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Thank you for attending!We will begin shortly.
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Colorado Health Cabinet Policy SummitMaking Health Care More Affordable for Coloradans, Our Employers, and Public Programs
January 12, 2021
Opening Remarks
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Colorado Health Cabinet Policy SummitMaking Health Care More Affordable for Coloradans, Our Employers, and Public Programs
January 12, 2021
Lt. Governor Dianne Primavera, Director of the Office of Saving People Money on Health Care
D.J. Wilson, President and CEO, State of Reform
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Jill Hunsaker Ryan, Executive Director & Scott Bookman, Incident Commander: COVID19, CDPHE
Meet our Other Presenters & Facilitators
Commissioner Michael Conway, DOI
Lt. Governor Dianne Primavera, Director of the Office of Saving People Money on Health Care
Dr. Robert Werthwein, Director Office of Behavioral Health, CDHS
John Bartholomew CFO, HCPF
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Today’s Summit Sessions● 8:00-8:15am Opening Remarks ● 8:15-8:45am Affordability Priorities with Special Focus on the Rx
Report ● 8:50-9:30am State Opportunities to Reduce Prescription Drug Costs ● 9:35-10:05am Federal Opportunities to Better Control Prescription
Drug Costs ● 10:10-10:30am Colorado’s Behavioral Health Task Force Priorities
and Next Steps ● 10:35-11:15am Helping Rural Hospitals and Communities Thrive ● 11:20-11:50am Helping Employers Control Health Care Costs ● 11:55-12:15pm COVID19 Public Health Response ● 12:15- 12:30pm Closing Comments
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Special Guests & State Leadership• Dr. Sami Diab, M.D., President, Colorado Medical Society and Associate Chair,
US Oncology Breast Research Program• Michelle Mills, CEO, Colorado Rural Health Center• Will Cook, President & CEO, Vail Health• Senator Michael Bennet• Senator John Hickenlooper• Marissa Schlaifer, VP, Policy & Regulatory Affairs, OptumRx • Dr. Gerard Anderson, Director, Johns Hopkins Center for Hospital Finance &
Management • Dick Monfort, Owner/Chairman and CEO, Colorado Rockies• Robert J. Smith, Executive Director, Colorado Business Group on Health
Additional State Leadership• Carrie Paykoç, Director, Office of eHealth Innovation, • Tom Leahey, Director, HCPF Pharmacy Office• Nancy Dolson, Special Financing Division Director (HTP), HCPF• Cristen Bates, Sr. Advisor, HCPF Affordability Partnerships• Caitlin Westerson, Sr. Health Policy Advisor, Office of SPMHC
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Battling COVID, Data to 1/11/2021THANK YOU Hospitals & Healthcare Workers!
United States:22.5M total cases374,029 deaths
Colorado:
Cases: 361,148
Deaths due to COVID: 4,107
Deaths Among Cases: 5,208
(1) Colorado Department of Public Health & Environment. https://covid19.colorado.gov
Priorities: Continue to Drive Messaging 1. Socially distance. Wear your mask. Wash hands. 2. Limit gatherings. Stay discipline. 3. Vaccine Distribution4. Get Coloradans vaccinated
– Diversity, trusted-partner messengers
Vaccines Dispensed
1st Dose: 183,323
2nd Dose: 33,878
CO Contagious: 1 in 105
The Health Care StrangleholdBefore the recession: #1 issue for small employers 10 yr running. #1 issue for Coloradans. Largest part state budget
Recession Impact• 20% of Coloradans worry about feeding their family• 22% of Coloradans are worried about losing their home• 18% report being unable to pay for basic necessities (1)
• 672k received Unemployment Insurance March-Dec 2020, 22% of 2019 workforce - now at 250k
• Rising uninsured rate – Coloradans can’t afford coverage
State: Health care represents 36% of state general funds HCPF, CDPHE, CDHS = $4.2B GF
(1) Colorado Health Foundation, Pulse Survey, Sept 9 2020
Pandemic’s Impact on Health Insurance Landscape672k Coloradans Received Unemployment Insurance March-Oct (22% of
2019 workforce); Now = 253,333 on Unemployment Insurance
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CO Unemployment Rate
(1) Colorado Department of Labor and Employment. (2) Office of State Planning and Budget, November 2020.
Feb: 2.5%Mar: 5.2%Apr: 12.2%May: 10.2%Jun: 10.6%Jul: 7.4%Aug: 6.7%Sep: 6.4%Oct: 6.4%Nov: 6.4%
Dec US Job Loss: 140,000Source: Bureau of Labor Statistics
Adults & Expansion Adults 61% of growth.
Children
30% of growth.
2nd fastest state for seniors
growth.
9(1) Colorado Department of Health Care Policy & Financing 2020 data.
Medicaid/CHP Rising enrollment continuesPHE extended by HHS from 1/21/21 for 90 days
If you are currently uninsured, or anticipate being uninsured, do you plan to:
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July 31(5,000+ respondents)
Nov 9(857 respondents)
Purchase coverage thru Connect for Health 8.92% 8.89%Purchase coverage directly from a health insurance company 2.70% .81%
Apply for coverage w/ CO Medicaid 20.0% 35.85%Apply for coverage w/Child Health Plan Plus .99% 1.08%Get covered thru my spouse's health insurance 1.71% .27%
Under 26, get covered through my parent’s health insurance 0.09% .27%
Get covered, but not through any of the above 4.95% 4.04%Other 14.50% 8.36%Go without health insurance coverage 46.13% 40.43%
Connect Coloradans to affordable coverage!
• I can’t afford the monthly premiums: 82.63%
• I can’t afford the copayments, coinsurance or other out-of-pocket costs: 40.12%
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Why are you planning to go without coverage?
• I don’t think I will be out of work – and therefore without health care coverage – for that long: 3.56%
• I do not think I need health insurance: 4.79%
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1. Reduce pharmacy costs
2. Reduce large employer insurance costs
3. Behavioral Health Task Force recommendations
Lt. Gov Primavera, Office of SPMHC & Health Cabinet Goals
Colorado – We Lead!
• System Reform: Behavioral Health Task Force� Improve access, quality, efficiency, navigation� New Behavioral Health Administration (BHA) addresses a
fragmented system, merging 75 non-Medicaid programs� Stimulus to centralize BH eligibility, claims payment,
reporting, etc. HCPF will continue to take an active role in this work!
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Improving Behavioral Health Outcomes
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Focus on Major Drivers: Hospital, Rx
(1) Health Care Cost Institute, 2020
Price and Utilization
Total Spending
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2018: #1 for Hospital Total Margin/Profit. #8 for Hospital Operating Expenses per Adjusted Discharge (Cost of Living Adjusted)
Source: Medicare Cost Reports
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Evolving Hospital Transparency to Frame New Affordability Policy
Two statutory reports due from the Dept, Jan. 15, 2021: ● Hospital Expenditure Report, Transparency (HB 19-1001).
○ Hospitals’ net patient revenue increased 33.7% from 2014 to 2019■ $4.0B, averaging 6% growth a year
○ Charity care decreased 10.8%
● Hospital Community Benefit Accountability (HB 19-1320). ○ Requires nonprofit tax-exempt general hospitals, Denver Health and
University to complete a Community Health Needs Assessment every three years and an annual community benefit implementation plan every year.
○ Overall investments reported from 2019 totaled $1,874,994,604. ■ Free, reduced-cost health care services: $1,040,851,796■ Health behavior, risks, social determinants programs:
$834,142,808.
• Hospital – Community – HCPF collaboration
• Value-based payments for transformation $1B+ annually
• Improves affordability & outcomes
• Rural Support Fund: $12 million x 5 years = $60 million
Hospital Transformation
through Value-Based Payments
Solution: State & Community Hospital Transformation Collaboration
Hospital Transformation Program (HTP)
• Closing down or repurposing standalone ERs (HTP reward)
• Getting physicians better tools (HTP rewards)
• Alternative payment methodologies that better reward providers for cost and quality
• Telemedicine: • Access: Specialty care, rural areas, older adults,
people with disabilities• Behavioral health (battles stigma)• Appropriate rates
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Pursuing “A New Normal in Health Care”
Supreme Court ACA Hearing • As California’s AG, Xavier Becerra lead defense of ACA• $2B+ for CO Medicaid expansion up to 138% FPL, covering 500+k • Exchanges subsidies up to 400% FPL, 119k of 173k Coloradans• We are cautiously optimistic on final May/June decision
On Healthcare Affordability, June 2020: “We are in the midst of a global pandemic, so it is more important than ever that we make healthcare more accessible and affordable for patients who need it.”
On Rx, Leader in Opioid Settlements: “Our office has worked aggressively with our coalition partners to hold accountable bad actors who fueled this public health crisis.”
On Hospitals: Settlement addressed Sutter Health’s anticompetitive practices. Acquisitions & mergers lead to market domination/monopoly, reduced competition,increased prices through market domination and market price setting
Transparency, Affordability Actions & Community Investment19
New HHS Appointee: Xavier Becerra
How Coloradans Are Getting Covered
• Dec 2020, 1.42M (24.2%) of Coloradans in Medicaid, CHP+ (2)
• Sept 2020, Medicare covers 16.1%, 941k+. • Public Plans > 40%.• Rising uninsured rate. Less certainty in employer coverage. • Affordability issue is NOT with public programs. • Support for the General Assembly’s pursuit of a state-based,
insurance option (1) Colorado Health Institute, February 2020 (2) Official HCPF data, October 2020
(1)
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“Hispanic residents are about 20% more likely than white residents to die of treatable
conditions. There’s no one explanation for the disparity in deaths, experts say.”
-Denver Post, Oct 4, 2020 (1)
Health Equity and Health Care DisparitiesSeeking CDC Funding, State Stimulus $$, Partnerships,
Culturally Sensitive Care Delivery
In Colorado: • Hispanic people are 22% of the pop and 38%
of COVID cases and hospitalizations. • Black people are almost 5% of the pop,
nearly 10% of COVID hosp., 7% of deaths.
• White people are 68% of the population but only 38% of COVID cases. (2)
(1) Wingerter, Denver Post, October 2020 (2) CDPHE data, 2020 (3) March of Dimes, Peristats, 2020
(3)
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Reducing Rx Costs in Colorado – Cost Drivers and Strategies to Address Them
2nd Edition released 1/11/21
Prescription drugs are the fastest growing consumer health care expense
Prescriptions, Expenditures by Drug Type
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Drug Type % prescribed % of expenditures
Generic 84% 13%
Brand Name 14% 39%
Speciality Drug 1% 48%
Medicaid 2020
Colorado All Payers 2018
Drug Type % prescribed % of expenditures
Generic 85% 19.6% ($759m)
Brand Name 15% 39% ($1.5b)
Specialty Drug 1% 42% ($1.6b)
Source: Internal analysis, CIVHC analysis 2020
Increase transparency. Federal or state intervention to influence price during patent protection period.
Complex pricing structures and no competition during patent protection to drive appropriate pricing.
Drug importation Canada & other countries. Affordability Board. Learn from Medicaid policy. Reform patent and exclusivity policies, expedite generic approvals.
U.S. pays more for the same drugs than almost any other country
MAJOR COST DRIVERS SOLUTIONS
Limit direct to consumer marketing, physician marketing and detailing. Rebate sharing. Prescriber Tool.
Overutilization of higher cost drugs.
Create a state Affordability Board to address high drug costs. Evolve federal pricing influence, i.e.: Medicare & new drugs.
Drug prices are affected by multiple levers. Split fed oversight. No statewide accountability to protect consumers.
Value-based contracts. Re-evaluate federal production incentives. Fed intervention in launch prices.
# of new drugs each year increasingly high-cost, specialty drugs.
Rebate pass through to reduce costs to employers and consumers.
Use of rebates, which impact prices and are often kept by middlemen.
Coalition-led negotiations to improve discounts, rebates, other pricing. Learn from Medicaid best practices and policies.
Disparities in best practices and prices between small & large employers.
MAJOR COST DRIVERS SOLUTIONS
CO Net Medicaid Rx Spend PMPM is Flat
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Health First Colorado Pharmacy and Physician Administered Drug Expenditures and Rebates, Per Member Per Month (PMPM) 2014 - 2019
Calendar Year
Total Rx Expenditure
Amount
Total Rx Spend, After Rebates
Total Drug Rebate Amount
Rebate Percentage of
Total Expenditures
Total Rx Expenditure
Amount, PMPM
Total Rx Spend, After
Rebates, PMPM
2014 $641,250,900 $401,444,356 $239,806,544 37.40% $51.17 $32.04
2015 $841,710,698 $436,615,378 $405,095,320 48.13% $56.47 $29.29
2016 $1,011,463,513 $523,133,928 $488,329,585 48.28% $63.42 $32.80
2017 $1,093,440,876 $504,738,484 $588,702,391 53.84% $67.60 $31.21
2018 $1,122,993,942 $445,861,992 $677,131,950 60.30% $72.73 $28.88
2019 $1,146,383,302 $385,240,394 $761,142,908 66.40% $77.78 $26.14
CY 2017-2019 Drug Rebates are adjusted for an overcollection of drug rebates that occurred in CY 2017. The Department has been paying back the overcollection to drug manufacturers, and has adjusted the figures based on the approximate reimbursement by calendar year.
Learning from Medicaid Fed Protections
Medicaid Flat Trend After Rebates - Why?
• Medicaid Drug Rebate Program requires manufacturers to offer their “best price”
• Medicaid rebates increased when prices increase faster than inflation
• Full rebates pass-through to Medicaid/CMS
• Supplemental rebates negotiated in exchange for preferred formulary status
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Drug Importation Savings – Canada & Other Countries
28Source: Colorado Department of Health Care Policy & Financing internal analysis, 2020
HCPF 50 drug analysis: employers & consumers savings avg.:● From Canada: 63% ● From Australia: 78% ● From France: 84%
14 biologics analysis savings avg.:● From Canada:71% ● From France: 77% ● From Australia: 78%
Prescriber ToolPhase I• Drives prescribing based on Rx cost & quality• Ease of admin with payer formularies, prices, copays, prior auth rules. • Opioid addiction risk module, alerting docs before they prescribe
Phase II• Carrier/payer programs so docs can prescribe programs, not just pills• Sets up more effective prescriber value based payment rewards • Social Determinants of Health – Next General Approach
Status: • Opioid module implemented – provider rollout now• 5000 fee licenses available• HTP includes incentives to Hospitals to connect/use• Need carriers to engage – provide access to info• CO Medical Society and others will test• CORHIO/QHN: help to connect via EHRs• OeHI: help on connectivity (part of Roadmap)
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● Commercial Rebates = 18% of Specialty Rx spend, 22% of Brand Rx spend
● Commercial payers received $179M in rebates, or 16% of 2018 spend ($1.18 B), up 50% from 11.2% in 2016. (ins only)
● Since 2016, rebates for Specialty Rx increased by 67% (1)
Rebate Pass Through Value
Source: (Kirzinger, KFF Health Tracking Poll, 2019), CIVHC Analysis 2020
Employer Rx Discounts & Rebate Negotiations through The Colorado Purchasing Alliance (TCPA)
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Members Overall Specialty Discount*
Retail Rebates** Mail Order Rebates**
Specialty Pharmacy Rebates**
<10k AWP- 13.5% to 20% $70 to $180/brand claim
$250 to $575/brand claim
$580 to $1900/brand claim
10k to 100k
AWP-17% to 22% $75 to $180/brand claim
$315 to $655/brand claim
$970 to $2300/brand claim
>100k AWP- 20% to 22% $120 to $180/brand claim
$355 to $665/brand claim
$1320 to 2300/brand claim
Members Retail Brand Discount
Retail Generic Discount
Mail Order Brand
Mail Order Generic
<10k AWP-16 to 19% AWP-72 to 76% AWP-20 to 25% AWP-76 to 87%
10k to 100k AWP-18 to 21% AWP-74 to 84% AWP-24 to 26% AWP-78 to 89%
>100k AWP-18 to 22% AWP-83 to 85% AWP-24 to 27% AWP-85 to 89%
Other State Rx Legislation (passed)
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Established Affordability Boards Maryland, Maine, and New Hampshire
Importation from Canada Colorado, Florida, Maine, New Hampshire and New Mexico Vermont
Transparency and Cost Control Minnesota, New Hampshire, Utah, West Virginia, Washington, Colorado, Texas, Oregon, Vermont, and Maine
Pharmacy Benefit Managers Georgia, Indiana, and Maine
Rebates Iowa, New Hampshire, Virginia, Georgia, Colorado
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Thank you!
Next up: State Opportunities to Reduce Prescription Drug Costs, hosted by DOI Commissioner Mike Conway
We appreciate collaborative partnerships and accountability to improve health care affordability and outcomes.
Next Panel: State Opportunities to Reduce Prescription Drug Costs 8:50 am-9:30 am
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Panelists Tom Leahey, Pharmacy Office Director, Colorado Department of Health Care Policy & FinancingCaitlin Westerson, Senior Health Policy Advisor, Office of Saving People Money on Health CareDr. Sami Diab, MD, Colorado Medical Society and Associate Chair, US Oncology Breast Research Program
ModeratorCommissioner Michael Conway, Division of Insurance
Colorado Health Cabinet Policy SummitMaking Health Care More Affordable for Coloradans, Our Employers, and Public Programs
January 12, 2021
37
Panel: State Opportunities to Reduce Prescription Drug Costs
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● Creating an Affordability Board to study and impact prescription drug costs
● Transparency in prices, profits and rebates● Passing along rebates and related savings to employers and
consumers● Providing prescribers access to patient specific affordability
information and evidence-based guidance● Increasing value-based contracts and payments● Preparing state laws to parallel federal laws that would enable
drug importation beyond Canada and include biologics
Colorado Health Cabinet Policy SummitMaking Health Care More Affordable for Coloradans, Our Employers, and Public Programs
January 12, 2021
Next Panel: Federal Opportunities to Better Control Prescription Drug Costs9:35 am-10:05 am
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Panelists Senator John HickenlooperSenator Michael BennetMarissa Schlaifer, VP of Policy and Regulatory Affairs, OptumRx (United)Dr. Gerard Anderson, PhD, Director of the Johns Hopkins Center for Hospital Finance and Management and Professor at Johns Hopkins Bloomberg School of Public Health and Johns Hopkins University School of Medicine
Colorado Health Cabinet Policy SummitMaking Health Care More Affordable for Coloradans, Our Employers, and Public Programs
January 12, 2021
ModeratorKim Bimestefer, Executive Director, Colorado Department of Health Care Policy & Financing
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Panel: Federal Opportunities to Better Control Prescription Drug Costs
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● Expanding drug importation to include other countries beyond Canada and the importation of biologics
● Reforming patent and exclusivity laws and regulations that prevent competition while expediting approvals for generic drugs to enter the market
● Looking to international drug pricing models and connecting U.S. prices to other countries
● Adding price and cost consideration to the FDA approval process
● Limiting direct-to-consumer advertising
Colorado Health Cabinet Policy SummitMaking Health Care More Affordable for Coloradans, Our Employers, and Public Programs
January 12, 2021
Next Session: Colorado’s Behavioral Health Task Force Priorities and Next Steps10:10 am-10:30 am
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PresentersLt. Governor Dianne Primavera, Director of the Office of Saving People Money on Health Care
Dr. Robert Werthwein, PhD, Director, Office of Behavioral Health, Colorado Department of Human Services
Colorado Health Cabinet Policy SummitMaking Health Care More Affordable for Coloradans, Our Employers, and Public Programs
January 12, 2021
45
Phase 3 will focus on additional implementation
The BHA will review the remaining
recommendations to determine the next set of recommendations to be
implemented.
The Blueprint will serve as a guide to reform
Colorado’s behavioral health system in future
years.
Next Panel: Helping Rural Hospitals and Communities Thrive10:35 am-11:15 am
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Panelists Will Cook, President and CEO, Vail HealthCarrie Paykoç, Director, Office of eHealth Innovation Michelle Mills, CEO, Colorado Rural Health Center Nancy Dolson, Special Financing Division Director, Colorado Department of Health Care Policy & Financing
ModeratorJohn Bartholomew, CFO, Colorado Department of Health Care Policy & Financing
Colorado Health Cabinet Policy SummitMaking Health Care More Affordable for Coloradans, Our Employers, and Public Programs
January 12, 2021
47
Panel: Helping Rural Hospitals and Communities Thrive
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● Rural hospitals are integral to their communities● Rural hospitals need support to help transform and evolve● HTP and the Rural Support Fund
https://www.colorado.gov/pacific/hcpf/colorado-hospital-transformation-program
● Hospitals invest in their communities ● Expanding broadband and technology infrastructure is
essential to address inequity: OeHI oehi.colorado.gov/
Colorado Health Cabinet Policy SummitMaking Health Care More Affordable for Coloradans, Our Employers, and Public Programs
January 12, 2021
Next Panel: Helping Employers Control Health Care Costs11:20 am-11:50 am
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PanelistsRobert J. Smith, Executive Director, Colorado Business Group on HealthDick Monfort, Owner/Chairman and CEO, Colorado Rockies Cristen Bates, Senior Advisor on Affordability Partnerships, Colorado Department of Health Care Policy & Financing
ModeratorMichael Conway, Colorado Commissioner of Insurance, Division of Insurance
Colorado Health Cabinet Policy SummitMaking Health Care More Affordable for Coloradans, Our Employers, and Public Programs
January 12, 2021
49
Panel: Helping Employers Control Health Care Costs
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Prescription drugs are a significant percentage of employer health care costs
● Affordability Toolkit from HCPF www.colorado.gov/hcpf/affordability
● Reducing Costs of Prescription Drugs in Colorado, 2nd Ed. including an employer best practices section www.colorado.gov/hcpf/publications
● Colorado Purchasing Alliance: Contact Bob Smith robert.smith@cbghealth.org
Colorado Health Cabinet Policy SummitMaking Health Care More Affordable for Coloradans, Our Employers, and Public Programs
January 12, 2021
50
Panel: Helping Employers Control Health Care Costs
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● Creating an Affordability Board to study and impact prescription drug costs
● Transparency in prices, profits and rebates● Passing along rebates and related savings to employers and
consumers● Providing prescribers access to patient specific affordability
information and evidence-based guidance● Increasing value-based contracts and payments● Preparing state laws to parallel federal laws that would enable
drug importation beyond Canada and include biologics
Colorado Health Cabinet Policy SummitMaking Health Care More Affordable for Coloradans, Our Employers, and Public Programs
January 12, 2021
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