The Colorado Purchasing Alliance created an initiative that allows employers in the state to negotiate lower prices for healthcare services through a cash incentive, the Kaiser Family Foundation reported Nov. 2.
The goal of the alliance is to encourage employers and employees to make better choices and compel the state's health systems to cut their rates, according to the Kaiser Family Foundation.
The Colorado government is one of 12 employers in the alliance and will be the first to use the newly negotiated rates and consumer incentives.
Colorado employees have access to the Healthcare Bluebook, an online tool that ranks health providers by costs and quality using a color system. Providers in the top 25 percent for quality and costs are listed in green, providers in between are listed in yellow and the bottom 25 percent are listed in red.
Employees who go to green level providers in both the quality and cost categories are sent checks to help offset their copayments, coinsurance or deductible. If there is no copay, the employee can keep the extra money.
The reward program is available only to employees enrolled in the state's self-funded health plan, which operates through Cigna.
Healthcare Bluebook estimates employers save an average of $1,500 each time an enrolled member uses the online tool to choose a provider, the Kaiser Family Foundation reported.
The Colorado Purchasing Alliance analyzed the 10 most common outpatient procedures employer members paid for. It found that employers could cut their costs for those procedures in half by sending employees to ASCs instead of hospitals, prior to negotiating rates.
"Healthcare outcomes are not related to the price," Robert Smith, head of the Colorado Business Group on Health, said in the report. "You can pay twice as much for some of the worst health care at one facility, and then you can get some of the best health care at half the price at another facility 10 miles away."