Cash for colonoscopies: Colorado tries to lower health costs through incentives

State employees in Colorado are being asked to be better consumers when shopping for health care services. And if they choose lower-cost and higher-quality providers, they could get a check in the mail for a portion of the savings.

It’s part of an initiative known as the Colorado Purchasing Alliance, through which employers in the state are banding together to negotiate lower prices for health care services. The state government is one of 12 employers that have agreed to join the alliance and will be the first to use the newly negotiated rates and consumer incentives.

The goal is to disrupt what’s considered a dysfunctional market for health care by encouraging employers and employees to make better choices and forcing health systems in the state — which have some of the highest prices and profits in the country — to cut their rates.

Since July 1, state employees have had access to the Healthcare Bluebook, which is an online tool, owned by a health data company of the same name, that ranks health providers by both costs and quality. Providers in the top 25% for quality are designated in green, the bottom 25% in red, and anyone in between in yellow. The same color scale is used for costs.

“If you go to a green-green provider, then we’ll send you a check,” said Josh Benn, director of employee benefits contracts for the Colorado government.

The checks can range from less than $50 for something like a mammogram to thousands of dollars for surgery. In most cases, the money helps offset the employee’s copayments, coinsurance, or deductible. But for preventive services like colonoscopies, which have no copay, it’s extra cash in the employee’s pocket.

The reward program is available only to employees who choose the state’s self-funded health plan, which is administered through Cigna, not the Kaiser Permanente option, which has a closed network of providers. Of the nearly 20,000 people, both employees and family members, on the Cigna plan, more than 1,200 used the tool in the first six weeks, conducting 4,500 searches.

“We could cut the network to the bone and really limit choice, but part of what I want to do is encourage people to make better decisions,” Benn said. “There are ways to curb health care spending without harming employees.”

Although it’s too early to tell how much the state will save through the program, Healthcare Bluebook estimates that employers save an average of $1,500 every time an enrolled member uses the online tool to choose a provider.

“And you wind up with fewer complications and sick days,” Benn said.

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