Cutting Alaska’s health care costs by sending employees out of state for cheaper treatment might work to trim budgets, but even so it may not be in the state’s best interest, say some who would have to deal with the proposals.
“I can understand why they want to control costs, but this is an approach that’s going to have an economic impact on our providers and our doctors, especially in Juneau where you’ve got so many state employees,” said Jim Duncan, business manager of the Alaska State Employees Association.
Parnell administration officials proposed taking steps to hold down medical costs for state employees and retirees that may include incentives to go to the Lower 48 for cheaper care and increasing use of preferred provider networks.
The state pays about $600 million a year for employee and retiree health care, according to Commissioner Becky Hultberg of the Department of Administration. That budget item has been growing at double-digit rates in recent years, increases Hultberg called “unsustainable.”
She’s proposed that the state should look at incentives for state employees to go south for medical procedures, saying it could provide big savings even after the cost of plane tickets, hotels, and other expenses.
It could also prompt Alaska providers to lower costs that are well above national averages, state officials said. That could save the state money even when Alaskans don’t take advantage of the incentives to get cheaper care outside Alaska.
The proposal was particularly worrying to some, including Karen Perdue, CEO of the Alaska State Hospital and Nursing Home Association.
She said she’d talked about it “conceptually” with Hultberg, but didn’t know the specifics of what the state might propose.
Losing state business could cause serious problems for the state’s rural hospitals, she said.
“They keep their doors open by taking the paying customers and having that volume because they also need to serve the non-paying customers, she said.
“If the customer mix become more of the people who really don’t have the choice to leave town, and the paying customers are leaving, that is a very dangerous situation for a rural hospital,” she said.
That could hurt both hospitals and communities, she said.
“Most of the hospitals in our association are community hospitals like Bartlett, or they are managed by some group and the facility is owned by the community or a non profit,” she said.
Perdue said hospital costs in Alaska are about 30-35 percent higher than in the Pacific Northwest. That’s about how much more food and other items cost in Alaska as well, she said.
“Physician fees are different, they are sometimes quite a bit higher, specialties in particular,” she said. “I think that’s where a lot of Commissioner Hultberg’s attention has been attracted.”
Alaska already pays for some employees to go south when care isn’t available locally, or and when they choose to if it is cheaper.
Dennis Geary, regional manager with the Alaska Public Employee Association, said Alaska’s costs can sometimes be dramatically higher.
“When a colonoscopy costs $6,000 in Juneau and $1,200 in Seattle and I’m paying the bills, why wouldn’t I want to pay the lesser amount,” he said.
Many of the unions representing public employees in Alaska have health trusts where the union makes the coverage decision with a set amount provided by the employer. Geary sits on a health care trust for the Juneau School district.
The unions understand the challenge facing the state, the leaders said.
What Hultberg is proposing is not new, Geary said.
“She’s new to the job, and when she came in she started saying ‘how do we find ways to reduce our cost if we can, but not reduce benefit or services,’” he said.
“It’s not a new concept, but she’s saying it out loud when previous commissioners didn’t,” he said.
Geary said he’d prefer public employees in Alaska be able to stay in Alaska for their health care if the costs were comparable.
“If it’s a wash, its much better to be able to stay here,” he said.
Duncan said he was worried that what starts out optional such as Hultberg has proposed might wind up with employees being penalized if they didn’t go down south for cheaper care.
“To require folks to be away from home, to be away from family members, that can be pretty traumatic,” Duncan said.
While his members are now in a union health care trust, after they retire the state will again provide their health care. Travel can be even harder for older people, he said.
• Contact reporter Pat Forgey at 523-2250, or at patrick.forgey@juneauempire.com.
Comments (37)
Add commentSo why is...
...a colonoscopy $6,000 up here when it's $1,200 down south? Is it the hospital? The doctor? Is it even true?
And why is Parnell fighting the increased Medicaid limits which would be paid for 90% by the Feds? The would reduce the number of non-paying patients the hospitals have to cover.
We can be sure Parnell will drag his feet on every other healthcare measure too. Not because it makes sound fiscal sense or takes care of Alaskans, but because he's all about buffing his tea party political credentials.
Free health care
Let's look at one of the causes of the very expensive health care in AK. Some of the medical providers are in a cartel such that prices are high. Most importantly, the patient (customer) is NOT connected to the cost of the care. Ms Hultberg should provide us the costs per employee of Alaska's self-insurance. How much are the co-pays, if any? How much are the deductibles, if any? How much are the co-pays for prescriptions? How do these compare to other insurance plans in AK?
In sum, the State of Alaska is driving the costs of health care in Alaska to an extreme level. This is because there are NO cost controls. Everything is FREE! And the legislators like it this way because they reap the bennies, as well. Kudos to Ms Hultberg on her attempts to correct this give away system. She should model the State's health insurance after the Federal employees' FEHBP program as a beginning. At least the employees are somewhat connected to the cost.
Bottom line: Ms Hultberg, do something quickly and garner support from those of us who are not State employees and are not crony capitalists who benefit from this unaffordable system.
Reform is necessary
Case in point - Bartlett Regional Hospital's big price hikes have driven many to seek treatment elsewhere ( or not seek treatment at all ). Yet Bartlett responds by raising its rates on the fewer and fewer patients it treats.
Forthekids
I think you need to look into the states health coverage a but more - free? Hardly.
Alaska
The article references costs in Alaska not just Juneau. I'd like to see documentation on what the costs are in Anchorage as well as other parts of our state. I suspect alot of this is the same reason that airfare out of Alaska costs more than most other places, no competition and lower population using those services. I found a section at UWA's website that indicated the cost of a colonoscopy there was around $1700.00 however that was just facility costs, it didnt include physician prices so I'd like to know where the $1200.00 colonoscopy is. Is it some unknown medical facility that most people wouldnt want to go to? Most people who go south to Seattle are using Swedish, Virginia Mason or U of WA. What are the full comparative costs for those facilities including physician prices etc. I would also like to see more stats on the number of people using Bartlett that dont have insurance or have a procedure done and dont pay their bill. Does that play a part in driving up costs and if so, how much? In other words, I would like more info please however the State has said they are already drawing up requirements for a new 3rd provider so if they are already in that process, I suspect they already know how they plan to deal with this. Voucher program, anyone?
a major part of the costs are ridiculous family bene packages
These costs aren't just for workers-they include all the people covered by the retiree plans. Cut the fat and then see how much we have to spend.
it's a shame premiums aren't based on the individual's
efforts in their own healthcare. If you can afford to work against being healthy by eating lots of prepared foods, smoking, drinking and driving everywhere instead of exercising; you can afford to pay higher premiums.
Auto insurance is based on how your actions in driving are expected to impact the company. Heathcare should have a similar requirement for individual responsibility or costs will never be under control.
Do Right
I think you're onto something there.
I'll bet if most people were told by their insurance company that their premium would drop $250 if they dropped 10 lbs, they'd do it in a heartbeat. Amazing what a financial incentive can achieve.
Comment
I am very pleased that Commissioner Hultberg and the Parnell administration have the courage to take on this problem. While I know nothing about the federal worker heath care programs I certainly agree with everything else stated above by FortheKids. Just as with education, government is driving costs up by paying too much; now Becky Hultberg is going to fix that, and every Alaskan should support that.
The only problem
with the car insurance theory is premiums are still on the rise for those that havent had accidents. On my policy, I get a teensy little break for being accident free but it amounts to practically nothing. The other issue involved is insurance company profits. Just recently it was found that Aetna gave $7 million to 2 groups that were fighting the Affordable Care Act saying it was for "educational purposes". Uh huh.
Put All the Cards on the Table
Ms. Hultberg, please provide us the facts and details on the State employee health insurance coverage. If the State puts all the facts on the table, then we can more effectively decide what is driving the costs of health care in Alaska. Maybe, just maybe, the State's employees and retirees are crowding out those with less generous health insurance benefits and those without any insurance. Maybe Alaska is the cause of the high cost of health care.
Let the people decide, once the facts are laid out. Maybe all public employees have "Cadillac" health insurance plans which drive up costs. How about it, Ms Hultberg?
I have to say putting a
I have to say putting a patient on an airplane with the promise of a hotel room and a procedure in Seattle is kinda silly.
Why not attack the elephant in the room - union healthcare plans are waaaaay tooooooo generous with practically no cost to the union member. Heck, why wouldn't they "collectively bargain" with the government to get the best deal - it's a win-win for all the politicans involved, right? No, it's a lose-lose for the people paying the bill - you and me, the taxpayer.
It's a racket, that's what it is and now most taxpayers are aware of the situation because the public sector's lavish benefit plans are sucking the system dry.
Time for reform - up the retirement age, cut the benefits for new hires, more deductions coming out of paychecks for healthcare, less sick leave days and vacation days, etc. Come join the rest of us with the private sector benefits - it's not so bad!!
Calypso I disagree
I don't agree that one can blame collective bargaining for all financial problems. You may be right in saying that healthcare plans are too expensive. But "collective bargaining" has to be just that - both sides, sitting down, arguing over each and every issue, with fact and evidence to support their position, and then coming to some kind of compromise.
Folks in the "private sector" also look out for what is best for them - the best profits possible, the highest return on their investment, their own health care. These are things they have to negotiate with all those who work with or for them. Work until you are seventy years old, minimum sick leave even if you have a debilitating illness, less vacation time??
A few years ago, I contracted to the city to be an archaeological monitor to an excavation. It worked out well at a low cost. But I did notice that on the back of the Miller Brothers' trucks, a little sign that said, "Unions. We brought you the weekend." I respected that.
These things may not be so "lavish" as you assume if both sides at the table said "Let's find some common agreement that we can live with."
Is that too much to expect from "collective bargaining" ?
Union health costs
I am a union member with a government job. I pay $83 per pay check out of pocket. That varies with the number of people on the policy, but not much. I have three people. So that is $2158 per year for the premium. My deductible is $1000 per person per year, then it pays 70% of customary and usual costs, so I often pay much more than the 30%. I also have a $500 deductible on prescriptions, then the co pays are $15, $25, $45. The total out of pocket is $10,000 before they pay 100%. This is NOT a fabulous insurance plan, in fact it is probably in line with what most of you have or a little worse. So put your union bashing sticks away, I am paying a fortune for health care just like everyone.
Really want costs to go down?
Encourage Parnell to take the free Medicare under the ACA. It is free for three years, then the state pays 10%. This is called the affordable care act because if everyone has health insurance, the cost goes down for all. IT IS PREDICTED TO LOWED STATE AND GOVERNMENT EMPLOYEE HEALTH COST BY BILLIONS, oh, wasn't that exactly what this article was about? It has worked in other countries and Massachusetts. It also makes insurance companies keep their premium costs in line with the actually health costs by letting them kept only 20% of the premiums.
Calyso, just a clarification
You said/wrote "Come join with us in the private sector."
I am not asking who you are, but simply "are you an active business person in the private sector" or not?
Perhaps if you are a business person in the private sector, you work alone, are a sole owner, or something like that.
However, if you are a business person in the private sector and have others working for you, are you convinced that these employees should work until they are seventy years old, that they need to reduce their sick leave, cut back on any vacations or time off from work ?? And then say "Come join us"??
If I were working for you, being the senile old person I am, I might still "hit the bricks" and say, "Hey employer, let's sit down and discuss all this. " I guess I'd never be hired by you.
Gee, the Miller Brothers seem to be much more willing to sit down and talk with their employees, even if they happen to be their own children. That's what I found out a few years ago. It seems they are pretty good employers.
Seems like a pretty good gig,
Seems like a pretty good gig.
Excerpts from the..
COLLECTIVE BARGAINING AGREEMENT
between the ALASKA STATE EMPLOYEES ASSOCIATION,
AMERICAN FEDERATION OF STATE,COUNTY AND MUNICIPAL EMPLOYEESLOCAL 52, AFL-CIO
Health Benefit Plan.
Effective July 1, 2010, the Employer contribution will be increased to one thousand one hundred twenty five dollars ($1125) per eligible employee per month.
The normal workweek shall consist of thirty-seven and one-half (37.5) hours in pay status from Sunday midnight to Sunday midnight within a maximum of five (5) days. All full-time employees shall be guaranteed a full workweek.
Sick leave accrued but not used shall accumulate until termination of employment. Upon the death of an employee, any unused sick leave balance shall be paid in cash to the employee's beneficiaries at the employee's current annualized hourly rate of pay
Upon application by an employee who has exhausted accrued sick and annual leave, a leave of absence without pay may be granted by an appointing authority for disability because of sickness or injury. Such leave shall be limited to one (1) month for each full month of service to a maximum of twenty-four (24) months.
Members who separate from State service for any reason including layoff shall receive within seven (7) days a lump sum payment for accrued personal leave in accordance with statutory provisions in effect on the date of separation.
In addition to the wage or salary paid under Article 21, the Employer agrees to pay the Alaska State Employees’ Association Legal Trust Fund four dollars ($4.00) per bargaining unit member in pay status in the pay period for which the contribution is made.
Overtime eligible bargaining unit members who regularly work a thirty-seven and one-half(37.5) hour workweek shall receive overtime for hours worked in excess of thirty-seven and one-half (37.5) hours of work per week at the rate of one and one-half (1.5) times the appropriate rate of pay.
A lunch break of not less than thirty (30) minutes nor more than one (1) hour shall be allowed approximately midway of each shift. An additional lunch period of thirty (30) minutes shall be allowed when a bargaining unit member works continuously for more than two (2) hours before or after the normal shift, and such additional lunch period shall be considered as time worked.
The Employer shall make a good faith effort to make parking facilities available to bargaining unit members.
Return from layoff anytime within the three (3) year period restores the employee’s entire sick leave balance. A laid-off employee may pay the State's insurance coverage for the period of three (3) years while not employed.
HeaLTH CARE
First Parnell was to give away our oil money to the oil companies. He keeps sending state jobs to to Anchorage, and now he wants to sent Alaskans down south for health care. The man needs to get in touch with the people of Alaska, and STOP marching to his own drummer
@eowyn - $166 each month for
@eowyn - $166 each month for 3 people's health insurance. Man, you are getting away cheap and that's why your deductables are high. Hopefully, you're all healthy and by saving on your premiums, you'll beable to afford the deductables, if you need care. About 4 times your premium would be more normal for monthly healthcare premiums with lower deductables.
Now if you have a health savings account you should put pre-tax dollars in there to use for any medical care you may need. Low premiums and pre-tax dollars to pay for needed care are a pretty good deal.
@wally - nope, I'm just a worker...
I know you're solidly on the union bandwagon so we'll have to agree to disagree. However, this "collective bargaining" which you speak so highly of has one missing element at the bargaining table - that would be the one responsible for paying the bills - the taxpayer.
Just remember what happened in Wisconsin. It really was a referendum on public sector unions.
No road fugitive
I personally liked your comment.
Sounds to me like it was a pretty beneficial agreement for some.
However, maybe those representing the State of Alaska might have demanded more. For example, a forty-hour week, not 37 1/2, or lunch breaks or parking facilities could be reduced. There are local bus services and it may not take a person an hour to eat lunch. Maybe the worker should pay more into the health benefits.
If they couldn't agree on things then it would a stand off and perhaps workers would go on strike and risk many things. Or the State might have agreed or made changes.
That is what "collective bargaining" is all about -bargaining.
When one side says "we can't live without that" and the other side says "we can't live with that." Then they both have to decide what is that they can live with.
However, when one tosses in politics and people say that they want to be elected or re-elected to represent us, then it becomes a real mess of politics and what is best for all.
Pardon me for injecting this, but I think it should be the same in our State Legislature - two sides of political parties, the State and Legislature, hammering out, maybe for days or more what each side wants..... then coming to an agreement.
But when one side says "It has to be my way or no way," nothing good will happen. That's just my opinion.
You know what the end result
You know what the end result will be when these public sector union benefits become too burdensome for local and state governments - yup, lay offs. That or bankruptcies. It's happening all over the country. Most of us aren't guaranteed a job for life.
In a democracy a person
In a democracy a person should not need a union to protect them from the goverment...
Some blame is on the union itself...
So I needed to get a treatment that specifically isn't covered by the union, BUT a more expensive one is... so instead of the union paying $400 and my portion of the procedure, we both are going to pay out well over $1,000. How is that for efficiency?
ASEA makes me sick every day. Especially bragging about our "awesome" 5% raises... "woohoo, look what your $80 a month got you... a raise equal to COLA so we can take out $90 now!"
Just don't ever tell union leadership they are a corporation too, as they send Obama $$$ that could be better spent on scholarships for our kids (or heck, even us!) to better our lives.
Really want costs to go down
Loved your fantasy entry. Remember under Obama care (aka Affordable Care Act) the government can giveth and it can taketh. Yes, the federal government (aka you and I) pays for the first few years for new medicaid enrollees, then the State has to fork over 10% of the costs. Can you tell me where the US govt will get the money to finance this? I suppose China is a good bet. Remember, the US govt is broke and your children and grandchildren will be paying for this for years and years. Of course, the US govt can change its mind and tell the State that it must pay 40 to 50 percent of the costs of new medicaid coverage like it does for current medicaid enrollees.
monthly health expenses
According to my pay stub, it comes out to $1,300 a month for single coverage.
To All You Union Folks Out There
Please note that you can opt out of that portion of your dues that goes to partisan political efforts. If you are in the NEA, do you support gun control, abortion on demand, global govt, extreme environmentalism? The NEA does. Read their platform. You will be surprised. Put some money in your pocket and do not pay that portion of your dues that goes to political efforts. It is Federal law.
For the Kids, Good
For the Kids,
Good information...thank you!
Rebuttal
Calypso, no we are not all healthy, in fact I have payment plans with five doctors right now. My take home is $2000 per month, thanks to those "high union wages" I get. It gets much worse and we will be looking into bankruptcy, and that is with a health Savings plan. Next, you are wrong about the cost. Family plans average $13,000 per year in Alaska, which is 3 times the average for the lower 48, but only $3000 more than 2 people. Even if it was just me, I have to pay $ 60 per paycheck.
For the kids, this is not a fantasy. Dont you realize that people like me, and probably you are carrying the entire cost of everyone without insurance right now through our premiums? Where is the money going to come from? Decreased costs for health insurance for federal and state employees, savings from medicare and medicaid because their usage costs will also decrease as the provider costs go down because everyone is capable of payment, and a small tax increase on estate taxes for those with incomes above $250,000. Sounds better that you and me carrying 20% of the cost of Alaska health care. Our children will be paid in better prenatal care and health care for their entire life.
In regards to your
In regards to your statement
“Don’t you realize that people like me, and probably you are carrying the entire cost of everyone without insurance right now through our premiums?”
The same argument could be applied to shoplifters and the price of groceries. Since the prices at Safeway go up on groceries due to shoplifters then all of us that are not shoplifters pay more for groceries to cover the loss incurred by Safeway. The Obamacare answer to this is then for the government to mandate that all citizens buy a pre-paid SafeWay card. If you do not buy this card you will be fined. If people cannot afford the card…it will then be given to them for free, or heavily subsides by tax monies.
So in essence what has happened is that the taxpayer has assumed the losses incurred by Safeway because of shoplifters. Prices may go down (probably not) but only because tax money is being substituted for the higher prices. Since we also pay the taxes there is no real savings and in reality there is most likely a loss because of the managerial cost incurred by creating more government.
Also…if you think Safeway sucks..you still have to give them money via taxes and also have to buy their products or be fined.
Colon tests
Does the union and retiree plan even pay for them?