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Will $35 million facility at Alaska Native Medical Center save state millions?

Alaska Dispatch

A bill that would construct a $35 million residential housing facility at the Alaska Native Medical Center in Anchorage in an effort to cut the state’s Medicaid expenses has been unanimously approved in the Alaska Senate.

The proposed facility would have 170 beds and be connected to the center by a skybridge.

"Over half of the people who receive services at the Alaska Native Medical Center (ANMC) travel from outside of Anchorage to access health services,” Valerie Davidson, the Alaska Native Tribal Health Consortium (ANTHC) senior director of legal and intergovernmental affairs said in a press release. “Patient housing is critical to ensuring meaningful access to care at ANMC for pregnant moms, for those who are receiving cancer treatment, and for other people who must receive care far from their home communities."

Savings would be realized because more patients would be able to go to Alaska Native Medical Center, which is eligible for 100 percent federal funding, instead of Alaska Regional Hospital or Providence Medical Center, which aren’t.  In those instances, Alaska must pick up half the Medicaid tab of Native patients at Providence or Alaska Regional. In Fiscal Year 2012, the state paid the two hospitals almost $30 million for care that could’ve been provided at Alaska Native Medical Center.

The combination of the residential facility along with Alaska Native Medical Center’s plans to increase some services is projected to yield a 30-percent increase in services provided there.

“When I have to construct a budget for the state, one of the first questions I ask is what’s the Medicaid hit this year,” Sen. Pete Kelly, R-Fairbanks, co-chair of the Senate Finance Committee, said in a press release. “It’s always a big number and we have to reduce from other areas to accommodate it. This project should actually save us money -- about $8 million per year is a conservative estimate. It will not only provide a health benefit for Alaskans, but will save us money as well.”

On top of actual medical costs, Medicaid also picks up other costs associated with travel including: hotels, food, taxi rides, and plane travel, and the new facility is expected to help cut those costs, too.

“One of the most critical components of medical recovery is a strong support system including strong cultural values,” Sen. Kevin Meyer said in a press release. “This bill creates more of a community atmosphere by keeping families together during this critical period. It also brings cultural values into the recovery process because it allows Native foods to be served and offers other programs that provide strong ties to home.”

The measure, Senate Bill 88, now heads to the House.