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Controlling Costs Through Payment Reform

While Colorado spends $30 billion in health care every year, costs continue to increase while value decreases. Yet, Colorado is better poised than many states to take on the challenge of improving health outcomes and stabilizing and/or decreasing costs due to its examples of structured, coordinated health care delivery systems (western slope and Denver Health, for example). A recent study by the New America Foundation and University of Denver’s Center for Colorado’s Economic Future concluded the following about Colorado’s opportunity for containing costs.

“...we conclude that delivery system reforms could yield between $11 and $38 billion in savings over the next decade in Colorado. This leaves $11 to $38 billion more to spend on other Colorado business, household, and governmental priorities. These dollars, like the resources spent on coverage expansion, will generate multiplier effects throughout the Colorado economy. In addition, these savings would lead to premiums that are 5.5 to 17 percent lower in 2019 than they would have otherwise been without delivery system reform. Again, federal reform (or more active federal involvement in state delivery system reform efforts, if federal reform fails) could lead to even greater savings.”7

Like many efforts underway in Colorado, reforming payment structures and other initiatives to contain costs must be approached in a collaborative spirit. As part of Gov. Ritter’s 2008 Building Blocks to Health Care Reform, the Center for Improving Value in Health Care (CIVHC) was formed to coordinate and advance such initiatives.  CIVHC is currently working with participants from all health care stakeholder groups on payment reform efforts.  CIVHC is also in the process of implementing a statewide All Payer Claims Database (APCD), and facilitating a newly created APCD Advisory Committee to guide the process.

7 New America Foundation and University of Denver’s Center for Colorado’s Economic Future, “The Future of Colorado Health Care: A preview to the forthcoming report on an economic analysis of health care reform and the impact on Colorado’s economy.” coloradohealth.org/studies.aspx
The Colorado Blueprint: Implementing Federal Health Care Reform DRAFT 11/08/10

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