Opponents’ study says Colorado public option could shutter hospitals

By Joey Bunch
Colorado Politics
January 7, 2020

The day before the General Assembly convenes, a study by a consulting firm for an advocacy organization indicates a public option insurance program might not be good solution.

Lawmakers are expected to work on a public-private insurance competitor to help create competition and pull down rates, but opponents — especially hospitals — says its price caps and other measures could harm access to health care and cost jobs in the industry.

The study released Tuesday by FTI Consulting Inc. and Colorado’s Health Care Future claims the proposal would have “sweeping negative consequences,” including putting up to 23 rural hospitals at risk and 83% of Colorado hospitals would see a reduction in reimbursements.

FTI Consulting analyzed reimbursements to Colorado hospitals and estimated the impact of rate-setting measures to predict the reduction or elimination of hospital services.

“The likely response to financial pressures resulting from insufficient payment rates depends in large part upon the overall financial health of the hospital and its ability to shift costs to other payors,” the report states. “Hospitals in areas like Alamosa County, where fewer than 20% of patients are covered by commercial insurance, would be left with few options and could be forced to eliminate services, close facilities or lay off workers.

“Such measures have direct implications for access to care in underserved areas.”

The proposal, however, does little to reduce the number of uninsured people in Colorado, though Democrats’ main purpose is to reduce costs for health care, which are among the highest in the country.