5 Things Alaska: Medicaid reform, Premera, Providence

I hope the holiday season is wonderful and magical for your family and friends this year. I know we all have our struggles, some more than others. But, it’s a good time of year for most of us in health care to appreciate all that we have, all that we’ve been given – and all that will be called upon us in the new year.

Merry Christmas and happy holidays, and as always, thank you for the support of State of Reform.

DJ 5 Things Signature





1.  Has Medicaid reform stalled in Alaska?

DHSS is seeking public comments on the draft 1115 Behavioral Health Demonstration Waiver application until December 29th. Work on the waiver began in 2016 after the Legislature passed Senate Bill 74, but Alaska has consistently missed self-imposed deadlines for the waiver. This DHSS document shows the final application was supposed to be submitted to CMS on July 1, 2017.

The waiver is not the only part of SB74 that has stalled. The RFP for the care coordination demonstration projects still has not been awarded. When we talked to DHSS at the end of November, we were told the contract was still be negotiated. Negotiations were scheduled to conclude on August 31, 2017 with an effective date of January 1, 2018.

2.  Thoughts on the Providence merger talks with Ascension

The WSJ reported that Providence St. Joseph was in merger talks with Ascension to create one of the nation’s largest hospital conglomerates. This has been an open secret since the summer. Over that time, I talked with more than 20 folks about their thoughts on the rumored deal choosing not to report on the Prov discussion, but instead to let that news come out on its own schedule.

From these conversations, I put together this piece with two things I know and two things I think I know about this deal.  One thing I know:  this fits a pattern of Providence CEO Rod Hochman’s leadership, one established while he was at Swedish.

Importantly, one thing I think I know is that Puget Sound’s Swedish may be carved out of this deal. I understand there has been a push within Swedish to review the arrangement with Prov since last year’s Seattle Times coverage of the neurosurgery unit. Ascension doesn’t apparently want the $68m loss that Swedish booked in 2016.  One rumor I hear is that Swedish executives approached Kaiser about solidifying an already strong arrangement where Swedish provides much of Kaiser’s Puget Sound hospital services.  We’ll see if any of this comes to pass.  Five years ago, I also thought Premera and Providence might merge, and today that is not anywhere near likely to happen, so who knows….

3.  Video: Kevin Barry, Alaska Surgery Center

Kevin Barry is the CEO of the Alaska Surgery Center, an affiliate of Surgical Care Affiliates. Like most health care services in Alaska, surgery costs remain high and it can be less expensive for patients to travel out of state for their care. Kevin joins us in this edition of “What They’re Watching” to talk about reducing the costs for surgeries.

“We have a lot of internal initiatives ourselves and we’re constantly trying to drive the price down for the patient, really looking at where we can reduce the amount of implants we use, talking with our providers to see if they can come up with a plan of what’s best for all of them to use. That’s a big thing we’re working on right now.”

4.  Price transparency in Ketchikan

Inspired by Anchorage’s recent ordinance calling for medical cost transparency, the Ketchikan City Council and Chamber of Commerce are discussing implementing a similar law in Ketchikan. In a statement, Chamber of Commerce President Chelsea Goucher called for an ordinance that would require healthcare practitioners to disclose estimated medical costs to patients prior to receiving treatment.

Similar to these city-wide ordinances, Alaska House Bill 123 looked to create statewide transparency back in February but has since stalled in the Senate Health and Social Services Judiciary Committee. With Anchorage’s ordinance in effect, and Ketchikan potentially on the way, we will be looking for other cities to take similar action. The Ketchikan City Council plans to further discuss this issue at their Dec. 21 meeting.

5.  Premera’s $25 mill to reinsurance program 

In an agreement with the Division of Insurance, Premera Blue Cross Blue Shield will contribute a one-time $25 million reimbursement to the Alaska Reinsurance Program to fund high-cost health insurance claims. The Memorandum of Understanding outlining this deal, states that these funds must be used “solely for health insurance claims in the individual market.”

Premera offered to make the payment after finding that that health insurance claims in Alaska in 2017 were close to their lowest in a decade. Premera’s reimbursement to Alaska’s Reinsurance Program is a significant contribution to the program’s funding. The state has added $55 million to the program so far and the federal government will contribute $332 million over the next five years.