Voices of Alaska: It’s not about saving money, it’s about serving people

  • By SENS.
  • Thursday, March 8, 2018 2:30pm
  • Opinion

Around the Capitol, there has been talk about “the high cost of Medicaid” and what can be done about it. Just the other day legislation was introduced in the Senate that would institute work requirements for Medicaid recipients.

Let’s be clear: kicking the economically-vulnerable off Medicaid and the Children’s Health Insurance Program (CHIP) might be one way to reduce healthcare costs, but it is undoubtedly not the right way. And in the end, is very likely to cost ratepayers more. There is no honor in reducing enrollment when it means the neediest among us suffer even more. Our Medicaid system is a safety net which most of us in the legislature are lucky enough never to have needed. In a recession, like the one we are in now, it is even more important to ensure that we don’t rend that net. For some it might mean that a family is only a medical disaster away from finding themselves on the street – damaging families and potentially costing us all more through unrecoverable costs to emergency rooms.

There are real problems with our healthcare system in this state, but it isn’t Medicaid, and it isn’t CHIP. Increases to these programs are symptoms of deeper problems. Rather than covering fewer people, to reduce State Medicaid costs, we need to both fix our economy so people have good jobs, and figure out how to make healthcare more accessible and affordable.

In Alaska, thirty-five percent of the total state budget is devoted to health care, and that number will continue to rise. It’s driving up costs to our education system as health care premiums take a bigger and bigger bite of our budget. Healthcare is affecting our local communities, our businesses, and nearly every aspect of our economy. At the same time, the recession has caused dramatic job loses forcing many Alaskans to turn to Medicaid for health coverage. It’s as simple as that.

Some legislators blame Medicaid rather than looking at these underlying issues. Further, they forget access to basic health care is a good thing, not a bad thing. The goal of Medicaid is to provide health insurance to low-income Americans. The benefits of this access go far beyond just preventative care, reducing the financial burden of chronic conditions, and of people using emergency rooms as their primary source of healthcare. It gives people access to financial security, making it easier to find work and stay employed because those covered can afford to get treatment. It also means that all of us with insurance pay less because we don’t have to cover uncompensated care.

This year, Medicaid will bring about $1.4 billion of federal funds into Alaska, money that rolls through our economy creating an even greater impact as dollars get spent and re-spent (some estimate as many as seven times in the state). This “multiplier” effect shores up our private economy as well. The Department of Health and Social Services estimates that Medicaid expansion alone will bring an additional 3,700 jobs to Alaska by 2019, meaning an estimated $1.2 billion more in Alaskan salaries and wages, and $2.49 billion in increased economic activity across the state.

So, how do we continue to provide care and save lives while reducing the cost of healthcare? Alaskans are innovators, so let’s innovate. Let’s talk about bending the cost curve, rather than denying our fellow Alaskans basic healthcare.

Already, Alaska’s policy of separating out our “high-risk pool” of Medicaid patients has reduced costs for ratepayers and is a model for the rest of the country, with the full benefits still emerging. Another idea the state has been exploring is creating larger insurance pools to include all school districts and state employees, spreading out risk, buying in bulk, and driving down costs. This could save the state and school districts millions of dollars a year.

It is also time to examine the business model of our healthcare industry. Right now, doctors and hospitals make money when people are sick, rather than by keeping people healthy – an inherently flawed system. In Alaska, we could move away from expensive fee-for-service payment and towards “accountable care organizations” which are paid a set price to serve a set population, regardless of whether someone seeks care or not. They have a financial incentive to keep their patients healthy and out of costly hospitals – a win-win situation for business and people. Payments are linked to improved quality of care and reduced costs.

The best way to reduce the total need for Medicaid and CHIP is to get our economy back on track with a comprehensive fiscal plan which will provide a stable and safe Alaska – showing the private sector the stability they need to invest in our future for the long term. A key part of that functioning economy will be ensuring that we get control of our health care costs at the front end through lower prices and prevention rewards, and maintaining a security net for our citizens when times are tough.

Donny Olson is a Democratic member of the Alaska Senate from Nome. Tom Begich is a Democratic member of the Alaska Senate from Anchorage.

More in Opinion

U.S. Senate candidate Kelly Tshibaka and former President Donald Trump stand on stage during a July 2022 rally in Anchorage. (Mark Sabbatini / Juneau Empire File)
Opinion: Tshibaka’s insincere defense of democracy

There are a lot of possible explanations why fewer votes were cast last November

Capitol
Opinion: Humanism and the billionaire class

Compromise is the right thing to do and they should do it.

tt
Opinion: The challenged truths of 3 elected representatives

“Politicians lying is nothing new.”

This photo shows the Mendenhall Glacier Visitor Center. (Ben Hohenstatt / Juneau Empire File)
Opinion: The wrong way to define demand

And as glaciers go, the Mendenhall is only a minor attraction.

Zachary Hamilton (Courtesy photo)
Borough mayoral candidate: ‘The best is yet to come’

Zachary Hamilton is running for Kenai Peninsula Borough mayor in the special election

Love, INC in Soldotna, Alaska, provides homelessness prevention and housing services to people on the Kenai Peninsula. (Photo by Brian Mazurek/Peninsula Clarion)
Opinion: COVID relief funds help homeless children in Alaska

We need to sustain this kind of investment.

Gov. Mike Dunleavy holds a press conference at the Capitol on Tuesday, April 9, 2019. (Juneau Empire file photo)
Opinion: Alaska must act now to capitalize on carbon markets

Alaska has vast forests and coastlines that can provide natural carbon management

1
Opinion: MLK Day clinics offered in the ‘spirit of service and advocacy for equality and social justice’

Attorneys across the state will be spending their holiday as “A Day On, Not a Day Off”

The M/V Tustumena comes into Homer after spending the day in Seldovia in 2010. (Homer News File)
Opinion: New federal funding could aid Alaska Marine Highway System

The evidence is clear that the AMHS is in grave danger of failing and moving into Alaska’s history books

(Mark Sabbatini / Juneau Empire File)
Opinion: I’ve seen the union difference

As a community we can show solidarity…

(Peter Segall / Juneau Empire File)
Sullivan’s irrelevance in defense of democracy

Two years ago this week, supporters of then-President Donald Trump stormed the U.S. Capitol…

People vote in polling booths at the Soldotna Regional Sports Complex on Tuesday, Nov. 8, 2022, in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Voices of the Peninsula: What’s on your 2023 schedule so far?

There is a Kenai Peninsula Borough Special Mayoral Election coming up in February