The Utah Experiment

How the state is working to improve your company’s health options.

by Neal Gooch

In 1960, King Whitney Jr., a successful businessman and president of Personnel Laboratory Inc. observed, “Change has a considerable psychological impact on the human mind. To the fearful, it is threatening because it means that things may get worse. To the hopeful, it is encouraging because things may get better. To the confident, it is inspiring because the challenge exists to make things better.”

Whitney’s observation is apropos to Utah’s experiment to reform the health care delivery system in Utah and how it is financed. Many fear the change because health care delivery and financing could be made worse. A number are hopeful that the change will be for the better and some are inspired to make it better and to actually change the system. It is this third group that has control of health care reform in Utah. The governor and the legislature are hopeful and inspired to make Utah’s health care delivery system a model for the nation.

So what is the Utah experiment all about?

Health care reform in Utah has six areas of reform to achieve better health care access and a healthier population:

• Creation and implementation of a Utah Health Exchange and a defined contribution market


• Transparency of cost and quality of health care in Utah


• Creation of a clinical Health Information Exchange that reduces health care costs and keeps people healthier


• Payment reform that addresses rising health care costs


• Insurance reform that permits innovation in the health insurance market and prohibits insurers from using abusive rating practices for small business groups


• Implementation of certain medical malpractice reforms

Utah’s approach to health care system reform is to use a policy laboratory — where new things are tried, tested, adjusted and then implemented. The end product is refined, reliable and bug-free.

What it means to small business

The Utah Health Exchange and the Defined Contribution Market will result in consumers’ full participation in their health and health care decisions. Access to useful cost and quality of care information will be available and consumers will be able to implement their decisions electronically. The defined contribution market takes the burden off employers because employers determine the amount they will contribute toward health insurance; then employees choose a plan through the exchange to suit their needs. Transparency reforms provide resources for consumers to know the costs of their health care and insurance decisions and permit them to compare and shop for the best value between health care providers and insurance providers.

The Clinical Health Information Exchange is the first statewide system for sharing electronic medical information between health care providers, which ensures that patient’s health history is available wherever treatment is given; better-informed providers and patients affect health care costs and keep people healthier. Insurance reforms generate lower-cost, mandate-light health insurance plans for employees to purchase. Lower-cost COBRA coverage will be available for those leaving employment. Abuse of small employer rating practices by insurers will be curbed or eliminated and more reasonable rating factors will be the standard. Health care provider payment reforms result in a payment system based on health outcomes rather than volume of patients seen. Medical malpractice reforms curb abuse of the litigation system and only litigation that has merit may be initiated.

Utah is a leader in state-based health care reform. I encourage each of you to be involved with your government leaders and legislative representatives to provide your input on the Utah experiment.

Neal Gooch is the insurance commissioner for the state of Utah. He has been involved in Utah’s insurance policy world for more than 20 years. Having served as deputy insurance commissioner since 1997, he was appointed commissioner in May 2010. To learn more about the Utah Health Exchange, visit www.exchange.utah.gov.