Colorado Democrat seeking to unravel the mystery of hospital costs
HB19-1001 would direct hospitals across the state to share things like staffing information, annual financial statements and uncompensated care costs.
January 14, 2019 at 6:00 am
Colorado sends about $2.9 billion annually in state and federal dollars to hospitals across the state, but the agency that regulates the hospitals doesn’t really know how it’s being spent.
Lawmakers from both parties have wanted to change that for years, but they could never agree on the details. Now, Democrats see their control of the statehouse as an opportunity to unravel some of health care’s mysteries as well as some of its costs.
“It’s like trying to put together a puzzle when you don’t have all the pieces,” Rep. Chris Kennedy, D-Lakewood, said.
The missing pieces make it hard for state regulators such as the Department of Health Care Policy and Financing to see whether payments for Medicaid, uncompensated care and hospital provider fees improve patient outcomes. The data the state has collected — for instance, that Colorado hospitals spend 33 percent more on construction and administrative costs per patient than the national average — tells Kennedy that perhaps those dollars are being spent in ways that contradict the goals of those state and federal programs.
Overall reimbursement from the state when compared to the cost per patient has increased 153 percent since 2009, according to a December 2018 report from the Colorado Healthcare Affordability and Sustainability Enterprise (formerly known as the hospital provider fee). During that same time the amount people with private insurance paid above the cost of their services increased by 63 percent.
“We have been pumping more and more money into the system, but the costs for patients have been going in the wrong direction,” Kennedy said.
He wants to figure out why that’s happening and hopefully lower the amount people with private insurance pay for hospital services by changing the financial reporting rules. HB19-1001, the first House bill of the 2019 legislative session, would direct hospitals across the state to share things such as staffing information, annual financial statements and uncompensated care costs. It’s scheduled for its first hearing Wednesday.
“If we give regulators the tools to do their jobs, the hope is they can be more effective,” Kennedy said.
Kennedy tried to pass a similar bill during the 2018 session, but it died in the Senate, where Republicans held a majority. Sen. Jim Smallwood, R-Parker, sponsored the 2018 bill, but he found himself backing away from it over differences with Democrats about how much financial data they really needed from the hospitals to get a clear picture.
“We’re coming dangerously close to government overreach,” Smallwood said. “The challenge is to strike the right balance. What is the right amount of government intervention to make sure taxpayer dollars are accounted for?”
He’s cautiously optimistic the two parties can strike that balance this year even though Democrats have majorities in both chambers and control of the governor’s office. Financial transparency for both patients and state regulators, Smallwood said, is one area of health care where there’s bipartisan agreement. Other potential places for common ground is the regulation of free-standing emergency rooms and increased transparency around billing.
“We need a clear picture of hospital costs and how they are spending their dollars if we want to hold hospitals accountable for how they are serving their communities,” said Adam Fox, Colorado Consumer Health Initiative’s director of strategic engagement. “Opacity in the system can really favor the industry and really take advantage of the consumer.”
A lot of the information Kennedy’s bill is trying to get at is already submitted to the Colorado Hospital Association. The association, which represents 110 hospitals and health systems throughout the state, did release a report in 2017 on the financial health of Colorado’s hospitals.
But Kennedy said they didn’t share certain data about individual hospitals that could help explain how the cost shifts vary from hospital to hospital.
“The association is monitoring the bill and working with Rep. Kennedy to insure bill language will operationally achieve the goal of providing greater financial transparency,” CHA spokesperson Julie Lonborg said.