CEOs: Health care administrative costs still rising

Administrative costs for health care providers have soared due to the Affordable Care Act and lower health care costs may be still years away, health care leaders said Tuesday.

The chief executives of health care providers and insurers met Tuesday for a BizWest CEO Roundtable on health care at Berg Hill Greenleaf & Ruscitti LLP in Boulder. The leaders of the Boulder Valley and Denver health care providers and insurers discussed disadvantages such as higher administrative costs and benefits such as increased number of insured people.

Eight months after much of the Affordable Care Act’s individual mandate to purchase health insurance took effect, health care providers have seen administrative costs rise as they seek to follow a stream of regulations.

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Insurance billing has led to higher costs at Boulder Valley Women’s Health Center, said executive director Susan Levy, who has had to hire more administrative staff members to handle paperwork.

“Insurance billing is so incredibly complex,” she said. “I think unnecessarily complex… It sucks money out of the system.”

The Affordable Care Act has decreased the population of uninsured people, but it has not lowered the cost of health care, said James Marsh, president of HofgardBenefits in Boulder. Consequently, insurance premiums have spiked as providers care for more patients.

“The cost of care has not gone down,” Marsh said. “The amount of services that must be provided within the contract itself has increased.”

Health care leaders expect costs to continue rising for at least a few years.

“(Costs) are not going to go up sky high, but they’re going to go up a little faster than they’ve been going up, which is a lot,” said Ivan Miller, president of Colorado Foundation for Universal Health Care in Denver.

Craig Beyer, founder of Boulder Eyes and Beyer Lasik in Boulder, agreed that billing insurers for services has led to higher costs for health care providers.

“They’re rewarding the insurance companies and the administrators,” he said. “The providers are the ones who are not really included in this whole system.”

Participants:
Tom Base, CEO, Foothills Health Solutions; chief business development officer, Mental Health Partners
Craig Beyer, founder, Boulder Eyes/Beyer Lasik
Denise Dougherty, director, employee benefits, Taggart Insurance
Timothy Johnson, president and CEO, Frasier Meadows
Susan Levy, executive director, Boulder Valley Women’s Health Center
James Marsh, president, HofgardBenefits
Ivan Miller, president, Colorado Foundation for Universal Health Care
Sponsors: Berg Hill Greenleaf & Ruscitti LLP and EKS&H