Coloradans cannot turn on the television without coming face to face with the health care reform debate in Washington. But with so many conflicting messages from different interest groups, it is hard to know what to believe.
Over the past year, the New America Foundation, along with the Center for Colorado’s Economic Future at the University of Denver, conducted a study called The Future of Colorado Health Care. Its purpose was to make sense of the chatter and to answer one fundamental question: Do the economic benefits of health care reform in Colorado outweigh the costs? The answer, we determined, is yes.
Even after accounting for the economic cost of financing reform, this new study demonstrates that it will pay off for Coloradans to expand health coverage and improve the way that care is delivered.
Health care reform will stimulate the economy and create jobs. After considering the taxes necessary to finance reform, we found that expanding coverage to all Coloradans would lead to $3.8 billion in new economic output and 23,319 jobs. This is because a $1 investment in health insurance coverage leads to more than $1 in new economic activity.
For example, as doctors provide care to more patients, they will buy more medical supplies. This will translate into increased economic activity in the medical supply industry, as well as in health and non-health related industries that supply goods to the medical supply industry. In addition, expanding coverage would help lower-income Coloradans pay for health care, allowing individuals to spend more of their money on other goods and services in the economy.
The study also demonstrated that businesses and families will spend less on health insurance with reform than they would without it, if we also change the way we both deliver and pay for health care services. Reforming the health care delivery system in order to improve the quality of patient care and control costs could yield between $11 billion and $38 billion in additional savings. Translation: Premiums could be 5.5 percent to 17 percent lower than they will be without improvements to the way health care services are provided.
Thanks to public and private collaborative initiatives, Colorado is one of the states best positioned to move forward with health care delivery system reforms and coverage expansion necessary to both increase access to care and help bend the cost curve. In particular, Colorado is leading the way to a more sustainable health care system through integrated systems like Denver Health and cooperative communities like Grand Junction.
Denver Health uses technology and efficient care practices to deliver high quality, coordinated care to some of the state’s most vulnerable populations. Meanwhile, Grand Junction capitalizes on its collaborative spirit to align incentives among providers, fostering a culture of coordination and team-based care that delivers some of the lowest-cost, highest-quality care in the country. In short, Colorado is blessed with leadership at many levels that proves our nation can deliver better care for less.
With reform, more insured Coloradans will reduce the costs hospitals must shift to businesses to compensate for the unpaid bills of the uninsured, and a more efficient delivery system will slow the rate of health care cost growth. In total, comprehensive health care reform in Colorado could make employer-sponsored insurance premiums significantly lower — by as much as 24.8 percent — than they would otherwise be in 2019.
Health reform is certainly a shared responsibility. Colorado is poised to lead the way, if its leaders and people are willing to invest in the most effective ways. Although health care reform certainly requires an upfront investment, the commitment pays economic dividends down the road.
Len Nichols directs the health policy program at the New America Foundation, a nonprofit, nonpartisan public policy institutein Washington, D.C.
