5 Things Alaska: Fiscal crisis, “Prioritized list”, Mental Health Plan

With the budget dominating all policy conversations in Alaska this time of year, we spent a fair amount of time this month in the weeds on the topic. From this, I’m reminded of Val Kilmer’s famous line from Tombstone: the current fiscal crisis is a reckoning for Alaska that has been coming for some years.

The budget:  it’s not great, but it’s what we’re watching this month in Alaska health care.


DJ 5 Things Signature With help from Emily Boerger.



1. What’s at risk for Alaska health care

In a recent House State Affairs Committee meeting, Becky Hultberg, President & CEO of the Alaska State Hospital and Nursing Association (ASHNHA), testified on the implications of Gov. Dunleavy’s proposed Medicaid cuts on hospitals in Alaska. Hultberg specifically pointed to the rise in uncompensated care, where she testified that a repeal of expansion could result in a 3 to 17 percent increase in commercial health insurance premiums to make up for these costs.

Hultberg also discussed the potential impacts on Alaska’s health care infrastructure should the 30-percent budget cut to Medicaid materialize. She specifically pointed to two in-patient behavioral health unit projects that are already on hold following the budget announcement.


2. Medicaid reforms that work: prioritizing services

One of the most well regarded Medicaid reforms that has drawn bi-partisan praise is the “Prioritized List” in Oregon’s Medicaid system.  Each year, Oregon reviews all of the quality and cost data about various procedures and ranks everything based on efficacy. It has wide ranging implications for cost management and quality outcomes. And, if a service ranks poorly – too expensive compared to better services, or actually does more harm than good – it won’t get funded until things are turned around.  With Oregon Medicaid now adding social determinants to the list of approved expenditures, it looks like those will now be measured for efficacy, too.

Medicaid is a tough nut to crack when it comes to fiscal stewardship.  But this is a reform that Alaska can implement that would bring significant system improvement, allow Alaska to stop funding care that results in more harm than good, and would have a net positive fiscal note associated with it.

3. Mental Health Program Plan draft

DHSS, in collaboration with the Alaska Mental Health Trust Authority, recently released a draft of their 2020-2024 Strengthening the System: Comprehensive Integrated Mental Health Program Plan. The purpose of the plan is to identify key strategies and outcomes to create an integrated mental health program for the state.

In this piece, we break down the nine different goals outlined in the plan — including access to childhood intervention services, support for Trust beneficiaries’ economic and social well-being, treatment for drug/alcohol misuse, and suicide prevention.The plan is available for public comment through April 12, 2019.

4.  What They’re Watching: Chad Jensen

Chad Jensen is the Office Manager at LaTouche Pediatrics, LLC. He joins us in this edition of “What They’re Watching” to discuss meaningful use and value-based care.

“One of the big things we’re watching right now is the transition from meaningful use to value-based models…[we’re] trying to figure out what that transition to a value-based system versus a fee-for-service looks like in the state of Alaska where we don’t have ACOs or big groups that are combining together with multiple specialties.”


5.  Putting Alaska’s fiscal crisis in context

DHSS Commissioner Adam Crum has been tasked with cutting $249m from Medicaid as part of Gov. Dunleavy’s plan to fill a $1.6bn deficit in FY 2019.  His team put a significant slide deck together highlighting how some of that $249m will be found, which is worth a read if you’re into budget detail.  At the same time, the latest revenue forecast came out with this nugget buried at the back:  FY 2019 Unrestricted General Fund (UGF) petroleum revenues are forecast to hit $2.14 billion. From 2020 to 2028, they will never hit that level of return again. Revenues only get over $2 million one more time in the forecast – in 2028.

Yesterday, Gov. Dunleavy released a 10-year “Fiscal Plan.” In it, UGF revenues are the same in FY2020 as they are in FY2026: flat at $2.3bn. Funds to Agency Operations increase only 8% over a decade, while PERS/TRS Contributions increase 45% over the period.  Dunleavy said in a statement: “My plan represents a vision of a smaller State government.”

For perspective:  Alaska has the largest state government per capita by a couple of measures, and it appears to require less of its residents in terms of tax contribution than any other state (that’s before the PFD, which if included would amplify the point).  Alaskans are getting a lot for very little – moreso than any other state in the Union.