Fairbanks Memorial Hospital

The emergency entrance to Fairbanks Memorial Hospital June 29, 2017.news-miner photo

FAIRBANKS—Fairbanks and statewide hospital officials are concerned about potential effects the GOP-led Graham-Cassidy health care bill will have in Alaska.

"We’re obviously very concerned at the amount of money this bill could cut from the state," said Becky Hultberg, president and CEO of the Alaska State Hospital and Nursing Home Association. "As of right now, it looks like the bill could result in significant decreases in funding for Alaska."

Hultberg said members of her association share her concern.

"We have not officially polled our membership, but all of the feedback we are getting right now is against it, so I think it’s safe to say we are not supportive of this bill," she said Thursday.

Hultberg's biggest concern is the idea of block grants, a form of funding for the states and which the bill relies on heavily. Through the Graham-Cassidy bill, states would be given a certain amount of federal funding and would create and fund their own health care programs as they see fit.

"One thing that has not been reported on as much as it maybe should be is the impact of the block grant program on the state," Hultberg said. "It makes the state responsible for setting up a health care program on its own under the block grant, which is a very complex process. And many states are not equipped to do that. It would be 50 states of chaos."

Dr. Greg Johnson, CEO of Foundation Health Partners, shares Hultberg's concern regarding funding but thinks block grants may work as long as the federal appropriation is enough. Foundation Health Partners runs Fairbanks Memorial Hospital, Tanana Valley Clinic and Denali Center.

Johnson said the risk to the Fairbanks facilities is greater, however, now that are locally operated in addition to being locally owned. The three facilities became locally operated in January of this year.

"We’re definitely looking at all things that happen in the market," Johnson said Thursday. "It’s all important to us now."

Because the centers are locally owned now, all profits made by the foundation go back into the medical centers. But profits are small and could be negatively affected by a change in health care programs, Johnson noted.

"We've got a great facility here, but that margin that we run is a thin margin," Johnson said. "It’s single digits, and we’re hoping to stay in the position this year, so any disruption to the payment system could seriously disrupt us."

The cost of health insurance premiums needs to be addressed in Alaska, Johnson said.

"Much of the conversation revolves around affordable care, cost-share subsidies and pre-existing conditions, and I think the Affordable Care Act made an attempt to fix some of those underlying issues, but in retrospect it was good in some areas and lacking in others," Johnson said. "On the cost side of things it hasn’t done all that it could to help control cost."

Johnson said he is less concerned about the idea of block grants than he is about an overall lack of funding.

"From Alaska’s perspective, there’s still that cost consideration," he said. "If the cost considerations are given to Alaska, I don’t think we should be fearful of something like block grants so long as the funding is there."

Jeff Cook, president of the Greater Fairbanks Community Hospital Foundation, the parent entity of Foundation Health Partners, said he shares Johnson's concerns but was unavailable for further comment.

National groups such as the American Hospital Association and the American Medical Association also oppose the bill.

Contact staff writer Erin Granger at 459-7544. Follow her on Twitter: @FDNMPolitics.