Alaska needs its very own health care solution

My health care column last week elicited several thoughtful responses from experts on the topic. That always makes me nervous.

The columns I've written on the health care cost crisis over the last year (about 18 of them) contain almost everything I know. I write three of these things a week. I don't leave much on the sidelines.

[Series of columns explores Alaska's extreme health care costs]

But a newspaperman has habits and instincts that can bring clarity. Daily journalists learn to cut to the chase, ignore things that probably won't happen, and follow the money.

We also listen to ordinary people and tell their stories. That helps you see what matters.

From what I've learned, Alaska needs a solution to our health care cost crisis right now.

For some of us, the cost of health coverage has simply made the state unlivable. I've met people who can't afford to live here or who cannot marry because of the insurance implications.


For businesses, health care makes Alaska uncompetitive. Large businesses can't compete for top employees or match prices with peers Outside. Entrepreneurs need a spouse with a job. You can't start a business and pay for your own health care in Alaska.

For government, overpriced health care has crippled our ability to solve problems. It ate up money intended to improve our educational system. One analyst called school district health plans a massive wealth transfer from teachers to doctors.

Health care costs so much in Alaska that our largest insurer pays members to travel anywhere in the U.S. to get expensive procedures, to stay there in a hotel, with a companion, and to return for a second trip, also with the companion, for follow-up.

Even after all the travel expenses, the insurance company still saves money over doing procedures in Alaska.

I've reported these facts before, but policymakers and experts need to be reminded. They have a tendency to forget that we are in the midst of a uniquely Alaska and uniquely urgent crisis.

Government employees simply don't feel these problems as the rest of us do.

We cannot wait for the impossible dream of a national single-payer health care system. Alaska needs its own solution now.

[Single-payer is a nice dream that distracts from realistic health care solutions]

Consider this goal: Lower Alaska health care costs to the U.S. average plus a cost of living adjustment.

The goal might seem modest, but achieving it would address most of the problems I mentioned above. And finding the path would be much easier than a national solution, because we would only need to deal with factors that make us different.

What is Alaska's unique problem?

It isn't drug prices or the salaries of insurance company CEOs. Those costs affect everyone in the U.S., but our health care cost is vastly higher.

It isn't overuse of health care services. Alaskans use less health care than average Americans.

It isn't even the vast size of Alaska. The overwhelming majority of health care in remote areas of the state is already paid for by government programs, not the private market.

Anchorage isn't remote. You can get a burger here for $5. But we still pay insane health care prices.

The problem isn't even the size of our insurance market.

Single-payer advocates stress the need for larger pools of risk to lower premium costs. That means spreading costs over more people so each pays less.


It is true that a small pool like Alaska's individual market is unstable. Premiums were spiraling to absurd levels until Gov. Bill Walker added more government money through a program to take care of high-cost patients.

But that program, now being copied nationally, treated only the symptom of high individual premiums, not the disease of our higher overall costs. Adding more money, from any source, cannot be a solution to this cancerlike growth.

My suspicion is the real cause is that our unregulated, isolated market has allowed profiteering by providers.

Doctor salaries are higher than Outside, but not by enough to explain our problem. However, doctors who own specialist practices as partners can make millions of dollars a year.

I hear all the time from readers who were treated at these clinics with their frosted glass and granite countertops, paying full price for a brief visit with a physician assistant to be immediately pushed toward high-cost tests or surgery of questionable utility.

Our hospitals and other health facilities overcharge as well, with fee schedules they admit have no relation to the cost of providing services. They employ enormous staffs of billing clerks to negotiate the charges with enormous staffs of insurance company workers — all of whom we pay for.

Unlike other states, Alaska lacks managed care systems that could limit this waste and gouging. Managed care charges by the patient rather than by the service. But state law makes it impossible to operate managed care here. Wonder why?

Local government has made progress in Anchorage by setting up its own clinics for employees. But so far they address only primary care, the most reasonably priced part of our system.

State government holds the key. Its only progress has been to commission a delayed report.

The lack of analytical information about the market has been a problem. The report from the Alaska Department of Administration will be a good step. But it has to be followed by aggressive action.

I'm only a columnist with an English degree, but I have an idea.

I can imagine a single state health care plan for all state and local government workers, with companies and individuals allowed to buy in at cost.

That market-dominating plan could dictate rates to providers. The Legislature could mandate audits of clinics and hospitals to set a reasonable schedule of cost-plus fees, no negotiating allowed.

To the extent this "public option" idea resembles the single-payer "Medicare-for-all plan," I think I agree with the critics of my previous column. But this has a better chance of happening, because it could be done without transforming private insurance premiums into public taxes.

I'd like to hear from experts about why it wouldn't work.

The views expressed here are the writer's and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)alaskadispatch.com. Send submissions shorter than 200 words to letters@alaskadispatch.com or click here to submit via any web browser.

Charles Wohlforth

Charles Wohlforth was an Anchorage Daily News reporter from 1988 to 1992 and wrote a regular opinion column from 2015 until 2019. He served two terms on the Anchorage Assembly. He is the author of a dozen books about Alaska, science, history and the environment. More at wohlforth.com.