Rep. Kennedy: Colorado can have health insurance that pays for quality, not quantity

Rep. Kennedy: Colorado can have health insurance that pays for quality, not quantity

In my nearly six years as a state representative, I’ve spent more time and energy on health-care reform than on any other topic. I’ve sponsored legislation to improve regulations of free-standing emergency rooms, require cost transparency from hospitals, implement a reinsurance program (which has saved consumers more than 20% on premiums in the individual market), and establish a board to set upper payment limits on prescription drugs. 

Rep. Chris Kennedy

I’ve also proudly supported the work of my colleagues on preventing surprise out-of-network bills, capping the price of insulin, establishing a standardized health insurance option, and more.

Though these efforts have done much to save people money and improve health outcomes, they all treat symptoms rather than curing the disease: A healthcare system that incentivizes a higher volume of services rather than a higher value of care.

I’m not the first person to notice this problem. From 2015-2019, Colorado’s State Innovation Model utilized federal grant funding to advance payment structures that reward quality outcomes rather than quantity of billable services. These kinds of payment models are commonly known as “value-based payments.”

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The State Innovation Model also was about integration — namely, the integration of behavioral and physical health care at 344 primary-care practices and four Community Mental Health Centers in the state.

The Hospital Transformation Program, created by a 2017 law, and the Primary Care Payment Reform Collaborative, created by a 2019 law, have also meaningfully advanced conversations about paying for value over volume.

In spring 2021, after the passage of the federal American Rescue Plan Act, Colorado House Speaker Alec Garnett encouraged my colleagues and me to think big about how we can use these one-time federal resources to meaningfully transform systems. Many of my colleagues are doing incredible work to transform behavioral health, housing, workforce development, and economic support programs in Colorado.

For me, it kept coming back to value and integration in healthcare. I remember lying awake in bed one night, my mind racing through possibilities, when I decided to get up sometime after midnight and write an initial proposal for what I called “State Innovation Model 2.0.” 

I know I’m not the only person to have thought of this idea or moniker, but my proposal included a new grant program to help primary-care practices integrate behavioral health services, and move toward value-based payments.

The theory was that the grants and technical assistance could help practices upgrade technology and change workflows. These improvements, in turn, would be sustained over the long term by the improved payment models, as care delivery became more efficient, health outcomes improved, and downstream costs caused by untreated conditions were avoided.

That idea is now the core of House Bill 22-1302, which appropriates $32M of American Rescue Plan Act funds to primary-care practice transformation grants and technical assistance programs.

As these ideas were developing, I began work on addressing another component of this problem: the conflicting requirements of health insurance plans. You see, many health insurance carriers have made progress on incorporating value-based payments into their contracts with primary-care providers.

But they all do it their own way, which leaves the average doctor’s office dealing with a different set of quality metrics and payment parameters for every insurance company. Can you imagine a doctor having to identify their patient’s insurance company before they could know which health outcomes would determine how they get paid? It makes no sense.

That’s why I’m sponsoring House Bill 22-1325 with Rep. Yadira Caraveo, a pediatrician who shares my commitment to transforming our healthcare system. The bill will require alignment of certain value-based payment parameters between insurance carriers . Alignment will reduce administrative cost and simplify the work of primary-care providers, allowing them to spend less time dealing with insurance companies and more time focusing on their patients.

I truly believe a healthcare system integrating physical and behavioral care, operating in a value-based payment environment, is the most significant thing we can do in Colorado to improve equity, outcomes, and value in our healthcare system. 

Together, these efforts build the foundation of a universal primary-care system in Colorado that will provide more efficient, whole-person care that will make people healthier, and save them money. They’ll be getting high-quality preventive care at the right time. And when there is a serious condition, it is likely to be caught earlier.

These are the kinds of transformations that go beyond treating symptoms of a broken system to actually start curing the disease.

Chris Kennedy represents District 23 in the Colorado House of Representatives.

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