The high cost of health insurance has made it nearly impossible for some small-business owners across Southwest Colorado to offer the benefit to employees, including Peter Schertz, co-owner of Maria’s Bookshop. But a new health care alliance is giving Schertz and others hope for an affordable solution.
“It represents a possibility for small businesses like ourselves to assist our employees with some reasonable health care insurance and that’s something that we have been unable to provide in the past,” Schertz said.
Since December, about 50 businesses representing about 4,740 employees have signed nonbinding letters of intent expressing interest in insurance plans Southwest Health Alliance is working on, said Monique DiGiorgio, executive director of Local First, a nonprofit helping to launch the new alliance.
Local governments representing Montezuma, Dolores, La Plata and San Juan counties also have expressed interest, and together, the public-private interests provided the basis for the alliance to begin negotiations with area hospitals, including Mercy Regional Medical Center, focused on lowering the cost of health insurance for both employees and employers, DiGiorgio said. The insurance plans based on newly negotiated prices could be on sale in January 2021.
Southwest Health Alliance is affiliated with Peak Health Alliance in Summit County, a group that lowered health insurance costs for people and businesses by about 20% by working directly with health care providers.
“I am very encouraged by how willing the hospitals are to partner with us right now,” said Tamara Pogue-Drangstveit, CEO of Peak Health Alliance.
A recent report on hospital profits in Colorado suggests the institutions might have room to negotiate. The report found hospitals in the state have seen their profits per patient discharged rise 280% since 2009. However, the report relied on aggregated data and did not include all Colorado hospitals.
Rural hospitals, also known as critical-access hospitals, such as Southwest Health System in Cortez, tend to be in different financial circumstances with lower profit margins, Pogue-Drangstveit said. But the alliance is still interested in working with Southwest Health System.
“We do recognize that they are a different situation, and we hope we can have meaningful conversations with them based on where they are,” she said.
Southwest Health System CEO Tony Sudduth said the hospital intends to pursue its own community insurance plan that would not involve a third party.
“This model will assure the continued availability of health care services within Montezuma County while addressing the need for reduced cost of insurance,” he said.
Mercy Regional Medical Center spokeswoman Sarah Silvernail said the hospital understands health care has become unaffordable for many and a solution will require cooperation from health providers as well as insurance carriers, employers and the state government to lower costs for consumers.
Peak Health Alliance reached an agreement to lower costs with a hospital similar to Mercy Regional Medical Center in Summit County that was also part of the Centura System, and Mercy is interested in achieving a similar success, Silvernail said.
“Mercy Regional Medical Center wants to be part of the solution,” she said in an email to The Durango Herald.
A solution could allow Maria’s Bookshop to offer health insurance for the first time in about 20 years, Schertz said, and could help other small businesses provide insurance.
The inability to offer health insurance puts Maria’s Bookshop and other small businesses at a competitive disadvantage when it comes to hiring employees in the tight labor market, he said.
“We lose employees or are unable to hire employees who go to larger companies,” Schertz said.
At Maria’s Bookshop, the business offers long-term managers a health insurance stipend, but he said it’s not enough to provide adequate coverage. The store also offers insurance through Aflac to employees, so if they are hurt and can’t work, they receive payment, he said.
East by Southwest owners Sergio and Hydi Verduzco said the ever-rising cost of insurance is a problem. The restaurant offers insurance to employees after they have worked for a set number of hours.
“A lot of them don’t sign up. Even though we cover half their premium, it’s still very expensive,” Sergio Verduzco said.
The business covers 50% of the premiums for employees, but it is not able to subsidize the cost of health insurance for family members of the employees, Hydi Verduzco said.
Sergio Verduzco said he has not yet expressed formal interest in the alliance, but he appreciates the intent behind the group.
“I definitely think this is a worthwhile effort,” he said.
In addition to lowering health insurance costs, Southwest Health Alliance is studying what types of insurance plans would be of highest interest for residents of Southwest Colorado. The Peak Health Alliance made mental health care a priority, so plans sold in Summit County allow residents to see a mental health care provider without having to pay toward their deductible, DiGiorgio said.
If residents in La Plata County have similar priorities – such as insurance for alternative therapies, like massage or chiropractic – the alliance would like to know, she said. The alliance is also interested in creative models for covering alternative therapy, she said.
Residents with ideas about plan design can email DiGiorgio at firstname.lastname@example.org.