By Katie Kerwin McCrimmon

Blame the helicopters.

One of Colorado’s least populated counties leads the state in health costs per person, according to new 2012 data from Colorado’s All Payer Claims Database (APCD).

Mineral County in southern Colorado is home to just one town, Creede. It also has beautiful public lands that were ravaged by wildfires last summer and a population of about 700 that skews older and therefore sometimes sicker. Geographically isolated by canyons and mountain passes, the people of Mineral County face long trips if they need to be hospitalized.

“Anyone who has a heart attack or a traumatic accident has to be flown out. It’s about $50,000 for a helicopter flight out of here and we had four last summer,” said Joni Adelman, the county’s part-time public health nurse.

Historic health costs have a direct impact on how much customers must pay for health insurance through the state’s new exchange, Connect for Health Colorado.

And in Mineral County, even the public health nurse probably won’t buy insurance.

“It’s very unaffordable. I don’t get insurance (through the county) and my husband works at an area ranch,” Adelman said. “The lowest policy we found was about $700 a month with a $12,000 deductible. How is any family going to afford that?”

While Mineral County is Colorado’s most expensive county per capita — with average total health costs of more than $5,000 per person in 2012 — other rural and resort counties also crowd the top of the list.

Pitkin County, home to ritzy Aspen, racked up average health costs per person of $4,500 in 2012. A group of employers there has banded together to try to cut costs. Initial studies of past health expenses for area employees show people there do great when it comes to cardiovascular health and preventing diseases related to obesity. Most are physically active and try to take good care of themselves. But devotion to outdoor adventures means they’re hard on their bodies. Costly orthopedic problems are common, says Martie Edwards, interim executive director for the newly created Valley Health Alliance.

In addition, part-time Aspen residents may use their Aspen addresses if they get hurt during stays in Colorado. Costs for all people are based on every resident who seeks care in a region. Wealthy part-time residents who seek expensive treatments in Colorado and list Aspen addresses may be bumping up the area’s health costs as well.

Pueblo and rural counties throughout Colorado round out a list of the top 10 most expensive counties, according to the claims database. By comparison, the least expensive county was Denver, where average annual health costs per person in 2012 were $1,750.

These rankings include costs for publicly funded Medicaid patients as well as people with private health insurance. And Medicaid reimbursements are much more comparable, tightly regulated and lower throughout the state.

If you remove Medicaid data and consider only people who have private health insurance, the patients who generated the highest costs also lived in resort and rural areas. Patients with the highest costs per person according to 2012 data — the newest available — lived in Jackson, Mineral, Baca, Pitkin, Las Animas, Costilla, Logan, Summit, Chaffee and Eagle counties.

“The data show that care is more expensive in the mountains,” said Jonathan Mathieu, director of data and research for the Center for Improving Value in Health Care, the group that manages Colorado’s All Payer Claims Database. “We need to better understand the reasons for that.”

In contrast to ski resort areas and rural, mountainous counties, the places with the lowest average health costs per person included plains counties such as Kiowa, Cheyenne and Washington along with urban population centers in Denver, Boulder and El Paso counties.

Insurrection brewing over disparate health costs

As new reforms under the Affordable Care Act sweep into effect across the country, costs have become a critical concern. For the first time, customers can compare how much they would pay for health insurance if they lived in less expensive parts of the U.S. or in different regions of Colorado.

And it’s making some of them furious.

Residents in Colorado ski resort areas, who face the highest health costs in the state, want more affordable insurance rates. In Summit County, irate residents confronted Colorado Insurance Commissioner Marguerite Salazar when she met with them in early December to explain Colorado’s geographic rating areas. Angry over medical monopolies in their community that have driven their insurance costs up two and three times as much as people living in nearby Park County or in urban centers like Denver, many begged for a reprieve. (Click here to see a map and list of the rating areas.) And click here to read ‘Don’t give up,’ commissioner urges angry ski resort residents.

U.S. Rep. Jared Polis, D-Boulder, who represents Summit County, has asked for waivers so residents there won’t face tax penalties if they skip buying insurance this year. (Click here to read Polis fights sky-high rates as ski town sign-ups stall.)

Meanwhile, a mutiny is brewing in Garfield County, where county leaders are demanding a meeting with the governor. They want lower health insurance rates for county residents immediately.

Salazar, the insurance commissioner, has repeatedly said that she can’t change any rates this year, but she’s in the midst of proposing a new system for next year that will impact rates for every Coloradan who buys insurance through the exchange.

Data from the All Payer Claims Database show that Garfield County residents are entitled to be angry since they were grouped with the priciest resort areas for insurance rates for this year while historic health costs in Garfield County have been lower than nearby Pitkin, Eagle and Summit counties. Garfield ranked 18^th most expensive among Colorado’s 64 counties for per-person average health costs in 2012 compared to Pitkin at fourth most expensive, Summit at ninth and Eagle at 11^th. The three counties with the highest costs for patients with private health insurance in 2012 — Jackson, Mineral and Baca — all landed in rating areas where they pay less than Garfield County, even though their historic costs were higher. (Click here to see a chart showing comparisons of individual premiums for 2014 in various regions of the state.)

Equal rates across state would obscure high costs

Late last year, Gov. John Hickenlooper floated the idea of a single rating area for the entire state.

The governor’s senior policy advisor for health, Katherine Blair, said Hickenlooper suggested a single zone before aides had briefed him on the potential impacts.

“If we just did one statewide rating area and got rid of all the regions, it would drive some people’s health costs up about 40 to 50 percent,” Blair said during a health forum on Tuesday. “We all pay different rates because our costs are different.”

Hikes in health insurance rates in areas where they’ve been historically lower would also prompt fewer people to buy coverage, Blair said. That in turn could increase the rate of uninsured people. People without insurance tend to postpone care and, if they get desperate, seek it in the most expensive place: hospital emergency departments. That increases costs for everyone else.

For a variety of reasons, Hickenlooper will not recommend a single rating area, Blair said.

It’s difficult that consumers in some parts of the state are now so angry about what they’re paying. At the same time, that anger could fuel change.

New transparency under the Affordable Care Act is both a blessing and a curse, Blair said.

“Overnight we went from having zero transparency to having a problem that we don’t have the regulatory tools to solve,” she said. “At the heart of insurance pricing is a difference in health care costs across the state.”

Pressure is on to do something about it “yesterday,” Blair said.

“It’s a very huge challenge.”

Indeed, experts on health economics say the only way to drive costs down is to make consumers more aware of how much they’re paying and why. Then they can make noise and demand lower costs.

The noise is revving up.

Jim Markuson of Glenwood Springs traveled to Denver to speak at a recent meeting of the Connect for Health board.

“I don’t think a day has gone by when I haven’t heard from someone who hasn’t been able to afford health insurance,” Markuson told board members.

He said residents there are very angry that they’ve been grouped with higher-cost counties when their historic costs are lower.

“That has resulted in very high, unfavorable insurance rates,” Markuson said. “It certainly appears that the methodology (for determining rates) is flawed.”

A single rating area for the entire state would bring costs down for some people. But it also would further obscure higher costs in traditionally expensive counties and people who live in lower cost areas would get stuck paying more.

Steve ErkenBrack is president of the nonprofit health insurance carrier Rocky Mountain Health Plans and a board member for Connect for Health Colorado.

“The key word is transparency,” ErkenBrack said during a recent health panel on health reform. (Click here to read more: Key players assess ACA implementation in Colorado so far.)

ErkenBrack told the story of a surgeon who was the lone specialist with his particular skills in a rural area of Colorado. The doctor wanted to charge a whopping 1,200 percent of Medicare rates for his services. ErkenBrack said he’d have much more power to negotiate with a provider like that if consumers knew who was driving up their health costs and precisely why.

ErkenBrack said the All Payer Claims Database is critical “so consumers can see” what the cost differences are.

“The temptation is to say, ‘Create a waiver,’ to equalize” costs around the state

“But think about what drives higher costs,” ErkenBrack said.

“If we equalize (costs) across the state, we’re not able to negotiate.”

ErkenBrack said physicians certainly deserve to be paid good wages for their skills, but they also shouldn’t be able to gouge patients or employers. Awareness about health costs will only improve if customers start paying attention to what they’re paying.

Aspen cracks down on costs

Aspen has faced a stubborn and embarrassing problem. It’s Colorado’s wealthiest community, but also boasts some of the highest rates of uninsured people in the state. (Click here to read Posh Aspen provides dismal health coverage.)

With historic health costs among the highest in the state, a group of the largest employers in the area — including the Aspen Skiing Company, Aspen Valley Hospital, the city, county and school district  — is now trying to study the problem and force costs down.

The group known as the Valley Health Alliance formed in 2012 and began by looking at three years of data about 4,300 people covered through the employers’ health plans, said Martie Edwards of the Alliance.

“We had to see where we were starting. That was a huge turning point. Up until then, we had gone in with the assumption that we were going to be identical to the nation as a whole,” Edwards said.

Across the U.S., the biggest drivers of health costs are obesity, high blood pressure, diabetes and related illnesses, tobacco use, lack of physical activity and depression.

The data in Aspen showed markedly different problems.

“The biggest (health cost) driver for our population was muscular skeletal issues — injuries, back pain, arthritis,” Edwards said.

“People really do hurt themselves more in Aspen because of the very active lifestyles. There are a lot of high achievers there and they don’t relish the opportunity as I would to put up my feet for a week if that’s what the doctor suggests,” said Edwards who lives in Grand Junction, where health costs are significantly lower.

She said the findings about health costs in Aspen made sense.

“At the same time, it was a surprise when it turned up,” Edwards said.

The analysis also showed that patients were getting many unnecessary MRIs and CT scans even though national guidelines did not recommend them.

For instance, doctors were routinely doing immediate MRIs for patients with possible concussions. In fact, national guidelines recommend waiting 24 hours.

“They weren’t wrong or harmful, but weren’t indicated by the national guidelines,” said Edwards, the former CEO of the Rifle hospital and a former administrator for a hospital system in New Mexico.

Treatment for knee pain was similar. Physical therapy can be far more helpful than imaging or surgery. But patients were often getting scans or surgeries instead.

The Alliance is now working on evidence-based care guidelines so doctors and other providers can follow them.

“They certainly weren’t kicking and screaming. There’s a general recognition that the way we’re doing things just can’t continue,” Edwards said.

The physicians’ biggest concern was possible lawsuits: If they don’t do the surgery for this patient, it is going to be seen as a refusal of care.

The Alliance resolved that issue by getting legal advice showing that if a community adopts standards of care based on evidence, patients and lawyers will not have a basis to sue.

The next step is the “so-called big fix,” attacking drivers of poor health before they make people sick. To accomplish that, Aspen has partnered with the Mayo Clinic. Aspen Valley Hospital is now one of 13 Mayo-affiliated hospitals across the country.

All 4,300 covered patients will get detailed health risk assessments through Mayo.

“Employees and families will be able to get advice and counseling straight from the Mayo Clinic about subjects like reducing blood glucose,” Edwards said.

The next step could come by spring of 2015. Patients could see Colorado-based health coaches who can help them make changes to improve their health. The coaching could include consultations with dieticians, for instance, if they need to lose weight or get diabetes symptoms under control.

“First we have to get the health assessments. If we see the big issues are nutrition-based, that’s where we’ll put the money,” Edwards said.

Employers will pay for the wellness programs if they can use them to bring overall health costs down.

“They are definitely taking a leap of faith. I think they’re going to see it pay off,” Edwards said.

High rates in small towns nothing new

Amy Downs has analyzed health costs extensively as the Colorado Health Institute’s senior director for policy and analysis.

One of the biggest challenges for small communities, Downs said, is that their hospitals have fewer customers to share overall expenses.

“There could be a lack of competition among hospitals and a huge amount of their costs are overhead,” Downs said.

In cities, many more people share hospital costs.

Smaller communities also sometimes struggle to keep enough providers. If people can’t get the primary care they need, sometimes they will seek care through more expensive avenues including hospitals emergency departments or specialists.

Downs said higher rates in remote parts of Colorado are nothing new.

“Rates have always been much higher. Now we have transparent data. People can see (that they’re paying more) and they’re upset about it. The idea is to get the market to react,” Downs said. “It will be interesting to see how all of this unfolds.”

If Colorado got rid of its geographic rating areas, Downs said the unintended consequence could be that insurance carriers might stop selling in high-cost areas altogether. Why would they want to sell plans in areas where they could not recoup their costs?

“They could say, ‘I just won’t go to Summit County. My competition isn’t going to go into the rural areas,’ ” she said.

One possible solution is that Colorado regulators could allow diverse geographic rates, but set caps on how high the most expensive rates could be. For instance, the Affordable Care Act allows insurance companies to charge higher fees for smokers or older patients, but sets a limit on how much more they can charge. Older people may have to pay up to three times as much as presumably healthier, younger people.

“States have the ability to put limits (on rates),” Downs said.

Consumer advocate Adam Fox said it’s clear that costs have always been higher in some parts of the state.

“The question is how much more expensive? What is really driving the costs as high as they are? Ultimately, the answer is we don’t really know. There’s not enough transparency to know what the contracts between insurance companies and providers look like,” said Fox, director of strategic engagement for the Colorado Consumer Health Initiative.

“In some areas with very few providers, the providers may have more leverage than the insurers to set prices,” Fox said.

“You also tend to have a population that skews a little older in some of the resort areas and they tend to be higher utilizers of care,” he said.

“Ultimately, it comes down to an issue of transparency and not really being able to see what the driving forces are behind these costs,” Fox said.

“There are some serious questions that need to be asked,” he said. “There is also some potential to strengthen some of Colorado’s review processes both for insurance rates and how insurers are trying to keep costs down.

“They’re ultimately going to have to do both: keep costs down and improve quality.”

Added Downs: “Hopefully we’re going to be armed with the information to do something.”