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Stern warning for Alaska lawmakers about ballooning health-care costs

Pat Forgey
Parnell administration officials warned lawmakers on Monday that Alaska faces some bitter medicine in the form of steadily ballooning health care costs. Creative Commons photo

JUNEAU -- Parnell administration officials have told legislators that they're battling a growing health-care cost problem that threatens to overwhelm state government. On Monday, Health and Social Services Commissioner Bill Streur warned lawmakers that health care costs have been growing for the state at 8 percent a year for the last decade, a trend that threatens to continue.

State health care spending across a variety of programs climbed from $886 million in 2001 to $2 billion in 2011, said Streur and Department of Administration Commissioner Becky Hultberg. The total threatens to hit $4 billion by 2020, they said.

Both the state and the nation have to address continually growing costs, she said. "If we don't, our economy is not going to be able to sustain it," Hultberg said. Hultberg and Streur were speaking to the House Finance committee in Juneau, seeking support for the Parnell administration's attempts to rein in those costs.

Some of those cost-containment efforts under consideration include pressuring Alaska providers to reduce costs, finding ways to get state employees or retirees to pay more themselves to make them more conscious of cost, or sending patients out of state for cheaper care.

Other less controversial proposals such as finding more efficient and effective ways to deliver services will sometimes be just as complicated to implement.

That's because health care in Alaska is provided through different programs with various funding sources, legal frameworks and constituencies, including directly for state employees, through union trusts, tribal programs, Medicaid, for retirees, inmates and others, the commissioners said.

Democrat-turned-Republican Finance Committee member Rep. Lindsey Holmes of Anchorage said the presentation was troubling.

"It's worrying to hear that if health care costs are left unchecked they are going to sink the state -- not just state government, but the state," she said.

Streur warned the the federal Affordable Care Act that the Parnell administration has opposed might also drive up costs.

"How much is the federal health care initiative going to cost us?" Streur asked.

The Parnell administration has yet to say whether it will agree to allow an expansion of the mostly federally funded Medicaid program for low-income Alaskans.

Compounding the problem is that some areas that had been hoped to provide savings are failing to live up to expectations.

Streur said that technology was supposed to be able to help cut costs and improve outcomes, but has yet to do so. One area of gain was to be in a reduction of the $70 million the state spends flying rural residents to places they can get care. Streur said he keeps hearing from the federal government about how big the savings are going to be on travel costs and how much better care will be, but has yet to see it.

"The returns I've seen so far just haven't been there," he said.

And he also doubted that the hoped-for gains from limiting fraud would materialize either. "There’s fraud in Alaska, I don't deny that, but don't believe there's millions and millions (of dollars to be recovered ) in anti-fraud efforts," Streur said. One area showing promise is in what's known as a "medical home," having a personal doctor being a patient's primary contact for their medical care.

"We need to put health care back in the hands of primary care doctors," he said.

While Hultberg and Streur didn't yet ask for legislative help, House Finance Committee Co-chair Alan Austerman, R-Kodiak, told them that the committee supported their efforts and stood ready to help.

Contact Pat Forgey at pat(at)alaskadispatch.com