JUNEAU — State officials are looking at ways to lower the growth of Alaska’s health care costs, including an alternate retiree plan and developing an employee wellness program.
The path the state is on isn’t sustainable, Administration Commissioner Becky Hultberg and Health Commissioner Bill Streur told the House Finance Committee on Monday. Streur said he believes something can and must be done to address the issue.
The state’s health care costs have risen from $886 million in fiscal year 2001 to $2 billion in 2011, Streur said. That includes money spent on Medicaid, for the state Department of Corrections and as part of active employee and retirement programs. Streur said health care costs grew an average of 9 percent a year during fiscal years 2001 and 2010. More recently, he said the average cost per Medicaid recipient has stabilized, but he said he considers that more a respite than any real trend.
Streur said the budget for his department, Health and Social Services, is projected to grow from $2.6 billion this fiscal year to $6.6 billion in 2022, with a number of unknowns, including the impact of the federal health care law and tighter state and federal budgets.
Hultberg said the level of spending is driven significantly by the employee and retiree plans and the state’s contribution to the union health trust. She said it is difficult to make any changes to the retiree plan, because it could be considered a diminishment of benefits and lead to litigation.
Options for controlling Medicaid growth also currently are limited, Streur said. The quandary comes in when it comes to services: there are optional services under the program, such as inpatient psychiatric care for persons under 21 years of age and others that the department believes have been effective. Streur likened the situation to a balloon, where, when you push in at one spot, it bulges out in another.
Payment levels for a standard office visit under Alaska Medicaid are around $220, he told the committee. That compares to less than $80 for Washington Medicaid and about $120 for Idaho Medicaid.
On the Medicaid side, the state is looking at things like managing and reviewing utilization. Streur also talked about disease and case management, making sure people are getting the care they need, when they need it.
As far as employee and retiree health care, Hultberg said she would like to see people become “consumers of health,” and ask questions about the cost of a service or procedure, helping to send a message they care what things cost. She said it would be a mistake to look at the providers as being a problem but said the parties need to work together.
She said the state also is looking at developing an employee wellness program and a “culture of health.” The state also is considering expanded travel benefits or contracting with “centers of excellence” for certain services, something she said some large corporations have done in seeking a better value. She said the state supports local health care but cannot continue to see “double-digit price increases when we’re already so much more expensive than the rest of the country.”
She said the state also is looking at implementing a “plan B” system for retirees that would allow the state potentially to provide a cost structure that would keep pace with inflation and to steer retirees to preferred providers.
Comments (47)
Add commenthere we go again
It seems like these are the same politicians who do not need any part of the Health Care programs under Obamacare. While making those claims it was indicated the State had control of HC cost under control while the feds would do not. Now it seems like the State has no control over HC cost. So are we dealing in facts or political posturing on HC cost?
Start
OK - two risk groups are increasing the costs on the system; smokers and obese individuals. Provide cessation means to the smokers (and then follow with an increase in premiums). Similar steps for obese individuals. Provide them the means to correct the issue. If they are on the path, lower premiums. If they are not, increased premiums.
May seem harsh, but the demographics that cost more should potentially pay more.
Second point- insist that all providers given a cost list for standard procedures. Follow that up with the state publishing the usual and customary charges allowed under the plan. It shouldn't all be a secret.
@Raininak
Your absolutely right, Obesity and Smoking are both voluntary diseases and both are correctable without major intervention, all it takes is willpower over want. They chose to smoke and overeat. they can choose to stop, and they are both the leading costs of healthcare.
Follow-up
One point to make about the differences between smoking and obesity is that there is a distinct difference. Smoking is truely voluntary, while eating is not. Being obese is a different animal that can be addressed. That is why I stated that the individual needs to be working toward the goal. Similarly, I would support no increasing premiums on those individuals activly participating in a smoking cessation program.
More like car insurance?
Make those who use it the most, pay the most. If you smoke and/or are obese, you're high risk. Not unlike someone who has a lot of traffic accidents. More also needs to be done to eliminate fraud and waste.
Causes of obesity
According to the NIH, there are a number of causes of obesity. While some may be attributed to an "inactive lifestyle" (aka "voluntary"), some are caused genetic history and by health conditions- especially hormone problems.
So lumping obesity with smoking is not applicable across the board.
It's amazing that the state doesn't consider premium increases or surcharges for employees who smoke. Maybe it's because some of the decision makers do themselves?
Rain
On the obesity side, I would suggest excluding junk food from food stamp reimbursement. Food stamp recipients already can't buy alcohol and tobacco with food stamps. Include on that list any processed food with high sugar or fat content.
If you're poor enough to need food stamps, you're almost certainly poor enough to need Medicaid. Why should we be paying for the junk food that will lead to the healthcare that we'll be paying for as well?
@Raininak I believe your
@Raininak
I believe your ignoring the overpaid public healthcare workers. Anyone looking for work, Pharmacist Bartlett Regional Hospital $64.97 - $73.89(starting pay)?
I would rather see a poorly educated doctor/nurse than not be able to afford to see neither. Of course all the public employees living off of our tax dollars can see their Bentley healthcare providers.
Junk food
Agree Lat. Completly. Junk food is not food. I once saw a show on the Poor of eastern Iowa. They discussed their plight and issues they were facing but low and behold, what did I see a crap load of soda and energy drink cans all around. That is not food that is a problem.
Ratfishtim. I hear you. Obesity is not as cut and dry as smoking. That is why some good guidelines need to be put into place such as programs to activly manage weight or education programs. I am on the heavy side myself and I know much of it is my own doing (some genetic), I should be tasked with making an effort as well - and I am.
Tammy
Someone sounds a wee bit bitter. A pharmacist is a highly trained and educated individual (It's not an associates degree you know). Competative wages are needed for such positions. I would say that much of the excess cost isn't from the doctors but from the administrators.
That said, the cost side is an important aspect of the problem (not just the users).
And if one is obese as well as smokes...yay...two in one.
Exactly how does requiring some pay more in premiums bring down the costs for others?
Are we really naive enough to believe the insurance providers are going to lower premiums for the masses if we can just get these identified classes to pay more?
A good point has been made here. How many with top state coverage even ask what is being charged, and when do we ask it? Before the visit , during, or afterwards at the billing counter?
"Top state coverage"
Typically is 80% of the allowable costs for an in-network provider. You think there are any in-network providers in Juneau? 20% of a huge medical bill + anything over the allowable charge is still a huge amount of money - they better be paying attention to charges.
Providers are a major problem in Juneau
The State has actively tried to court more providers into their network, but it requires the provider to agree to a set discount or price on services. In Juneau, cost per service is ridiculously high in comparison to the rest of the United States and that puts a burden on the system. Valley Medical is an example of a problem in town. They refused to sign on to the State Network and stick exclusively with Blue Cross because they make more money with that providers structure of allowing them to charge whatever they want. State workers who want to use their facility face not only the high costs associated with their services, but are often paying above UCR (usual and customary rates) out of pocket that is more than anywhere else in town.
These providers know they have a captive audience and they attempt to capitalize on it. It's unfortunate because if you are a State worker looking for standard pre-natal and obstetric care, they are really your only bet in town unless you want completely natural childbirth at The Juneau Family Birth Center.
What the providers aren't seeing is that by agreeing to structured network prices, they will get a funnel of additional patients heading their way. In the case of Valley Medical, maybe they have so many patients it simply does not matter to them. We, however, we sick of paying hundreds extra in UCR even though my wife and I EACH had our own insurances to cover costs. We took our family of four to an in-network provider and I would fully support the idea of increased travel stipends and "center of excellence" out of State. IF it is cheaper to fly someone to Seattle for the same service they would receive in Juneau, I think these providers might start paying more attention when their patients start heading out the door!
I would venture to say 80% of doctor visits do not involve
huge medical procedures.
"The average cost per Medicaid recipient has stabilized."
"...the level of spending is driven significantly by the employee and retiree plans..."
Can't go after this class because they will sue.
Let's go after the food stamp recipients. Easy targets. Won't hear a peep from them.
Let's hit the obese. Following a campaign of public humiliation they are less likely to squawk.
Smokers are a slam dunk. No net.
Want to send a message? Become "consumers of health".
Let your family physician feel the heat a little. Shop around, you may be surprised how much more he/she has been charging you. At the very least you may be pleased to find you are getting the best deal.
charges
@Varnish, I agree. An example is the retiree plan doesnt pay for flu shots but the active employee plan does. A person can go to Safeway and get a flu shot for a low cost, paid out of pocket, but if you go to your Drs office, it costs 3 times as much, and its billed to insurance. Why does it cost 3 times more, I understand the nurse and their time needs to be compensated but its normally a 5 minute appointment.
Also, there seems to be some differences in how Dr offices bill to insurance. Some offices bill a full lab panel to insurance even though it wasnt medically necessary. If a person wants a full lab panel, and its not medically necessary, they can go to the healthfair and get it done for alot cheaper. Granted, they pay out of pocket for it. I know of some very healthy people that game the system and the Dr offices contribute to it which in turn raises costs.
Its my understanding that the active employee plan started covering more preventative care. What are the costs associated with this additional coverage? The retiree plan doesnt cover preventative care that I know of. So it seems the cost increases are coming from the active employee plan. If the State doesnt like the increased costs, why did they approve more preventative care in the plan?
Maybe we should participate
Maybe we should participate in the health insurance exchange under the ACA?
Or maybe signing up for the additional money from the Feds under the ACA?
Or maybe we can get more people on DKC?
Oh, but that would mean the ACA and DKC are good things. Can't have that, can we, Republican hacks? Health care is only for the rich and connected, not working stiffs and the working poor.
Let's not forget.....
that part of the increase in cost to the state is because there are simply more retirees right now. The baby boomer bubble was completely predictable and discussed as many as 30 years ago that I can recall. But no one was willing to put aside the funds in a responsible manner over 30 years, instead of paying for some new pet project that would get them re-elected. Much like the federal government and social secuirty.
EMS
State should also look at how people abuse the EMS system. There are a lot of unnessary trips to the ER that lock up the ambulances that are ment for life threating incidents not colds, hangovers, minor cuts etc etc. Average cost for a ride to the ER is around $500 for basic care and then add in the ER cost on top of it.
J.A. agree - Trips to the ER
Agree whole heartedly. How many people are rushign to the ER or Urgent Care for the sniffles on the weekend? Plan you health care, and for the love of everything, buck up if you are sick sometimes.
Kids and adults both get sick. Watch the symptoms, yes, but don't run for antibiotics every time you fell a little off.
Of course, break your arm - go to the ER.
Preventative Care
Why would the state expand preventative care to retirees when the majority of people don't do the most effective preventative care; diet and excersize. 2/3 of Alaska are overweight. Retirees who are dobule covered under health insurance pay $150(deductable) a year per person.
Employees who are double covered under health insurance have little reason shop around if they only pay $250(deductable) a year(Not including premiums) per person in medical costs.
Agree Swimmergirl...
The employees and retirees have lived up to their end of the bargain. The State is only coughing up a bare minimum to pay down the unfunded liability, then they point to the unfunded liability and say "Oh my, that's just WAY too big!" Amazing it never occurred to these geniuses that BILLIONS may be saved if we pay it down now, as opposed to paying out the nose later - but hey - that's just too damn logical for many of these political morons - even though they were elected to be stewards of our wealth. Alaska and the US will get through this current period of The Last of the Baby Boomers, but they should not do so at the expense of those who were promised a retirement with dignity. The State needs to do the math, and pony up.
Preventative Care
Agreed, but why did the State add additional preventative care to the active employee plan, if like you say, the majority of people dont do the most effective preventative care, diet and excercise.
On the notion of shopping around, people can get flu shots at Safeway or Costco, they can get labwork done at a health fair but to me, the rest of shopping around means the potential of having to go to a different Dr when most offices in town arent accepting new patients.
Also, some of the problem lies with our Governor refusing to implement the Affordable Care Act. The State complains about the escalating costs at the same time refusing to take the additional funding for Medicare and preventative care being offered in the ACA. Its a set-up for fail which I believe they want. They took the same action with the Alaska Class Ferry, they had funding in hand but turned it back and now are complaining about the cost and using it as a reason to nix that project. Its a common theme with the Parnell Admin.
This is what happens when the
This is what happens when the government gets involved. Prices for services continue to increase just to maintain the status quo or the services go downhill.
Reimbursement rates to the doctors and hospitals for Medicare and Medicaid are cents on the dollar. Someone has to make up the dollar difference. That's presently being accomplished by charging higher premiums for those with private healthcare insurance and more tax dollars going to the state employee health plans.
And doctors really don't even know the cost of a service anymore. I bet they couldn't tell you if you asked them. It's different depending on the type of healthcare plan covering the service. A CT scan probably has many different prices - Medicare, Medicaid, private plan, cash payment.
It'll come down to two choices with the public employees - renegotiate health benefit plans or lay off workers. Or actually, there's a third choice - kick the can down the road and let our kids deal with the unfunded liabilities.
All this talk of smoking cessation and weight loss programs being mandated is a little freaky. Too Big Brotherish for me? And the ACLU will come down on that idea in a second - that's discrimination, in today's world.
How about some kind of voucher program and let the insured shop around for the policy that suits their needs? However, that involves personal responsibility and I'm afraid that the American mindset has mostly passed that point with those that are dependant on the government for their well being.
That, in itself, should scare all of us...
did you know
It's easier to get medicaid to pull your teeth than to fix them. Even though pulling teeth actually costs more.
When traveling for medical and any appts have a day break between them they will fly u home & back down (so 4rt tickets when taking a child) than pay for 1 hotel night. a hotel is roughly $100 2 rt tickets over a grand since they pay full price.
I even told medicaid I would pay for the hotel and food I just really didn't want to put my child who had surgery on another round of flights and they said no.
That is just 2 examples... I suspect a lot of people have more.
They spend money like it's never going to run out. Their is no partial plan either its all or nothing.
I make to much for medicaid now but seems to me a middle program would cost less in the end. Where if you in the income bracket that you make too much but not really enough either. Pay 50% or something. Keep people from being pushed to choose low pay or no job to keep ins or work and go without ins.
classifying health care
Rather than vices, I think we ought to base coverage on a person's intelligence. Less intelligent, less coverage. Or how about genetics? if you have a pathological disability or come from a family that gets sick alot, you get less coverage. Oh yeah, and mandatory sterility for everyone except people who can prove they're worthwhile and not just a waste of flesh consuming limited resources. This should cut way down on health care costs.
@PeytonPlace:
I disagree. It would be unlawful and immoral to disenfranchise Tea-Baggers from health care coverage because of their IQ...
@wolfmagic
I agree. The State initially offered the retirement, etc to employees during the pipeline days when the oil rush was on. They were having a hard time competing with wages and benefits offered at the N Slope and keeping & attracting employees so they had to compete, now they seem to want to go back on their promise.
@calypso, I have a better idea, why doesnt the State pay its debts and pay its bills they incurred, like the rest of us have to and stop making promises they cant keep, including promises of major tax breaks to oil companies.
Or maybe
We could start paying people living wages and stop spending more on the military than almost every country in the world combined?
Maybe that might help?
Maybe this isn't the best time to give oil companies an extra $2,000,000,000 per year to sell OUR oil?
@El Boorba
You forgot to add..... an extra $2,000,000,000 per year to sell our oil to companies....who are already receiving Federal subsidies from taxpayers, including Alaskans, all the while making billions in profits.
The state could save hundreds of millions if....
all state employees were required to participate in a healthy lifestyles program. Singling out the obese or smokers won't do the trick....what we need to do is help the healthy stay healthy while assisting the unhealthy in making small changes to decrease their risk factors for chronic diseases.
At the same time we can educate retirees and current employees about how to manage their own health problems and work on reducing emergency room visits and unnecessary procedures.
Simple changes that can be done now with the swipe of the Governor's pen include: all food served in State facilities meets nutrition guidelines, 30 minutes of flex time for employees to exercise, all state buildings smoke free, new hires must be smoke free, food at meetings and parties in state buildings meet nutritional guidelines, subsidized gym memberships for state employees, physical activity and nutrition education in pioneer homes, prisons, youth detention facilities, increased physical education quality and quantity, Alaskan grown produce and fish in school meals, subsidized prices for Alaskan grown products in schools, prisons, hospitals, and state buildings.
It's not "big brother" like to require employees to work on improving their health. State employees have lots of rules and requirements for continued employment - this one just saves us all money. But even though it is a personal choice to eat right and exercise, the environment around us plays a major role in whether we make the right choice or not.....all the Governor has to do is make the right choice the easy choice.