Part 1: Q & A With Deb Erickson, Alaska Health Care Commission Executive Director

The Alaska Health Care Commission is one of the primary drivers of both health policy and public awareness about health care in Alaska.  I interviewed Executive Director Deb Erickson to get a sense of where the Commission would be focusing on in 2012.  This is a 2-part interview, with the second part released Tuesday, April 17.

What kinds of topics will the Health Care Commission be grappling with in 2012?

One cross cutting issue is the lack of a good source of data and analytics for supporting health reform strategies the Commission recommended last year – such as price and quality transparency, payment reform and patient-centered medical homes.  In the coming months we will be conducting a feasibility study and will propose an approach to developing an All-Payer Claims Database for Alaska, which is a consolidated data warehouse with claims data from a variety of payer sources designed to inform health care cost containment and quality improvement efforts.

A new area we’re exploring this year is the employer’s role in health and health care. There are a growing number of examples of corporate leaders from across the country who are not waiting for the government, health care systems, or health insurance companies to reform health care.  They are taking the bull by the horns and implementing health care cost containment and quality improvement strategies in their companies – strategies that are demonstrating results in their bottom line, as well as in the health and productivity of their employees.  In other words – health care reform is being driven from a bottom up approach by the employers who are footing the nation’s health care bill.

Another issue on our 2012 agenda is the quality of care at the end of life.  The one thing we can guarantee with absolute certainty is that we are all going to die someday, but do we know what the best possible care at the end of life looks like?  The Commission will be examining that question and identifying ways to remake the health care system to support the answers.  We’ll also be working to identify barriers to the use of technology for facilitating access to care, and government regulations that hamper innovation and increase costs in the health care market.

Regarding cost, the Milliman rate study that the Commission sponsored last year garnered a lot of attention.  What impact do you think that study has had in terms of awareness in Alaska of the issue of cost?

There was a lot of mythology around pricing and reimbursement for physician and hospital services in Alaska prior to this study.  I don’t think we were very surprised by any of the findings, but having this information now publicly available from a reliable and independent source is changing the conversation.  There is more interest in some form of public reporting of price and quality data.  I think payers are working on becoming more sophisticated in negotiating prices with providers.

Policy makers will be paying closer attention to how pricing levels and provider operating margins trend over time.  Another issue this study really helped illustrate is the cost shifting that occurs between different payer sources, and the juggling act providers have to go through to balance out the books when certain public payers squeeze rates.  There is greater understanding about this, and how it impacts prices charged to private payers and self-pay patients, which should be part of the policy discussion when changes in reimbursement are being considered.

You are very much at the nexus of where the marketplace and policy worlds connect.  How would you categorize the challenges policy makers are facing regarding responding to the pressures the market is facing?

Policy makers have a difficult balancing act to pull off at this point in time.  Their single greatest challenge right now is the continuing escalation in the cost of health care – which is increasingly unaffordable for employers and individual Alaskans, and is forcing trade-offs in the financing of other essential public services such as education and public safety.

The system as currently designed and financed is not sustainable and to ignore the cost challenges would be irresponsible.  But policy makers have to be careful that the cost containment strategies they design don’t negatively impact access to services for program beneficiaries and plan members.  They also have to understand if and how certain reimbursement policy changes might result in cost shifting to private payers.  And they must be mindful of the impossibly complex regulatory environment within which the health care industry operates, and not add to that burden with more rules that make the system more inefficient and costly.

State lawmakers and administrators are also dealing with the uncertainty, along with the industry, of whether and how all the federal reforms under the Affordable Care Act are taking effect and the interplay of state rules and roles and responsibilities under the new federal law.

Part 2 of this interview will come on Tuesday.