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Southwest Health Alliance starting negotiations to bring health care costs down

Group raising additional start-up funds
The Southwest Health Alliance expects to start negotiating pricing for health care services with health providers in coming weeks. The alliance was formed to help lower the cost of care for businesses and individuals.

Health insurance premiums in Southwest Colorado can rival a mortgage payment, but the recently formed Southwest Health Alliance expects to start negotiations with health care providers in coming weeks to lower costs.

The Southwest Health Alliance formed earlier this year to implement a model pioneered by 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.

Southwest Health Alliance aims to lower health care premiums by 5% to 10% for residents across a five-county region, said Monique DiGiorgio, executive director of Local First, a nonprofit working on the new alliance. Plans for residents in Southwest Colorado could be sold by insurance companies starting in January 2021.

“We now have a solution that affects every single individual,” DiGiorgio said during a Durango Chamber of Commerce event Thursday at the DoubleTree Hotel.

When a community directly negotiates standard prices for services, such as MRIs, with health care providers, people can achieve substantially more savings than insurance companies, said Nannette Penz-Reuter, insurance professional and Southwest Health Alliance steering committee member.

“This is very unique not only in Colorado, but in the country,” she said.

Medical services generally have associated “billed charges,” but no one pays those prices, she said. Instead, insurance companies agree to pay a percentage of the “billed charge,” she said.

Insurance companies can negotiate to pay lower percentages of the “billed charges,” but it doesn’t matter if the charges continue to go up, she said.

To start negotiations with health care providers, Southwest Health Alliance is gathering letters of intent from employers and people who may be interested in purchasing insurance plans that will have newly negotiated rates.

The alliance hopes to gather enough non-binding letters to show that between 8,000 to 10,000 individuals could be covered by the new plans, DiGiorgio said. Letters are due by the end of the year.

Health care providers can offer lower prices if insurance plans help steer more residents toward their services, Penz-Reuter said.

Early next year, Southwest Health Alliance plans to work with the community to help determine how health insurance plans could work. For example, residents in Summit County prioritized mental health care and ensured it would be covered in their new plans, DiGiorgio said.

The region Southwest Health Alliance will serve is yet to be determined. The group is interested in serving La Plata, Archuleta, Montezuma, San Juan and Dolores counties, DiGiorgio said. Thus far, La Plata, San Juan and Dolores counties have expressed interest, she said.

The alliance is also working to raise about $70,000 to cover start-up costs, DiGiorgio said. The alliance hopes to raise about $35,000 before the end of the year, she said.

During Wednesday’s meeting, the Bank of Colorado donated $10,000 to the alliance.

The bank’s regional president, Greg Behn, said he saw the alliance’s potential to lower costs and allow more people to purchase insurance.

“This is one of the highest focus areas I think we can have in our community,” he said.

mshinn@durangoherald.com

On the Net

For more information about the Southwest Health Alliance, visit

foundation.local-first.org/health-care

.

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