Weekly Policy Update: Health Care Stakeholders Convene to Discuss Total Cost of Care Legislation
By: Colorado BioScience Association Date: 02/21/2020
At a stakeholder meeting on Tuesday the Colorado Hospital Association walked through their draft proposal for a total cost of care model in Colorado. Based on programs already operating in Oregon and Massachusetts, the proposal would set up an independent commission that is charged with setting a target to limit how much health care spending in the state can grow each year. The idea of this model is that each segment of the health care system would be allowed to develop and execute their own strategies to achieve the target.
How would it work?
After analyzing the state’s health care data and examining economic factors and risk-adjustment factors that are unique to communities and populations, the Commission would determine the benchmark growth rate for how much health care spending can grow over the next year. That target growth rate would apply to the state as a whole and to every health care entity in the system.
After setting the benchmark growth rate, the Commission would then be tasked with measuring and reporting on health care growth.
If a health care entity were to exceed the annual growth rate target, the Commission would have the authority to execute a two-phase process. First, the Commission would hold a private meeting with the entity about why they exceeded the target. Then, if those conversations are not sufficient, the Commission could hold public hearings and institute a formal performance improvement plan.
Proponents of the legislation argue that this model gives every stakeholder in the health care system something to work toward and instead of mandating prices, it gives stakeholders the flexibility to develop their own strategies to reduce health care costs.
What happens next?
The hospital association has made it clear that they are advocating for this legislation as an alternative to the public option, which would likely give regulators the ability to tell hospitals how much they can charge those covered in that market. What is less clear is which proposals will make it through the legislature. Both the public option and total cost of care bills are still in the drafting stage, and the paths forward are not certain.
CBSA is evaluating the total cost of care proposal released this week and soliciting feedback from our members. If you have any questions or comments, please contact CBSA Vice President Emily Roberts.
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