Access vs. cost | Governor’s race | Berkowitz on transparency

Much of what’s happening in Alaska health care can be seen as a collective but indirect policy debate:  should Alaska’s priority in health care be access, cost or quality? Access has been the collective priority in recent decades, but the conversation is changing.

The important discussions shaping how and whether that priority will change in Alaska health care are What We’re Watching this month.

1.  Providence stories lead to resignation

The Seattle Times just printed two of the most powerfully damning stories I’ve ever read about the health care system with Providence and its affiliate Swedish as central figures in the stories.  You should read them both (one, two).  They are part of a new investigative series by the Times on how the financial incentives in health care can corrupt a system – from care delivery to administration. This comes on the heels of similarly awkward reporting from the ADN on Prov “getting rich” in Alaska.

This week, Swedish CEO Tony Armada resigned as a result of the investigation, but not before saying the stories were based on “rumor and misinformation.” Legislators in Washington state are now calling for a new investigation into Providence’s practices, as well as a review of any harm done to Medicaid beneficiaries at Prov. Meanwhile, a neurosurgeon in Texas just received life in prison – for similar practices employed by Prov neurosurgeons as detailed by the Times.

2.  Anchorage addressing health care costs

Anchorage Mayor Ethan Berkowitz has made health care costs a central concern of his administration. The Municipality’s health care costs have increased from $1,064 per employee per month (PEPM), now up to $2,347 PEPM in 2016.  Last week, he introduced an ordinance that would require all health care providers to produce an estimated cost for services on demand for patients, what he calls a “measured” proposal.

Now a grant of $500,000 per year for three years will allow Anchorage to “tackle health care costs” beyond health care purchasing.  The grant funds will support a price transparency project, as well as workforce development strategies, and neighborhood-level engagement on unemployment.

3.  Legislature, the budget and governor’s race

Four years ago this April, Bill Walker announced his intention to take on Sean Parnell for Governor of the State of Alaska. Apparently, the Alaska Republican Party Vice Chair has a list of 46 names of folks interested in running, many of which serve in the Senate. We might expect some of those names to come out in the next few months.

That makes getting a compromise on a fiscal plan extraordinarily difficult. Walker is committed to raising taxes, and the House is holding hearings on an income tax. However, any Republican (particularly from the Senate) that votes for an income tax would be disqualified by most Republican primary voters. In other words, the politics of the pending gubernatorial race will make compromise on a tax package in this year’s session likely beyond reach.

4. Video:  Ward Hinger, Imaging Associates

Ward Hinger understands the business of health care administration as well as anyone in Alaska. He is the CEO of Imaging Associates.  We sat down with him for our latest episode of “What They’re Watching,” where he spent time talking through the need to be responsive to the increasing concerns around cost in the market.

Hinger:  “My group is very focused on containing costs because we recognize that patients are, their deductibles or co-pays are ever increasing. So what we can do to minimize our cost increases helps and passes that savings cost avoidance onto them.”

5.  Access versus cost (or quality)

Each state or market builds regulatory structures to pursue its social priorities. Of the three competing priorities, Alaska has collectively selected access as its focus over cost or quality.  For instance it has one hospital for every 28,000 Alaska residents. Washington State has one hospital for every 64,000 residents. To achieve access, regulations have supported paying providers and hospitals more than peers in other markets, and have limited liability from bad outcomes.

The policy focus of access has been successful. However, Alaska now has among the most expensive health care delivery costs in the most expensive country for health care on the planet, with quality outcomes reported to be decidedly mixed. If Alaska wants to address cost in health care, it must collectively decide that cost should be the policy priority over access – and be willing to accept that some providers will leave the market.