The Aspen City Council’s work session tonight will feature an update from members of the Valley Health Alliance.
The VHA is a six-member, employer-funded health insurance collective that provides coverage for all city employees and nearly 6,000 other workers in the valley. The presentation tonight will highlight the accomplishments of the partnership thus far, and lay out where the group hopes to go in the future, including offering health care benefits to the larger business community.
Members that pay into the collective along with the city are Aspen Skiing Co., Aspen Valley Hospital, Valley View Hospital, Pitkin County and Mountain Family Health Centers.
“The VHA was initially formed in 2011 by local leadership concerned about how to manage escalating health care costs, which included the city of Aspen,” wrote interim Assistant City Manager and Human Resources Director Alissa Farrell in a memorandum to council.
In 2014, VHA became a registered nonprofit. Executive Director Chris McDowell works with a board of representatives from each of the six employers, as well as area practitioners and a community member to steer the work plan for the organization. His role is to facilitate conversations with health providers who might be able to lower their costs to patients on the VHA health care plan. In exchange, providers are connected with the pool of patients, and can get support and data from the alliance to help efficiencies in their practice.
“It’s got to be sustainable, that’s why it’s been a struggle to find a solution,” McDowell said. “I think after all of this sowing, and planting, and fertilizing and watering, we are finally seeing the plant starting to spout and we are starting to see some real benefit to the community.”
From the beginning. the alliance has made preventive, patient-centered care the hallmark of their organization.
“If you invest 10 percent in primary care, you save 20 percent of the overall dollar,” McDowell said.
Each of the six employers that contribute to the nonprofit are self-funded, which means they basically serve as their employees’ health insurance companies by using their own budgets to pay for claims.
Jim Laing is chief human resources officer for Aspen Skiing Co., and serves as the VHA board chair. He said that while it comes with risk, there also is an immediate cost savings by operating in a self-funded model.
“The alternative is if you fully insure — buy insurance — then you have to pay to cover their big office buildings, and they want a risk factor and a profit factor,” Laing said. “So by being self-insured, costs are going up but there is a 15 to 20 percent savings right off the top.”
Other, smaller businesses in town do buy insurance from agencies to cover their employees, and are eager to instead join the VHA to reap the cost savings while providing higher quality care to their staff. In a survey of the area’s business chambers, 67 percent of respondents said they’d be interested in joining up with the VHA.
Dave Ressler, CEO of Aspen Valley Hospital and its representative on the VHA board, said affordable health insurance helps to ensure employee retention, which is a major issue in the employee marketplace as residents struggle to make ends meet among the high cost of living in the valley.
“There is a return on our investment as employers because our employees stick around a long time, and that may not be true in other markets,” Ressler said.
He, along with representatives from Valley View Hospital and Mountain Family Health Centers, serves as both the representative for health care practitioners and the liaison with businesses looking to lower costs. He said it is beneficial that all three institutions are public or not-for-profit entities, and so are more willing to open their books and reduce costs than a for-profit hospital might be.
“An important part of this is our ability as hospitals to be transparent with this group and talk about what [it takes] to support our services that we provide that we as a community enjoy and to be as efficient as we can,” Ressler said.
One of the primary benefits to the provider community is the aggregated data that VHA collects from employees and their families that use the coverage. That data identifies where the service shortfalls are. Unsurprisingly, in this valley there is increased demand for orthopedic specialists and behavioral health providers.
One of the goals of the VHA, though, is to encourage patients to first see a primary care provider before seeking out specialists. Having one concentrated expert for every patient helps reduce redundancies in office visits and medical tests, and can help when a bigger health issue is present.
The HR departments at the participating businesses have instituted incentives for their employees to obtain a primary care physician whom they visit annually for preventive care. Laing said that among his relatively healthy employees, that had not previously been the case.
“The irony is that everyone here thinks, ‘I did three bowl laps today; I’m healthy as an ox.’ But in our population, before we put in an incentive or a reward, about 50 percent of our employees could not identify their primary care physician,” he said.
Ressler said that anecdotally, he often hears an orthopedic surgeon or obstetrician referred to as someone’s “doctor.”
“They are used to going directly toward the specialist, and they might be missing the overall picture of their health by just treating their alignment of the moment,” he said.
Data collected from VHA patients have provided concrete evidence that preventive health, also called a “population health management model,” leads directly to savings. He said just parsing out cases of the common cold, there are significant savings to be had if more people used their doctor as their first stop.
“If we just had everyone go to the primary care doctor instead of the emergency room, in one year we’d save half-a-million dollars,” he said.
Farrell said the goal from the beginning of the alliance has been to use proven savings data to then expand health insurance offerings to more employers in the valley. It would look something like the Aspen Chamber Resort Association’s discounted ski pass for its membership.
Before that comes to fruition, however, doctors are already able to apply efficiencies they’ve learned through the VHA to the general population.
“We want to ensure we have best practices, and that we are all in this together, supporting each other, and helping each other build best practices within our wellness and health insurance plan designs. So then we have this proof of concept that we can then extrapolate out to the community,” Farrell said.
Nearing its first decade, the members of the VHA think they are onto something that soon will be ready to share.
“It’s a win win win,” Laing said. “It’s great for the valley patients, it’s great for the providers, and it’s good for the businesses.”