospitals. When one hospital system dominates an area, it has little incentive to attract customers with lower prices.

Summit County residents don’t face the highest prices in the region. They do have a choice of insurers. And they can drive to Denver’s hospitals in less than two hours, if there’s no traffic. But people here are fed up with health care costs that seem unreasonably high.

Boyles, the hospital CEO, said there are multiple reasons why prices at his hospital may be higher than prices in Denver. The higher local cost of living in a resort community means higher pay for hospital staff. And the hospital operates year-round even though it sees far more patients during peak tourist season, he said.

“It’s a very unique market, not just for health care but for everything around here, and that’s going to require a unique solution,” he said.

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Sophie Quinton

Sophie Quinton writes about fiscal and economic policy for Stateline. Previously, she wrote for National Journal.