By Katie Kerwin McCrimmon
Rates for heath insurance in Colorado’s mountain resort communities — which notoriously have been the highest in the country this year — are heading down for 2015 with Anthem Blue Cross and Blue Shield of Colorado’s announcement today that it will sell a new product for residents in four pricey resort counties.
The preemptive move aims squarely at Kaiser Permanente, which has announced plans to expand into mountain resort regions in 2016.
Health insurance costs are the highest in the nation in Vail and other Colorado ski resort areas. (Photo by Kathleen Lavine, Denver Business Journal.)
Colorado’s Division of Insurance plans to unveil approved 2015 rates for all health plans across the state late next week.
The new Anthem HMO, which will be called “Mountain Enhanced,” will cut rates for consumers by about 8 percent from this year to next, said Shalini Wittstruck, Anthem’s director of network management.
“We’re going to drive down the cost of health care,” Wittstruck said.
Altogether, Anthem covers about nearly 1 million Coloradans. Along with Kaiser, CIGNA and Aetna, it’s one of the biggest insurance carriers in the state.
Anthem is partnering with Vail Valley Medical Center, Centura Health and about 75 medical providers in Eagle, Summit, La Plata and Montezuma counties.
Left out of the Mountain Enhanced plan for now are the Aspen and Glenwood Springs areas, where high health care prices have left residents deeply frustrated.
Wittstruck said Anthem has been negotiating with hospitals and providers in Garfield and Pitkin counties, but so far, can’t include them in the new plan.
Customers in neighboring mountain counties who select Mountain Enhanced will have to agree to get their care locally rather than driving to Denver or Grand Junction where many have sought care in the past. In return, local health providers have agreed to cut their rates.
Wittstruck said the loud complaints from consumers this year helped bring providers to the table so Anthem could negotiate better prices. On top of more affordable care, she hopes consumers will like staying in their communities.
“It’s going to provide a localized feel to health care,” Wittstruck said. “We’re super excited.”
She said Kaiser’s decision to fight for mountain turf lit a fire under Anthem.
“It forced us to take a step back and say, ‘What are we going to do? How are we going to remain relevant?’”
In some parts of Colorado — and the U.S. — where hospitals and doctors don’t have much competition, prices have gone up and up.
“When there’s not a lot of competition, costs naturally are driven up. It’s the economics of scale, if you will,” Wittstruck said.
She said hospital managers and doctors who live and practice in the resort communities know they need to help lower costs.
“There’s a different dialogue than there’s been in the past,” she said. “We’re really excited to see what happens in 2015 and beyond with this product.”
Hospital managers also pledged to offer high-quality, affordable care to consumers.
“As Eagle County’s community nonprofit hospital, we are committed to finding viable initiatives to address rising health insurance premiums,” Vail Valley Medical Center President and CEO Doris Kirchner said in a written statement. “Mountain Enhanced is a good option for local individuals to receive quality health care close to home and at a reduced premium.”
The president and CEO of Centura Health, Gary Campbell, also highlighted the benefits of the new Mountain Enhanced HMO.
“Our partnership with Anthem to create this exclusive mountain health plan helps us carry out our combined vision to deliver optimal health care value and support population health management. By making health care more accessible and affordable in our mountain communities, we will ensure consumers receive high-quality, convenient care at an affordable cost,” Campbell said in a written statement.
Once Colorado regulators announce new rates, consumers can start perusing them. Open enrollment to buy health plans both on and off the exchange, Connect for Health Colorado, will begin on Nov. 15.
“‘When there’s not a lot of competition, costs naturally are driven up. It’s the economics of scale, if you will,’ Wittstruck said.” My take, as a health care service consumer and not a provider, is that Ms. Wittstruck’s statement is only part of the story. More than economies of scale, what this pattern of higher costs in areas with less competitioin suggests to me is that the costs of health care are being driven by the private sector, and underlying that, the necessity (in the current abhorrent system) of earning a profit. Variation – sometimes huge variation – in the cost to the patient of the same procedure, depending upon where that health care is delivered, has little to do with the procedure itself, and much more to do with corporate balance sheets.
Anthem’s move helps, a little, but it doesn’t eliminate the perniciousness of the profit motive in Colorado’s health care system.