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Where tourism brings pricey health care, locals fight back

Julie Appleby, Kaiser Health News on

Published in Health & Fitness

Colorado's ski resort areas in Summit County have a high cost of living, among the highest in the country. The people who visit these places -- Keystone, Breckenridge and Copper Mountain -- can afford it.

Many of those who live and work there can't, especially when they get sick.

In addition to expensive rent, they pay some of the steepest health insurance premiums in the nation. Hospital costs are also pricey, with most business generated by tourists, skiers and outdoors enthusiasts.

But locals may soon get a break after a group, fed up with the costs, negotiated a deal with the hospital system. The group, which came to be known as the Peak Health Alliance, expects to be able to offer its members premiums next year that are at least 20% less than current rates.

About 6,000 people, among them individuals as well as employees of local businesses and the county government, can buy coverage through the alliance, which cut a deal for a discount of about one-third off the local hospital's list prices (although at least one expert thinks they could have done a lot better).

"It wasn't for the faint of heart," said Tamara Drangstveit, who ran a county social services organization before becoming Peak's executive director and, effectively, one of the lead negotiators.

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Fed up with high hospital prices even after insurers' negotiated discount, more employers are cutting out insurance middlemen and engaging in what is known as "direct contracting" with medical providers. They cut their own deals.

Direct contracting is a hot topic among employers because they are "up in arms about insurers not keeping prices in check," said Chapin White, a Rand Corp. researcher who studies the tremendous variation in hospital prices. The citizens here in Colorado are taking the approach to the grassroots level.

What Peak did -- starting with painstakingly gathering data about exactly what hospitals in the region were being paid by insurers, employers and consumers -- might be an answer for some.

Such efforts may be helped by Congress, which is considering barring secrecy clauses in hospital and insurance contracts that can prevent employers from learning exactly how much insurers pay. The Trump administration is also considering proposals to require more public disclosure of negotiated hospital prices.

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