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Peak Health Alliance, a health care purchasing cooperative created in Summit County in 2018 after it had one of the highest average health care costs in the nation, is looking to expand to Routt County.
In a meeting with Routt County commissioners last week, Peak’s CEO Claire Brockbank said the group’s members in seven Colorado counties would save an estimated $7 million on premiums this year, with some counties seeing rate reductions of about 38%.
“For the first time this year, Region 9 in Colorado, which includes you guys, is not the most expensive in the state,” Brockbank said. “And I would say that is because of us.”
Brockbank said each of the counties Peak is operating in saw rate reductions in 2021, when looking at rates on the individual marketplace. Routt County saw premiums decrease this year as well, but Brockbank said she anticipates that to change next year, with some plans on the individual marketplace facing increases as high as 18%.
Peak is a nonprofit, member-owned cooperative that looks to use the negotiation power of a community and data they say helps them find inefficiencies in the local health care system to lower costs for residents and businesses.
“The health insurance industry has their lobbyists and people advocating for the health insurance agency. The providers, the hospital and doctors have their lobbyists and people advocating for them,” said Grand County Commissioner Richard Cimino, who also sits on the board of Peak. “The general public doesn’t have anybody advocating for them except the Peak health purchasing alliance. This is really that third leg that makes the whole system work.”
Typically, insurers would negotiate prices with hospitals and other providers. The insurer then sets the price people will pay for the care and employers and individuals enroll in the plan. Brockback said she believes this system doesn’t serve insurance consumers well.
Peak’s model works to get community support — the phase Peak is in with Routt County right now — collect and analyze claims data and then negotiate their own rates with hospitals and providers. They then take these fee schedules to solicit bids with carriers to offer a Peak-designated plan with lower premiums.
But while the savings sound promising, Peak has not been well received by everyone, with some — mainly providers and insurance carriers — criticizing what they see as an adversarial model. When Peak tried to enter Garfield County earlier this year, the deal ultimately failed because both local hospitals opted not to participate.
People with Peak plans in Southwest Colorado are forced to go to Durango because the local Cortez hospital didn’t what to work with Peak either. Brockbank said people still bought the plans because of the premium savings.
Brockbank said she met with UCHealth Yampa Valley Medical Center President Soniya Fidler last week, and the meeting went well. But without the hospital’s partnership, Brockbank said it would be difficult for Peak to enter Routt County.
“It is pretty difficult, that is what happened in Garfield ” Brockbank said. “If the hospital is going to be completely negative and say, ‘over my dead body,’ that is a factor that you have to take into account.”
For Peak to work with opposition like they faced in Garfield County, Brockbank said it would have to get “ugly.” Toward the end of that negotiation, she said local hospitals wouldn’t take a meeting with Garfield County commissioners working with Peak.
“UCHealth and Yampa Valley Medical Center have been working to reduce prices and insurance premiums, and we currently offer some of the lowest prices among hospitals in the Colorado mountains,” said Fidler in an email.
Fidler did not directly answer whether the hospital is supportive of Peak coming to Routt County or not. She said they partnered with Anthem Blue Cross Blue Shield in 2019 to offer more affordable plans and has encouraged Cigna to bring a new plan to the local market, though that has not happened yet.
“I appreciate the conversation with Peak Health Alliance last week, as we both want patients to have access to affordable health care coverage,” Fidler said. “We would like to see more insurance plan competition in the Steamboat Springs community, and UCHealth is currently exploring additional possibilities.”
Brockbank said UCHealth already participates with Peak with plans it offers in other counties.
When Peak came to Grand County this year, Cimino said the county saved about a million dollars on its own self-insurance program for county employees. Routt County, the city of Steamboat Springs and other local employers also use self-insurance programs.
Brockbank said the reason health care is expensive can vary in different communities. In Grand County, costs were high because all but 8% of the care residents received was outside the county but was spread out making it more difficult for local insurers to negotiate prices with all providers, she said.
But in Summit County, Brockbank said they found emergency rooms were being paid about 850% of the Medicare reimbursement rate.
Brockbank said she has not yet dug deep into data for Routt County but recognizes YVMC has done a lot to try to lower costs locally.
Peak wouldn’t be able to enter the Routt County market next year, but if successful, likely would offer plans in 2023.
County commissioners do not need to participate for Peak to enter Routt County, but they have signaled they will explore helping build community support for the program. On Monday, commissioners brainstormed who might serve on a steering committee that would help Peak build local support and try to get local employers on board.
“We want to go in and aggregate the demand. Instead of us, say Routt County, negotiating with providers, it’s Routt County, Steamboat Springs School District, the city of Steamboat, Ski Corp.,” said Commissioner Tim Corrigan. “We put together, say 60% of all the health care demand in Routt County, and we’re a group and we’re negotiating with you.”
To reach Dylan Anderson, call 970-871-4247 or email danderson@SteamboatPilot.com.
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