Health care costs

Sunday, November 01, 2015 11:16 AM
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CMS task force informs state commission on cost drivers

by Kate Alfano, CMS Communications Coordinator


  • The 12 commissioners of the Commission on Affordable Health Care have worked over the last year to identify systemic causes of excessive and unnecessary health care costs.
  • The commission put out a call for information for thoughts on fundamental cost drivers, barriers to reducing costs and their strategies to address costs. Fifteen organizations responded, including all of the major players in Colorado health care.
  • The CMS Task Force on Health Care Costs and Quality guided the Colorado Medical Society’s efforts and will continue to be engaged for the duration of the commission’s work.

Health care costs have been rising dramatically for the past two decades, in Colorado and across the country, cancelling any economic progress of the middle class and forcing legislators into Hobson choices (no horse or a bad horse). Despite progress on expanding access to health care, unchecked health care expenditure growth will continue to crowd out other vital needs unless state and local governments can find effective cost-containment strategies to implement in the coming years.

That’s one reason why, during the 2015 Colorado General Assembly, state policymakers established the Commission on Affordable Health Care, tasking its 12 appointed members from a broad spectrum of settings and experiences with identifying systemic and other underlying causes of excessive and unnecessary health care costs and proposing specific legislative, regulatory and market-based strategies to reduce costs and improve care value. Jeffrey Cain, MD, is the sole physician member on the commission.

This fall the commission put out a call for information for interested stakeholders to share their thoughts on fundamental cost drivers, barriers to reducing costs and their strategies to address costs. Fifteen organizations responded, including all of the major players in Colorado health care representing physicians, hospitals, health plans, business and others. The CMS Task Force on Health Care Costs and Quality, co-chaired by Laird Cagan, MD, and Alan Kimura, MD, MPH, guided the Colorado Medical Society’s efforts and will continue to be engaged for the duration of the commission’s work.

The commission published a synopsis of responses organized by key topic areas. The summaries below give key points from those submissions.

The commission will present the first-year report to the Colorado General Assembly in mid-November. In their second year of work, commissioners will continue analyzing the fundamental drivers of health care spending and seek input from Coloradans. Early in 2016, the commission will go on the road to conduct nine community meetings to gather reactions and feedback on its work and recommendations. These meetings will be held in Arapahoe County, Greeley, Colorado Springs, Alamosa, La Junta, Grand Junction, Summit County, Denver and Adams County, and will provide input and build grassroots support for the eventual recommendations. Their final report and recommendations are due at the end of 2017. Stay updated on the work of the commission by visiting their website,


  • State requirements and administrative burden are real issues; assisting complex patients requires a lot of resources and providers are rarely paid for care coordination and patient health literacy.
  • Colorado’s Community Safety Net Clinics (CSNCs) manage costs by implementing staffing models that rely on volunteers for clinical and administrative roles, tapping into the charitable capacity of health care systems, and giving patients copies of X-rays and labs to take to specialty visits to reduce duplication.

Colorado Academy of Family Physicians

  • Transparency in health insurance pricing and consumer cost-sharing would help make insurance more accessible and affordable.
  • Colorado should increase the number of family physicians in the right places.
  • Accelerate the transition away from the fee-for-service payment system toward a payment system that compensates providers for activities that make patients healthier.

Colorado Association of Health Plans and AHIP

  • Costs to transparency can be a barrier and, in certain situations, transparency can lead to reduced competition and harm to consumers.
  • The system experiences unnecessary services due to the fee-for-service model that generates incentives for high volume.

Colorado Business Group on Health

  • Employers should change how they purchase and provide health care services by employing value-based purchasing and value-based design.
  • The main barrier to improving outcomes and reducing avoidable costs is a lack of incentives for enrollees – particularly those with or at risk of a chronic condition – to select and seek care from primary care physicians.

Colorado Coalition for the Medically Underserved

  • Inequalities in care among different racial and ethnic groups yield high costs.
  • Most health care costs are generated by administrative inefficiencies; simplify them by encouraging electronic exchange of information.

Colorado Community Health Network

  • Primary care providers’ inability to access timely, actionable patient data prohibits them from doing proactive follow-up.
  • CHC reduces costs by providing comprehensive and integrated primary care with behavioral and oral health, providing care to individuals and families regardless of insurance coverage, and focusing on preventive care and additional services such as care coordination.

Colorado Foundation for Universal Health Care

  • Utilize bulk purchasing market power to contain excessive costs of pharmaceuticals and durable medical equipment.
  • Decrease duplication and increase efficiency through a records system that allows one provider’s medical system to communicate with all others.

Colorado Hospital Association

  • Price transparency must offer clear information that is readily accessible to patients and enables them to make meaningful comparisons.
  • Issues come from a payment system that incentivizes volume, the structure and supply of the workforce, and costs of billing due to a complex system, among others.

Colorado Medical Society

  • Colorado health care would benefit from the development of payment and incentive systems that encourage value as well as care coordination and integration.
  • There is currently a focus on compliance rather than care.
  • CMS sees value in the Choosing Wisely campaign, educating physicians on payment reform and needed capabilities, the development of a task force to review and develop evidence-based proposals to reduce costs, and supporting a strong foundation of primary care.

Colorado Nursing Association

  • Continue to advance optimal utilization of advanced practice registered nurses throughout the state.
  • Compiling patient-level costs across multiple settings will allow for improved financial reporting and benchmarking of costs and resources expended for patient care.

Colorado Telehealth Network

  • Telehealth has been shown to reduce costs when utilized as an alternative to in-person visits when medically appropriate.
  • Barriers to telehealth include access to reliable bandwidth and cost of workflow redesign.


  • Health care is heavily regulated. The cost to comply with federal and state laws as well as the cost to educate and train physicians will continue to be barriers.
  • The current liability system is often inefficient with significant money spent on attorneys’ fees rather than compensating patients who suffered from negligent care. These fees also represent money that could otherwise be invested in patient safety initiatives with long-term benefits.

Health Care for All Colorado Foundation

  • The public has a right to know in advance what charges are for each hospital; all chargemasters should be public.
  • Private health insurers’ administrative overhead is limited by 20 percent compared to 3 percent for Medicare.


  • Reducing the extensive costs of obesity-related illnesses requires multifaceted, innovative approaches. Strategies must address the environmental and systemic obstacles to healthy eating and active living.


  • Hospital spending is three times the amount of prescription drug costs.
  • There is suboptimal use of prescriptions because of required out-of-pocket costs and high cost sharing.

Posted in: Colorado Medicine | Practice Evolution | Payment Reform | Health System Reform


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