Rising health insurance costs continue to put the squeeze on Routt County employers and their workers. With the ramifications of the Affordable Care Act still unclear, some business owners are working to stem the tide of costly premium increases for themselves and their employees.

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Rising health insurance costs continue to put the squeeze on Routt County employers and their workers. With the ramifications of the Affordable Care Act still unclear, some business owners are working to stem the tide of costly premium increases for themselves and their employees.

Routt County employers move to curb rising health insurance costs

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— When the steady hiss of the blood pressure gauge subsided last month, the results weren’t good.

Joy Clark’s blood pressure still was too high.

But the lead custodian at Soda Creek Elementary School didn’t appear too bothered by the reading.

The two clinicians evaluating Clark prescribed more medication and offered advice to get her blood pressure to a healthier level.

Clark left the office with a sense of relief — she had a plan of action, and it didn’t cost her any money.

“It really takes a lot of stress off of you,” Clark said in the Steamboat Springs School District’s new health and wellness clinic that opened in September for district employees.

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Clinician Milad Shah checks Soda Creek Elementary School custodian Joy Clark's blood pressure at the Steamboat Springs School District's new health clinic.

Like many Steamboat Springs workers, Clark has felt the sting of rising health insurance costs in recent years.

She said medicines became more expensive and frequent trips to a doctor’s office to have her blood pressure checked and blood drawn now were harder to afford.

Clark sees the district’s new health clinic as a potential remedy to the pinch.

Housed in the district’s administrative building on Seventh Street, the new clinic is hard to distinguish from a regular doctor’s office.

Blood samples spin in a centrifuge in a room also stocked with shelves of prescription drugs.

Teachers, bus drivers and other district employees are seen daily each week and advised in a sterile exam room.

And Clark is one of the clinic’s most frequent users.

She already has forged a friendship with clinicians Brooke Packard and Milad Shah.

The trip to their exam room for a blood draw doesn’t require a whole morning or afternoon off work.

“It’s nice and personable,” Clark said in the waiting room.

The school district’s new clinic is perhaps the most visible reaction to a shared and growing concern in Routt County and across the nation.

The cost of health care continues to rise, and for some school districts, municipalities and private businesses, solutions are needed to save the hundreds of thousands of dollars that are being sucked out of their budgets each year by rising premiums.

It’s often employees who shoulder much of the increased cost burden.

A family health insurance plan at Yampa Valley Electric Association costs employees and the employer each nearly $200 more per month today than it did three years ago, General Manager Larry Covillo said.

Some small-business owners in town question whether they can afford to offer health insurance to their employees.

And bigger ones look ahead to 2014 and beyond, when the Affordable Care Act could require them to provide benefits to uninsured employees who currently are considered part time.

“In the latest surveys we’ve done of our Chamber members, health care and health care costs continue to be one of the highest concerns,” Steamboat Springs Chamber Resort Association CEO Tom Kern said. “People want a better understanding of it, but it’s just such a complicated issue.”

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Timeline: When key provisions of the Affordable Care Act kick in

Time to act

Last spring, the Steamboat Springs School District piqued the interest of the local medical community when it announced a plan to tap Healthstat, a North Carolina-based company, to open a health clinic exclusively for district employees and their dependents.

The status quo was unacceptable, district officials said.

In the 2011-12 school year, the district stomached a 36 percent increase in the cost of its insurance premiums.

District officials said they couldn’t wait any longer to get a grip on the rising cost of insurance.

“Year after year, our costs for health insurance have gone up, and it’s cutting into the lifestyles of our employees and what we can do to help,” Human Resources Director Judy Harris said at a Steamboat Springs School Board meeting in February.

Last year, the district paid nearly $500,000 more for health insurance than it did in 2007.

District officials hope their almost $300,000 investment in the clinic pays off by lowering the number of insurance claims their employees file while instilling a new wellness program in the district.

“Right now, it seems the staff is appreciating it,” Superintendent Brad Meeks said last month about the clinic. “They’ve found it, and they’re using it. We’re excited by its potential.”

But only time will tell whether the district’s investment pays off.

The district said it needs about 18 months before it can determine how significant of a financial impact the new clinic will have.

“I would love to see a financial impact this year,” Harris said last month before offering a tour of the new clinic. “But if we’re a typical clinic, it’ll be a longer-term investment.”

District officials have projected the clinic could save the school system $225,000 per year or more in insurance costs.

Healthstat offers a guarantee the district will see a return on its investment after 18 months.

The district paid $1.5 million for health insurance for its employees last school year, and it said many providers offer a 5 to 7 percent discount for entities that have their own health clinics.

The new facility’s success ultimately will depend on how many teachers opt to use it to take care of episodic illnesses and routine checkups.

The clinic started slowly this year with light traffic, but visitation has picked up to an average of eight visits per day.

To promote the clinic and entice more staff to use it, the district is entering staff who get checkups there into a raffle for a new iPad.

And as they wait to see what financial impact the clinic will have, district officials need look no further than Fort Collins to gauge its potential.

Finding success

Reader poll

What is the status of your health insurance?

  • I’m fully insured. 70%
  • I’m underinsured. 8%
  • I’m uninsured. 22%

357 total votes.

If the success of other new wellness clinics in Colorado serve as a guide, Meeks’ trust in the Healthstat model might pay off.

Like the Steamboat Springs School District, Larimer County saw an opportunity in 2009 to combat the rising cost of medical care for its employees.

Insurance premiums for the Front Range county’s 1,460 insured employees were up 25 percent the year before the county started its own Healthstat clinic, which nearly is identical to the one launched in Steamboat.

“The (insurance) costs were going up and down,” Larimer County benefits administrator Pam Stultz said. “But on average, they were going up 5 percent each year.”

Larimer County’s wellness clinic now has three years of operational history, and Stultz said county employees are pleased with the results.

She said more cases of diabetes have been diagnosed and managed earlier as a result of the clinic. Employees also have access to about 45 commonly prescribed medications.

And the benefits have a dollar amount.

In 2011, the county and Healthstat calculated that $2.84 was saved for every $1 the county spent on the wellness clinic. The report estimated the county saved $2.7 million in deferred insurance claims during the first 18 months of operation, and an additional $267,953 was saved in 20 months because of employees not missing or taking off work to visit the clinic.

“Now we’re asking ourselves, ‘How can we expand this clinic?’” Stultz said. “Employees love it. They have faith in our providers.”

Meeks also was responsible for the establishment of a Healthstat clinic in the Farmington Area Public Schools, where he served as superintendent before coming to Steamboat.

But Steamboat’s new health clinic isn’t drawing universal praise.

Praise and some skepticism

Last month, Harris asked teachers and staff in the school district to share their thoughts on the clinic.

The feedback mostly was positive, with several teachers and staff members reporting they were saving money utilizing the free prescriptions at the clinic and being seen for episodic illnesses like the common cold.

“I have been in for a cold, and I have all my monthly (prescriptions) filled there for free,” Amy Piva, an eighth-grade teacher at Steamboat Springs Middle School, wrote in an email to the Steamboat Today. “Next month, I will get blood work done. ... I am very happy that we have this valuable resource available to us.”

But some teachers are critical of the clinic.

“The services offered at the SSSD clinic may serve a few happy campers, but once again the school district has alienated a population of taxpayers that may not be so inclined to help in future bond elections,” Soda Creek Elementary School science teacher Cindy Gantick wrote. “Wish I could use my premium for true health care that helps my family.”

In addition to opening the clinic, the district reduced the number of health insurance plans available to employees from four to two. District officials said the move has further helped to save money.

When the district first announced it was planning to contract with Healthstat to open a clinic, a group of local doctors and the head of Yampa Valley Medical Center hoped to provide a local alternative.

Some private practitioners were critical of the health clinic model, saying it would be a source of competition and would hurt their own practices.

But months after they were challenged to come up with an alternative, the medical community here in Steamboat still appears unable to offer a concrete plan for the school district. A new partnership forming between the hospital and the Chamber aims to change that for local businesses.

Stay healthy, save money

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Rex Stafford, front, a lineman for Yampa Valley Electric Association, and Jody Cork, a secretary, work out in the company’s on-site fitness room located in its downtown Steamboat Springs headquarters. Offering employees a place to stay in shape has helped save YVEA money on health insurance premiums.

There are new buzzwords in local discussions about health care costs, and they both save money: wellness and preventative care.

Covillo, the general manager at YVEA, said both are an important part of his company’s health care plan and are the key to saving thousands of dollars each year.

“We’re trying to become a healthier group, if you will,” Covillo said.

Employees can use a fitness center at YVEA’s headquarters in downtown Steamboat. They also have their blood drawn and analyzed to establish a baseline for their health.

Covillo said all of the components in the wellness program allow the electric company to receive a 6 percent discount on its insurance rates annually.

Still, the discount only softens what has been a steady climb in premiums.

To provide insurance to its 60 employees, Covillo said, YVEA paid a flat rate of $607,000 for health insurance in 2011. In 2012, the cost increased 12 percent to $650,000.

“When insurance continues to rise at an unsustainable rate, it will affect what we can pay the employees,” Covillo said.

Other local business leaders echo Covillo.

Kern, of the Chamber, said Steamboat Springs employers big and small consistently report their struggles with rising health insurance costs.

They’re also looking to the future and wondering how mandates in the Affordable Care Act will impact them and their employees financially.

“My sense is that the majority of employers in Steamboat that provide health insurance want to continue to do that,” Kern said. “They just want to figure out how to do it so they’re still in compliance and not facing an extra financial burden.”

Kern said companies with more than 100 employees, including some property management companies in town, face the possibility of having to insure employees who previously were not offered benefits.

The Chamber is in discussions with hospital staff to start a series of programs this year meant to educate businesses about the potential impacts of President Barack Obama’s signature health care law.

Kern added there also are plans to extend the hospital’s reach into the business community.

“The other things we’re looking into with YVMC is how we start to bring more wellness programs (to businesses) and begin exploring the preventative side of health care versus the reactive side,” he said.

Shared volatility

For all the complexities of medical care and its costs, one thing is common and clear: The cost is volatile and largely unpredictable for local employers.

Routt County government learned that in 2010 when it saw its insurance premiums spike because of a high number of claims.

“Here, we had a recession where the economy and revenues were declining on us, and we had a 33 percent increase in medical insurance cost,” County Manager Tom Sullivan said.

The county modified its health coverage and shifted to a partially self-funded plan, a move that Sullivan said is projected to result in hundreds of thousands of dollars in savings.

At the city of Steamboat Springs, the cost of health insurance has been more stable but still on the rise.

Finance Director Kim Weber said the city has budgeted to spend about $2.4 million on health care in 2013, a 3 percent increase compared with last year.

“That directly affects what we can spend on the rest of our operating budget,” she said about the $75,000 increase.

The city also is working to determine how the Affordable Care Act will impact its budget starting in 2014, when some part-time employees who work more than an average of 30 hours each week will need to be provided insurance benefits.

While full-time city employees pay a copay for medical treatment, they do not pay a monthly premium for their health insurance coverage.

Amount spent on health insurance for employees, 2007 to 2011

An expensive mentality

Yampa Valley Medical Center CEO Frank May said many factors are coming together to drive up the cost of medical care each year.

It starts with an expensive mentality.

He said some seek expensive medicines to fix an ailment, but then don’t take care of themselves or fail to adopt a healthy lifestyle that could prevent more costly treatments in the future.

It then drives up the cost of insurance for everyone.

“Even though there seems to be a lot of roadblocks, there’s pretty easy access to expensive care,” he said. “We’ve gotten into this utilization of health care that keeps driving costs up.”

Also adding to the cost of health care are new requirements and benchmarks stemming from the Affordable Care Act.

Hospitals across the country have been mandated to adopt and learn to use new electronic record systems, May said. The new technology and associated training comes with a cost.

“There’s also a huge administrative burden from all the changes in health care, and unfortunately, you have to have the people to take care of this, and it’s adding to the cost but not necessarily the services,” May said.

The hospital’s CEO said he’s confident local health care providers will continue to work with local employers in the coming months to develop a model of care that can curb rising health care costs.

He said the effort starts with a focus on preventative care rather than more expensive reactive care.

“One of the main drivers of health care reform was to shift attention to preventative care, so we’re not taking care of people in crisis but educating them with wellness programs so they can better take care of themselves,” hospital spokeswoman Rosie Kern said.

Time will tell

Back at the school district’s new health clinic, clinicians Packard and Shah hope to detect “silent illnesses” before they become a bigger problem.

They also hope to treat small ailments without a district employee having to visit a doctor and file an insurance claim.

Their average patient is between 30 and 50 years old, and the typical visit to the clinic lasts 20 minutes.

“We’ve got a lot of return customers,” Packard said.

While the first financial report card for the clinic still is months away, Meeks said he’s confident the addition will help curb medical care costs.

He said what once seemed a volatile, uncontrollable cost that fluctuated each year based on the number of insurance claims now is more controlled as a result of the clinic.

“It will only be successful if people use it,” he said.

Only time will tell whether the school district’s clinic is a winning prescription.

To reach Scott Franz, call 970-871-4210 or email scottfranz@SteamboatToday.com

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