Q&A: Rocky Mountain Health Plans CEO Patrick Gordon on reinsurance, health equity, and more
Patrick Gordon is the president and CEO of Rocky Mountain Health Plans (RMHP), a Colorado subsidiary of UnitedHealth Group. RMHP has operated in Colorado for nearly 50 years and consists of 255,110 enrollees and 21,506 providers.
In this Q&A with State of Reform, Gordon shared RMHP’s perspective on issues including the foggy landscape of Colorado’s reinsurance program, whether to increase insurance access through value-based or fee-for-service models, and the impact of Colorado’s special enrollment period on coverage.
Eli Kirshbaum: According to the Colorado Health Institute, RMHP HMO enrollees experienced a 33.5% decrease in premiums from in 2020 compared to 2019. How is RMHP preparing for the reinsurance program’s uncertain future?
Patrick Gordon: “Our experience with reinsurance has been positive. We think it’s been a good thing. It has reduced premiums, as intended. There is, of course, a complicating factor with how the individual market subsidy for premiums fluctuates with the top line premiums. But anything that brings down premiums is generally good in the direction of affordability, and we experienced very significant relief in 2020.
In 2021, changes were made that effectively reduced the level of reinsurance. But it’s still having a strong impact, and so we think it’s an important part of any affordability strategy. As you noted, getting it to stable, secure, predictable funding is key, and there [is] a mix of options on the table — provider assessments, health insurer assessments and federal funds — we can’t be in a place where the level of reinsurance funding, and then, the premiums, fluctuate wildly from year to year because the financing isn’t stable. So we need to find an equitable solution.”
EK: Health plans have been consistent adversaries of the Colorado Option legislation this session. Policy solutions like reinsurance have been offered as alternatives, but analysis has raised questions about the program’s sustainability, suggesting it doesn’t address the root cause of high premiums: the high cost of health care services. Why do you think the Colorado Option wouldn’t be the best solution to this?
PG: “Personally, I don’t think that reinsurance and an affordability strategy in public policy are an alternative. They are complements. I think we need both. We need a sustainable reinsurance policy, and we also need a smart affordability policy. There’s no disagreement … about the need for improved affordability in health care and the role of public policy in figuring that out. I think it’s just really the ‘how.’ That’s the source of the debate, at least from the standpoint of our own organization.
I think that there absolutely is a need for greater transparency and greater oversight of the overall rating process, including the inputs to rating, which is the cost to health care… but in terms of how the program rolls out, setting clear expectations is important. The concern we have is, first, will the public policy disregard the high-value additional options that are already available in both the group and individual markets? There may not be a lot of uptake in those on a statewide basis, but they’re there. They’ve created significant improvements in our own plan. In western Colorado, which is a very challenging market to serve, our 2021 premiums are 15% lower than they were in 2020, even though the level of reinsurance was lower. That outcome is predicated on close provider cooperation, population health management, thoughtful network management — all of that creates value, and, in our case, in 2021, it created more offerings.
The concern we have is that if existing models like that are not reflective of the public policy, and we’re just sort of subjected to very extreme targets over a very short period of time, we could lose the ground we’ve gained in putting those things together.
The public option, of course, is dependent on the creation of an essential benefit plan. And that makes sense, you need some sort of essential or standardized benefit plan to benchmark the pricing for the affordability process. The problem is, will that benefit plan in fact be richer than what’s already offered in the market? If so, fine. If that’s the direction of public policy [and] the will of the voters, great. But, more benefits will increase costs, not decrease costs. So you can’t, on one hand, necessarily talk about affordability in absolute terms while you’re enriching benefits. There’s going to be a lot of focus and energy there and we have concern about how that will play out.
The other piece is networks. And the value-based models that already exist in the market and already operated a significant premium differential because of lower-cost health care and higher performing health care, those models are not necessarily opened, statewide, PPO network-type options with every single provider included. So if the idea is that we’re going to get to affordability with high-performing networks, that’s one thing. If we’re going to get to affordability with open, any-willing-provider-type models, that’s different. And there’s a big gap in expectations there with respect to what’s been put in front of the voters and consumers.”
EK: One of the main goals of the Colorado Option is to increase the coverage options for rural Coloradans, who often only have one available coverage option — and thus higher premiums due to a lack of competition. Is RMHP planning on expanding to rural areas of the state, such as Avon, that currently only have access to one insurance carrier? Why or why not? Do you plan on incentivizing hospitals to accept plans in areas where there currently aren’t any?
PG: “The short answer is yes. Yes, we have already done that, and yes we intend to continue to expand. So in 2021, our organization … added 13 counties in rating region 9 that were previously one carrier only. There were some other carrier entrants that expanded options in a few places, but if you just simply compare 2020 to 2021, you’ll see that there’s a dramatically lower number of one-carrier counties in Colorado than there were before. And that had nothing to do with the public option. That had to do with the market, and frankly, the maturation of the market, and the fact that public policy has been helpful with respect to things like reinsurance. So those are the facts for 2021.
For 2022, even though there’s quite a lot of concern and uncertainty with respect to public policy, we plan to expand further. And the basis of those expansions are, at least in our case, pretty straightforward. It’s the growing interest and competence of provider partners in collaborating on affordability projects. So where we’ve been able to offer expansions, we’ve received new consideration from providers, certainly new pricing that has made it possible for us to overcome the inertia that was there before.
More importantly, though, it’s not just about price. It’s about the overall value. And there’s a value-based total cost strategy in place with all of those new provider partnerships, where over the long run we’re confident that we have the relationships and structure in place that will — once the short-term impact of pricing changes [has] passed — produce value on an ongoing basis.
Each community is unique. Some providers are certainly feeling pressure in the direction of overall public policy around affordability, and that’s been perhaps the driving force. They’re also feeling increased accountability from their communities, whether or not those communities are participating in anything like a purchasing cooperative, even in areas where there has been no such thing as a purchasing cooperative, large providers have come under incredible pressure from community leaders to bring prices under control and to bring costs under control.
But again, there’s nothing that’s forcing anybody to the table at this point, yet folks are coming to the table. And that’s been the basis of the expansions we’ve been able to do in places like region 9, and the expansions we have planned ahead.
When it comes to rural [communities], not all rural [communities are] created equal, and there are some very challenged communities where the payer mix is very unfavorable. There’s not a lot of opportunity for margin for the provider to perform a critical access function. And they’re generally kind of hanging by a thread. I think everybody recognizes how important it is to support those providers in a healthy way. I know that in multiple iterations of conversations around the state’s affordability policy, the administration and the proponents have gone out of their way to say that there’ll be special consideration for rural providers that meet those criteria, and we certainly see that in this bill [the Colorado Option]. But there’s a whole other set of challenges that needs to be addressed that isn’t necessarily addressed in this public policy. Carving them out from price mandates or participation mandates is a small start. There’s a lot more to be done to make sure that we get a rural hospital strategy in place that actually works.”
EK: How effective has Colorado’s open enrollment period been at increasing coverage?
PG: “We think it’s been a good thing. We have seen additional people coming for coverage. People have the option to get covered, so our membership has grown as a result of the policies that have been put in place, and it’s been stable growth. So it’s open enrollment, but the growth has been organic. You haven’t seen huge amounts of churn, for example between Medicaid and the exchange, or even among the carriers. People seem to be making their choices and sticking with them, but more are coming on overall, and that’s been a good thing.”
Even though, from a technical standpoint, health insurers can be concerned about special election periods and what kind of selection risk is coming along with that, that hasn’t been our experience … it’s been a positive thing, and we’re very supportive of that.”
EK: What is RMHP doing to ensure it takes health disparities concerning race, income and geography into account when offering services?
PG: “That is a top priority for us. And it really runs across all the programs and coverage types we offer. One example that I would point out is within our Medicaid program, where providers are really challenged to serve people overall at the reimbursements that are available, we have made additional diagnostic and demographic adjustments to payment to increase reimbursement to providers who are serving people of color and other disenfranchised and disadvantaged populations in our membership. We have the data to do that and the flexibility to do that, we’ve got support from the state Department of Health Care Policy and Financing in that direction, and it’s been exciting to actually see these things come together.
It’s really just a function of awareness and putting that awareness into action. But that’s one small example of changes we’re trying to make as an organization to make sure that there’s better access to care for disadvantaged populations and that providers who serve those populations receive additional support, above and beyond the sort of vanilla, fee-for-service-type reimbursement.”
This interview was edited for clarity and length.