Video: Changing purchaser strategies for controlling health care costs


Eli Kirshbaum


How are the payers in Colorado’s health care system using their power as purchasers to lower the overall cost of care in the state?

In this video of the “Changing purchaser strategies for controlling health care costs” panel from Wednesday’s 2021 Colorado State of Reform Health Policy Conference, hear from Kim Bimestefer, executive director of the Colorado Department of Health Care Policy and Financing (HCPF), Claire Brockbank, CEO of Peak Health Alliance, and Gregory Tung, PhD, associate professor at the Colorado School of Public Health, about some of the ways health care payers are leveraging their purchasing power.


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Bimestefer explained how HCPF — the largest payer in the state — uses initiatives like the Hospital Transformation Program to help reduce the cost of care not just for Medicaid but for commercial payers.

“[the Hospital Transformation Program is] pays [hospitals] with value-based payments to transform for the betterment of all Coloradans, not just Medicaid. We might pay them a value-based payment to shut down standalone emergency rooms because they’ve been proven to drive costs up, not down. We might pay them to add behavioral health beds, because that serves all Coloradans, not just Medicaid.”

Brockbank spoke about how Peak Health Alliance, a non-profit, locally-driven purchasing cooperative, is using its purchasing power to drive value and increase affordability for the communities it serves. In 2020, she said, Summit County residents who purchased health care through her organization saved around $2 million.

“In many ways, we are an alternative to what carriers have traditionally done in that we use a lot of data, we negotiate directly with providers, and our goal is very objective payment rates … The goal being that we are moving to a system that is not volume and fee-for-service-driven.”

Tung detailed some of the cost estimates the Colorado School of Public Health has done for the Health Care Cost Analysis Task force, established by HB 19-1176. Through their research, Tung and his colleagues estimated the total cost of health care in Colorado to be $38.3 billion.

“We now have a working micro-simulation model of Colorado. We’ve put a lot of time and energy into generating this microsimulation, generating a data set that is demographically representative of Colorado, that has medical and health expenditures that are representative of Colorado itself, and that is a model that can be used in the future when we think about significant reforms or innovations that can be introduced.”