Contributed by Bill Johnson
The US has the most expensive healthcare in the world. The cost of healthcare in Alaska is second only to Massachusetts. This means that we Alaskans are paying more for our healthcare than anyone else in the world (except residents of Massachusetts).
This is untenable. The cost of healthcare in Alaska is crippling the economy.
Consider the cost of insurance. On an individual level, it is increasing at such a rate it will soon be unaffordable. It drags down businesses, both small and large, because money goes to healthcare and is not invested in wages or infrastructure. Lastly, it is crippling state and local government (35% of the state operating budget is for health costs).
And that is only if you stay healthy. If you need to see a doctor or use a drug or get a test, things really get out of hand. We all know people who take medical vacations… you know, go someplace warm, get your teeth fixed or your knee replaced, save money. State officials have confirmed that some procedures cost 10 times as much here as outside. Juneau, Fairbanks and Anchorage are the top three most expensive cities in the country for healthcare.
There are many reasons why our healthcare is so expensive. The two big ones are hospital care and specialists. The profit for both is enormous. Here are some ideas on what to do:
• Alaska is the only state that has what is known as the 80-percentile rule. This requires insurers to pay 80% of the average price for a procedure. If you are the only one in town providing a service, you effectively set the price. It has been estimated that changing this rule would save the state $75 million per year.
• The government regulatory process that requires a Certificate of Need (CON) stifles competition. It should be changed.
• Right now, providers are paid on a fee-for-service basis. This practice encourages unnecessary costs. Between 1/4 and 1/3 of hospital procedures do not improve the outcome. A bundled care system where the provider is paid a lump sum for individual problem has been shown to save money.
These may sound like small steps, but they could have real impact. It has been estimated that if we can cut the price of healthcare in Alaska by 20%, we would be richer by about 3 billion dollars a year. Or put another way, about $3 thousand a year per person. That makes sense to me.
These are things we can do at the state level while we work for federal action to address this grave national problem. Right now, the Medicare-for-all proposal in the House with 123 cosponsors and the one in the Senate with 16 cosponsors look like the best options.
Make no mistake, I believe that healthcare is a basic human right. It is not a privilege. I will work tirelessly to achieve that goal.