Are Colorado’s Crafty Healthcare Incentives an Effective Strategy to Lower State Care Costs?

Colorado has some of the most expensive healthcare in the U.S., which already spends more than any other country on administering healthcare. Some studies place it in the top half of most expensive states for care in the U.S., while others place it in the top 10. In 2018, for example, Colorado’s average price per patient was 22.8% higher than the U.S. national media. Regardless, it’s fair to say that the state is in need of creative solutions to lower cost of care without discouraging patients from seeking treatment. Could healthcare incentives do the trick?

In a recent move to negotiate lower health care prices among employers including the state of Colorado itself, the Colorado Purchasing Alliance is aiming to launch healthcare incentives to motivate patients to seek care at low-cost but high-quality care centers. Effectively, Colorado employers are paying cash to employees (who are signed up for the state’s self-funded health plan) if they choose care that contributes to lowering overall costs of care across the state.

Patients are encouraged, through reward program checks, to choose providers ranked in the top 25% of quality while also in the top 25% of cost-effectiveness through the state’s Healthcare Bluebook. These healthcare incentives could be as little as $50 or as high as thousands of dollars if patients are undergoing surgery. Pretty enticing, no? Save the state money and make money in the process by getting better-than-average care? What’s not to love?

It’s worth weighing out, though, if this strategy is sustainable and actually effective at motivating patients to seek better care, cheaper care, and effectively lower cost of care across the state. Is it reasonable to find care that is both low-cost and top notch quality? Kevin Stevenson, seasoned health system administrator and host of “I Don’t Care” gives his take on the efficacy and efficiency of this healthcare incentives strategy.

Kevin’s Thoughts

“Understand that Colorado’s encouraging giving patients cash incentives to seek care at state-approved high-quality and low-cost providers to lower overall healthcare costs. I think from my perspective, the issue is, what is state approved?

I have a little bit of an issue with that just because sometimes the lowest-cost provider does not provide the highest quality. And this also can get in the way of the patient-physician relationship where the physician may prefer one facility because they know of the quality, they have good experience there, but all the patient may see is, ‘Hey, I’m getting some money back on this.’ So I think this opens the door for an interesting conundrum. I think it’s always great whenever patients can do their own research and look up the highest-quality providers.

But when you throw in the possibility of gaining some sort of a cash incentive, I think that may damage the overall relationship and could ultimately harm the patients. Just my thoughts on that.”

Follow us on social media for the latest updates in B2B!


clean energy wind turbines
Clean Energy Sets $1.1 Trillion Record That’s Bound to Be Broken
January 26, 2023

(Bloomberg) — Last year was a double milestone for decarbonizing the world’s energy system. It was the first year when investment in the energy transition equaled global investment in fossil fuels, according to the latest data release from clean energy research group BloombergNEF. The money flowing into the upstream, midstream and downstream segments of oil and gas, and […]

Read More
American Airlines airplane in terminal
American Airlines Sees Profit Above Estimates on Steady Demand
January 26, 2023

(Bloomberg) — American Airlines Group Inc. expects profit this year to exceed estimates following a slow start, as steady demand for air travel keeps an industry recovery going into 2023. Full-year adjusted earnings will be $2.50 to $3.50 a share, the Fort Worth, Texas-based carrier said in a statement Thursday that also detailed fourth-quarter results. […]

Read More
Chipotle workers making burrito
Chipotle Seeks to Hire 15,000 Workers Amid Tech Layoffs
January 26, 2023

(Bloomberg) — Chipotle Mexican Grill Inc. is adding 15,000 jobs across its North American locations — a sign that demand for restaurant food is robust despite high inflation and economic uncertainty. The burrito chain’s hiring push is meant to ensure its more than 3,000 US restaurants are fully staffed for the company’s busiest season, which […]

Read More