Sullivan: Health care at a crossroads

  • From left to right, Alaska Primary Care Association Executive Director Nancy Merriman, Rep. Les Gara, D-Anchorage, moderator DJ Wilson, Sen. Cathy Giessel, R-Anchorage, and Alaska Chamber President Curtis Thayer discuss the state of health care in Alaska amid ongoing budget deficits at a conference in Anchorage on Oct. 3. (Photo/Naomi Klouda/AJOC)

America’s health care crossroads ahead can follow two different philosophical paths, U.S. Sen. Dan Sullivan told a group of health care professionals Oct. 3 in Anchorage.

One would let states take federal funds and design their own systems. The other would get rid of private insurance and put all American health care into the hands of a government program, Sullivan said, making his statements via video at State of Reform, a one-day conference at the Dena’ina Civic and Convention Center.

The conference brought about 500 professionals together, focused on a series of discussions about health care policy, reform and managing costs.

“Along with Sen. Bernie Sanders, one-third of the members of the Senate on the other side of the aisle would get rid of private insurance and put our health care system into one run by federal government,” he said. “That’s the crossroads and we will continue to debate it.”

The repeal and replace debate over the Affordable Care Act, or ACA, is a dormant discussion for now, Sullivan said. Four different versions — from the American Health Care Act to the Better Care Reconciliation Act to the Skinny Repeal and the Graham-Cassidy Bill — failed to pass by the Sept. 30 budget fiscal year deadline, but Congress will continue to quietly work on solving key issues, Sullivan said.

One example of how that works came as a suggestion from Alaska. A man in addiction recovery told Sullivan that as he increased his income, he was losing eligibility for his treatment.

“He asked why not de-couple treatment from the Medicaid expansion?” Sullivan said. “I took that idea back and worked on it with key senators. We ended up adding $45 billion into the budget for mental health and opioid and other addictions; and that idea came from the Mat-Su Valley.”

While predicting no further bills amending the ACA this year, Sullivan encouraged professionals to keep the ideas coming from trouble-shooting problem areas.

“The best ideas come from the people in the room,” he said.

The resignation of Health and Human Secretary Tom Price over improper charter flights at taxpayer expense was a “huge disappointment,” Sullivan said.

Former Secretary of HHS Price, along with Centers for Medicare and Medicaid Services Administrator Seema Verma, were working closely with Sullivan and his staff on a possible pilot project for Alaska. The details were being hashed out, but the goal of the project was to work to lower healthcare premiums and to increase access to quality healthcare for Alaskans.

Moderator DJ Wilson asked Sullivan how his views on fixing or replacing the ACA differed from Sen. Lisa Murkowski. She had garnered intense media attention for her “no” vote on each repeal and replace bill that failed in July, although she did not ever say how she would have voted on Graham-Cassidy.

But Sullivan said the two had worked together daily, “if not hourly,” on legislation impacting Alaska.

“I’m not going to grade my colleague. We wanted to work (the bill) and didn’t talk to the press,” Sullivan said.

Sound bites in media reports quoting Congressional Budget Office analyses were latched upon to criticize bills or sound alarm bells about millions who would lose their medical coverage.

“Many of those who would ‘lose’ their coverage were people who, if given a choice without the individual mandate, wouldn’t chose to get insurance,” Sullivan said. “But those nuances were rarely analyzed. In the end, we didn’t have enough data and we didn’t have enough time.”

Health care as an economic force

In a discussion of health care’s impact on the Alaska economy, Ralph Townsend, the head of the University of Alaska Anchorage Institute for Economic Research, or ISER, pointed out health care spending can be a negative driving force.

Increasing benefits in health care causes a decline in real wages for employees across the U.S, he said.

Alaska’s high cost of health care has driven retirees out of the state, a potential long-term problem because having a stable retiree population adds to an economy, Townsend said; large medical bills are also a leading cause of bankruptcy.

“Medical tourism” takes patients out of Alaska where they can pay less for procedures in other states, another loss in dollars for the local economy.

But Alaska wasn’t always known as the state with the highest medical costs; in the 1990s, medical costs here were well below other states, Townsend said, citing an ISER study. Something happened after 1992 that researchers don’t yet have a grasp on, he said, but the suspicion is that it relates to more people having access to health insurance in the 1990s, he said.

Bill Popp, the president and CEO of the Anchorage Economic Development Corp., showed Alaska has seen real benefits from a booming health care field for employment. While most of the statistics available date back to the beginning of the ACA in 2014 and “therefore are not helpful, the trend has been for increasing needs in most all medical professions,” he said.

But as the retirement age demographic continues to increase, Popp posed the question of whether the job market will be able to attract enough professionals to fill all the needed jobs.

“Are we going to be able to meet the demands of the future? There are labor shortages in our city,” Popp said.

Medical staff is heavily recruited from outside, and while the economic impact of good paying physician and nursing jobs is a boon to the state economy, caregiving and support work at the other end shows depressed wages and low pay.

But like Alaska’s painful lessons on its oil revenue dependence, the health care economy is dependent on federal dollars with Medicare, Medicaid, Veterans’ Affairs and Indian Health Services.

“Any contracting will cause pain because those federal dollars will go away,” Popp said, noting that the bottom line is the trend of increasing health care jobs will continue. “Just not the sharp rise of the past.”

State budget crisis

Alaska has the highest costs in the nation per capita as the result of a small insurance market with limited provider competition.

A keynote panel assembled at lunch discussed questions about how to fix the intertwined health care and fiscal challenges facing Alaska included Sen. Cathy Giessel, R-Anchorage, Rep. Les Gara, D-Anchorage, Nancy Merriman, executive director of Alaska Primary Care Association, and Curtis Thayer, president of the Alaska Chamber and former commissioner of the Alaska Department of Administration and Department of Commerce, Community and Economic Development.

Thayer advocated a three-part attack on Alaska’s deficit: aligning the cost of government with revenue; creating an endowment model for Permanent Fund earnings and setting stable tax policy.

“Oil companies had their taxes changed three times, three years in a row,” Thayer said.

Giessel talked about the need for transparency in medical billing. Doctors are getting rich off the system, she said.

“I don’t mind a physician who owns an airplane but three airplanes and a helicopter?” she said.

As a medical professional herself, Giessel said she would like to target patient incentives on the front end through wellness care in order to lower the number of Alaskans who consume most of the medical care through bad health.

All of them noted the state’s fiscal crisis is linked to the high cost of providing health care to its employees and retirees, and about a third of the state budget goes to health care overall, Gara noted. On the other hand, federal dollars are helping the state by paying for Medicaid expansion that enables more to have coverage, he added.

But employers are still the largest buyers of health care in the country, said Merriman. Employers need to demand more value for their dollars through a more transparent system.

Policy makers are pinning no small amount of hope on bills afoot in the Alaska Legislature to address the high cost of health care, with the goal of bringing down costs not only to help consumers but the state’s bottom line.

House Bill 123, sponsored by Rep. Ivy Spohnholz D-Anchorage, is meant to empower consumers to make informed decisions abut their health care options by ensuring accessible information on medical pricing. Senate Bill 119, sponsored by Shelley Hughes, R-Wasilla, mirrors the same concepts as HB 123 but carries filing and reporting requirements.

Thayer predicted that in five years, the current ACA won’t exist because of amendments and reforms. In the meantime, individual businesses are struggling and demanding changes.

There’s more work to be done on the state spending level by renegotiating contracts with public employees, Thayer said. During his tenure at the Department of Administration, he said it was able to cut $60 million in insurance costs by finding efficiencies in policies. They had found that in one state health insurance policy, clients were allotted seven teeth cleanings per year.

“That’s a social engagement with your dentist and might not be the best way to use funding,” he said.

Naomi Klouda can be reached at naomi.klouda@alaskajournal.com.

Updated: 
10/18/2017 - 12:51pm

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