Alaska looks to get a handle on rising health care costs 



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JUNEAU (AP) — 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 Feb. 4. 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.

If the state stays on its current path, total health care spending will reach $4.5 billion a year by 2020, which isn’t affordable given the likely downturn in state oil revenues by that time, the commissioner said.

Streur said health care costs grew an average of 9 percent a year during fiscal years 2001 and 2010. In Fiscal Years 2011 and 2011, he said the average cost per Medicaid recipient has stabilized, and the trend is continuing in FY 2013 so far, but he said he considers that more a respite than any real trend.

 Streur said the budget for his own 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.

Editor’s note: Additional information was contributed to this article by Journal reporter Tim Bradner.

Alaska House passes cruise ship wastewater bill

JUNEAU (AP) — The Alaska House on Feb. 4 passed legislation that critics say would roll back requirements that cruise ships meet state water quality standards when dumping wastewater.

The 27-9 vote followed unsuccessful efforts, led by minority Democrats, to amend HB 80, including requiring the location, date and volume of discharged wastewater be posted online.

Rep. Craig Johnson, R-Anchorage, served notice of reconsideration, meaning the bill could be voted on again before being sent to the Senate. A spokesman for the House Democrats said Johnson agreed to do this on behalf of Minority Leader Beth Kerttula, who had an excused absence.

Rep. Paul Seaton, R-Homer, was the only Republican who voted against the bill.

HB 80, from Gov. Sean Parnell, would change how the state regulates wastewater from cruise ships.

Parnell’s Environmental Conservation Commissioner Larry Hartig has said the measure would align rules for cruise ships with those for others that get discharge permits from the agency. Critics say it would reduce protections set out in a 2006 citizen initiative that required cruise ships to meet state water quality standards when dumping wastewater.

The bill would require that cruise ships discharge wastewater in a manner consistent with applicable state or federal law. It would strike the more stringent requirement that discharges meet state water quality standards at the point of discharge. It also would allow authorization of mixing zones if ships meet certain standards for treatment of discharge.

Hartig testified that his department can set restrictions for mixing zones, a point reinforced by supporters Feb. 4. Michelle Bonnet Hale, director of the department’s Division of Water, has said the department doesn’t currently plan to monitor at the edge of mixing zones but has the authority and funding to do so.

HB 80 stems from a preliminary report by a science advisory panel charged with looking at pollution from cruise ships. The panel found none of the advanced systems on ships operating in Alaska waters could consistently meet water quality standards at the point of discharge for “constituents of concern,” ammonia, copper, nickel and zinc.

It also identified “little additional environmental benefit” to be gained by lowering the current permitted effluent limits to water quality standards at the point of discharge. It said a dilution model, developed by an earlier panel, and other studies show concentrations lower than the water quality standards within seconds following discharge of the treated wastewater.

Supporters of Parnell’s plan, including the Alaska Cruise Association, have touted these findings as proof a change is needed.

One of the panelists, marine ecologist Michelle Ridgway, testified against the bill, saying she disagreed with several of the findings, including that fish and marine mammals would be protected under a general permit.

Ridgway said an environmental benefit would be derived and the dilution model and studies were done under “very specific and narrow” assumptions and didn’t adequately consider features of coastal Alaska’s oceanographic conditions. She said she thought the report would undergo further review before being finalized.

Rep. Andy Josephson, D-Anchorage, called the measure a “retreat” from voters’ wishes.

Rep. Les Gara, D-Anchorage, said voters wanted a bill “that protected the world’s greatest fisheries from pollution, from sewage, from copper ....”

He said if this change is made, there will be less pressure on the cruise industry toward new technologies to protect Alaska’s fisheries.

Rep. Charisse Millett, R-Anchorage, said it is hypocritical of the state to hold the cruise ship industry to a higher standard than it requires for Alaska’s ferry system.

Rep. Chris Tuck, D-Anchorage, said maybe the ferry system should be looked at, but he said it pales in size to the “floating cities” that are cruise ships.

Johnson said the report was based on science and expressed frustration that the issue had become politicized.

“Mr. Speaker, either we base it on science, or we don’t,” he said.

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