From her office in one of the most picturesque communities in America, Tamara Drangstveit heard every day about the horrors of living there.

Monthly health insurance premiums in Summit County were higher than mortgage payments. Residents were toughing out illnesses and injuries at home rather than going to the doctor. Families were packing up and moving to find more affordable coverage.

But now, she and other Summit County leaders have led a first-of-its-kind effort in Colorado that is poised to lower health insurance prices for many in the county — and could become a model for communities across the state to gain leverage over a health care system that often feels suffocating.

In the stodgy world of health policy, this is about as cinematic as it gets: A group of small-town locals, fed up with high prices, fighting together for a better deal from two powerful industries. And, despite those challenges, they appear to have pulled it off. When many people in Summit County go shopping for health coverage next year, Drangstveit said they could see premium prices 20% lower — a savings of hundreds of dollars a month for families.

“I think that it is a huge first step for our community,” said Drangstveit, the executive director of the Family and Intercultural Resource Center in Silverthorne, which helps people find health coverage. “And it will go a long way toward making it more affordable for Summit County residents to get health care.”

MORE: Five numbers to help explain Colorado’s plan to dramatically lower insurance prices.

Gaining leverage

At the heart of the debate nationwide over health care prices is the question of leverage. When it is difficult to know how prices for health services are set — and when those prices are then filtered through an insurance company, which sets its own prices — how can consumers exert power in the marketplace?

The Summit County effort, called the Peak Health Alliance, seeks to answer this by bringing businesses and individuals together to collectively negotiate prices from hospitals and doctor groups before getting any insurance company involved. So, this winter and spring, alliance leaders went to hospital systems across the region and asked a different question: What kind of deal will you give us?

“You just keep asking questions and you just try to be persistent because this whole health care thing … if you were to set this up from Day 1, no one would set up the health care system that we have,” said Mark Spiers, the president of the board of The Summit Foundation, which provided some support to get the Peak Health Alliance up and running. “But if you are persistent and you keep asking questions and you have some partners who will work with you, we think this is going to have some significant change.”

Along the way, the alliance discovered it had more power than it realized.

Currently, the alliance is made up of several employers — local governments and vacation companies. But people who shop for health insurance on their own will also be able to be part of the alliance, bringing the total number of people covered through the alliance to around 6,000, in a county with about 30,000 full-time residents.

That was a big enough number to get the attention of leaders at Centura Health’s St. Anthony Summit Medical Center, the county’s only hospital.

“We knew we had to come to the table and do something for our community and our local residents of Summit County,” said Lee Boyles, the hospital’s CEO.

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Negotiating prices

But the alliance had some added leverage. It could take its business elsewhere if St. Anthony Summit didn’t give them the deal they wanted. Drangstveit said the alliance also talked with hospitals on the Front Range and in Eagle County.

And the alliance was armed with some pretty potent data. Through a report prepared by a consultant, the alliance learned that St. Anthony Summit was charging privately insured patients five times more for outpatient services than what Medicare would pay in Summit County for those services. For emergency services, it was eight times more. And a recent report from the RAND Corp. ranked St. Anthony Summit as the second-most-expensive hospital in Colorado.

St. Anthony Summit Medical Center CEO Lee Boyles (Courtesy of Centura Health)

Meanwhile, other research discovered that as many as half the people in Summit County were leaving the county — mostly to the Front Range — to receive medical treatment, often citing prices.

“I think that helped bring them to the table,” Drangstveit said. “Although, I think to be really fair to Centura, they were really looking to develop this kind of partnership.”

Boyles said the hospital’s unique situation contributes to its prices. Located in a resort community — and especially in one where a lot of visitors are engaged in potentially dangerous activities — it needs to be staffed up to handle far more than other hospitals in counties its size. And, because the hospital doesn’t want to lay people off during the slower fall and spring months, it needs to maintain that staffing even when the patient load drops.

But he said hospital leaders also knew they needed to do something to make health care more affordable.

“Nobody is denying that our rates are high up in the mountains,” he said.

Deals struck

When the negotiation was finished, the Peak Health Alliance had reached a deal with Centura that will see the hospital system slash prices for alliance members by a minimum of 20%, Boyles said.

And, as a result of the new partnership, the alliance and the hospital can work together to get more people into less-costly primary care visits for simple health issues and smooth out the ups and downs of the hospital’s activity.

Or, as Boyles puts it: “Provide people with access to care at the right place at the right time at the right cost.”

But negotiating hospital rates was only half the fight. Once it had those in hand, the alliance then asked insurers across the state to submit bids to cover alliance members.

This is what distinguishes the alliance from other community-led health bargaining efforts. When it finally comes together, it will have the weight of full insurance and all the protections the law guarantees.

Though innovative, Drangstveit said this part was “a fairly straight-forward process.” The alliance ultimately selected Bright Health to be the insurance carrier for people shopping on their own and Rocky Mountain Health Plans to be the carrier for employers. Both have previously provided coverage in Summit County, so they were familiar with the community, Drangstveit said.

Dramatic savings

Drangstveit said when everything is finalized, people who are part of the alliance will see drops of 15 to 20% in premium prices. That would mean an extra $400 a month in the bank accounts of families currently paying $2,000-a-month premiums, an entirely common figure in the county.

She said she’s not sure how the state’s separate plan to create a reinsurance program will further impact prices. But Michael Conway, Colorado’s insurance commissioner, said some residents of Summit County could see their health insurance bill cut in half when the two programs are combined.

There are still some things to work out. Spiers said the alliance is negotiating a deal with Children’s Hospital Colorado for when Summit County families need specialty care that only it can provide. Conway, who has said he would like to see the health alliance model go statewide if it works out in Summit County, needs to sign off on the new rates.

And then there’s the issue of marketing the product on the state’s health insurance exchange and making sure Summit County residents understand how they can become part of the alliance.

So, Drangstveit, Spiers and other alliance leaders aren’t fully celebrating just yet. They’re proud of what they have built, Drangstveit said, but they’re not done, either.

“In some ways it’s a big deal and in some ways, we’ve still got a lot of work to do,” she said. “What I’ve been saying is we’ve gotten it below people’s mortgage. But maybe that’s not the benchmark we want to use long term.”

