Recently, debate in the Alaska press has centered around the Department of Administration’s proposal to offer enhanced travel benefits to its AlaskaCare active employee health plan members. Most of the commentary on this proposal has been thoughtful and well-informed, but I wanted to take this opportunity to further clarify our position.
We are considering the addition of voluntary enhanced travel benefits for our members; however, this is only one of many initiatives underway to address unsustainable cost growth while maintaining quality health care for our employees.
In my department, we believe access to good health care is important and want to continue to provide effective health care coverage. We administer or contribute to health care plans for more than 80,000 current state employees, retired public employees and teachers and their dependents.
During the past decade, the cost of these plans has soared. In 2001, the annual cost of state employee and retiree health care was about $280 million. By 2011, that grew to about $630 million, and the unfunded liability for retiree health care ballooned to $4.1 billion.
Health care costs are more than doubling every 10 years, while the oil production that pays for most of these benefits is declining at a rate of 5 to 7 percent annually.
The long-term sustainability of these health plans is in jeopardy. As commissioner of the Department of Administration, my job is to address that problem.
My department is examining both the patient and the provider side of the medical economics equation, looking at what adjustments can be made to reduce the rate of cost growth while maintaining quality coverage. This is a highly complex area, and there are no easy solutions, but we are pursuing the following measures:
On the patient side, we are working to establish a culture of wellness and personal responsibility for health as a workplace value. While in some cases patients are unable to control their health conditions, for many, lifestyle choices and behaviors have health consequences that drive costs. We are working to provide our members with resources, education and incentives to do their part to improve their overall well-being.
By taking personal responsibility, costs can be reduced and quality of life improved. Among the resources introduced this year for active employee AlaskaCare members are Weight Watchers at Work, tobacco cessation and free preventive care, along with new tools to help people with chronic conditions manage their health. We hope to introduce similar offerings to the retiree population.
On the provider side, we recognize the excellent medical provider community we have in Alaska. We want this community to be successful, yet we need to work on containing costs.
We have documented many examples of medical procedures performed in Alaska that are charged at several times the rates of those performed in the Pacific Northwest. While we recognize that costs will be higher in Alaska, they cannot be double or triple the costs in the regional market. I have started discussions with representatives of the provider community over the course of the past year, discussions that will continue.
We are exploring extending travel benefits to members for certain procedures. Elsewhere in the country, employers have found success through regional “centers of excellence.” These programs identify quality medical providers, both local or out of state, and establish discount contracts with them. We seek quality and value. Our members deserve no less.
Alaskans are no strangers to medically necessary travel, but access to out-of-state centers of excellence would be a voluntary option if the overall cost of the procedure and travel is equal or less than the local cost. This choice will benefit all Alaskans.
Sitting on our hands is not an option, but rushing forward without public input is also unwise. We welcome new ideas on how we can slow the growth of these costs to the state while maintaining a quality health care plan. We are engaging in presentations with stakeholders across Alaska on our proposals to address this challenge. If you know of a group interested in such a presentation, please contact me — we welcome the dialogue.
Becky Hultberg is commissioner of the Alaska Department of Administration. She has also worked in the health care industry.