USE CASE: Cost Analysis of Alternative Payment Model

The Colorado Network is a community of healthcare delivery systems seeking optimum solutions to shared challenges and opportunities for its members and their communities to improve access to, and quality of, healthcare services, maximize economies of scale and effort, and to enhance the influence of its members through a coordinated effort. The hospitals and physicians in Craig, Steamboat Springs, Kremmling, Granby, Glenwood Springs, Montrose, Pagosa Springs, Alamosa, La Jara, Gunnison, Salida, Walsenburg, Trinidad, Lamar and Springfield all use The Colorado Network as their managed care department.

Project Summary: Colorado Network requested CO APCD on behalf of the San Luis Valley Medical Center to help inform negotiations surrounding certain procedures with a health plan. San Luis Valley Medical Center hoped to use CO APCD to evaluate how changes to the payment model proposed by the health plan would impact health care costs.

Benefit to Colorado:Knowing that they serve many uninsured patients as well as those without sufficient coverage, San Luis Valley Medical Center was unsure that their already low reimbursement rates and charity care expenses would make the proposed model financially viable. The analysis determined that the hospital’s pricing was in line with other rural facilities and, in some cases, lower. As a result, the health plan did not move forward with the capitated payment model. This benefited Coloradans by continuing access to low cost health care.