No small task providing health insurance and health care.

THE UNITED STATES SPENDS $1.65 TRILLION annually on health care, almost 14 percent of its gross domestic product. As health-care costs continue to rise with no end in sight, providers look for ways to deliver quality and affordable care to patients, while businesses grapple with containing costs while providing competitive benefits to their employees.

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All in all, that's a delicate balancing act that requires a healthy mix of innovation, communication and compromise.

"The costs of health insurance are escalating faster than any other aspect of insurance," said Greg Ahbe, president of The Ahbe Group. "A business may see its health insurance premiums go up 27 percent in a single year. They can't raise their prices by 27 percent."

Ahbe employs about 70 agents throughout Colorado and operates six branch offices in the Denver Metro area. The firm represents more than 150 insurance and financial-service companies.

"Employees are having to shoulder more of the costs of their coverage, but at the end of the day, it's often hard for an employer to tell employees that they're going to have to pay more," Ahbe said. "That's why you have to be creative. When we sit down with an employer we say, 'Let's see how we can position ourselves so we can save a dime, then let's try to add value to the plan to offset any rising costs to the employee. Employers know that the better the package, the better the employee."

When it comes to employer-sponsored health benefits, Colorado businesses have encountered the proverbial perfect storm. Over the last five years, as premiums have seen double-digit annual increases, several insurance carriers have pulled out of the state. As that market shrinks, so too do an employer's options, especially companies with 50 or fewer employees.

"Mid-market companies, those with 50 to 200 employees, have more carrier options and more funding options," said David Uppinghouse, senior vice president of employee benefits for Van Gilder Insurance Corp. "Some of those companies are partially self-funding their heath plans. They take on some of the risk and potentially reap the rewards in good years."

Funded in 1905, Van Gilder is the oldest and largest independent insurance brokerage firm in the Rocky Mountain region. The firm has offices in Colorado, Arizona, Kansas, Texas and Utah, and employs 265 professionals who provide a full line of commercial and personal insurance, as well as employee benefits and aviation insurance. The firm recently added expertise in retirement plans and can help clients with 401K and qualified retirement plans.

Uppinghouse said many of his clients are containing costs by modifying coverage. As premium costs rise, the trend is toward higher deductibles, higher out-of-pocket payments and more premium sharing by employees. The key is for employers to effectively communicate their situation and the changes to their employees.

"First we help the employer select the right plan, then we help the employer communicate the plan to their employees," Uppinghouse said. "We become an extension of the H.R. function."

The trend toward greater cost sharing has medical as well as financial benefits. Patients become more informed consumers, and more responsible patients. The secret is to educate consumers about the difference between discretionary versus non-discretionary treatments, while encouraging prevention and early treatment.

"From the physician's side, there is some value in having an individual aware of the costs," said Dr. Bill Wright, associate medical director for Colorado Kaiser Permanente. "But there also is a nervousness that we want people to come in and work with a doctor."

Kaiser is both a health insurer and a deliverer of health care. Through its physicians' group of more than 700 doctors, Kaiser provides health care to more than 400,000 members in the Denver metro area and 35,000 in Colorado Springs.

No single health-care plan can fit every employee's needs. That's why Kaiser has developed a menu of options that employers can offer their staff. "Employers want to work with one insurer, but they want to offer their people choices," Wright said.

Unlike health insurance, employers are required to provide and must pay the entire cost of workers' compensation insurance. Spiraling healthcare costs also have impacted this industry and the companies it serves. Medical payments now account for 45 percent of workers' compensation benefit costs, said Gary Pon, president and CEO of Pinnacol Assurance, Colorado's largest and oldest provider of workers' compensation insurance.

Pinnacol, which writes more than 50 percent of the state's workers' comp plans and insures more than 58,000 companies, controls costs by taking a proactive approach to preventing accidents before they happen. "We have the largest cadre of safety consultants in the state who work in the field to identify potential hazards, help clients create safety policies and provide regular safety training," Pon said. When accidents happen, Pinnacol provides a statewide network of more than 300 primary-care physicians and several hundred specialty-care providers experienced with workplace injuries.

Determining the correct and most cost-effective care, and communicating that care to consumers has become a critical component of dental insurance, too.

"We're providing the best value of care through evidence-based dentistry," said Kathryn Paul, president and CEO of Delta Dental Plan of Colorado. "Through systematic reviews of treatments we're determining which treatments are best, based on efficacy." Paul said, for example, traditional cleaning of a child's teeth twice a year has no effect on the child's chances of developing cavities. The money is far better spent on sealants, proven to prevent cavities. Delta Dental, the largest provider of dental insurance in Colorado, insures more than 1 million people through more than 3,000 employer-sponsored plans. As a member of the national Delta Dental Plans Association, Delta Colorado can provide plans to Colorado companies with employees throughout the United States.

Direct health-care providers are no less impacted and certainly no less responsive to the rising costs of health care. "As our costs go up, our reimbursements go down," said Pam Brock, vice president of marketing and strategic planning at Poudre Valley Health System. "As a system, we spend a lot of time communicating cost saving to our staff and watching and monitoring our procedures and equipment."

Poudre Valley operates a 260-bed hospital in Fort Collins, Mountain Crest Behavioral Health Center, a mental health and substance abuse facility, and the Harmony Campus, a medical office park. In early 2007, Poudre Valley will open Medical Center of the Rockies, a 136-bed hospital in Loveland. Poudre Valley has consistently been named among the nation's top 100 hospitals as well as the lowest-cost provider in northern Colorado and one of the lowest-cost providers in the state.

Brock attributes much of Poudre Valley's success to its focus on its nursing staff. "We focus on recruiting and retention," she said. "The quality of our care is high because nurses want to work here. Physicians want to work here because the quality of our nursing staff is so high."