Alaska Progress Report

Alaska long-term care costs highest in nation

The annual cost of care report from Genworth compares long-term care costs across the nation. As usual, Alaska ranks in the top three in median annual costs across all relevant measures:

• Licensed homemaker services: #1, $55,484 versus $41,184 nationally.
• Licensed home health aide services: #3, $56,628 versus $43,472 nationally.
• Adult day care: #2, $27,040 versus $15,860 nationally.
• Assisted living, one bedroom single occupancy: #2, $66,000 versus $39,600 nationally.
• Nursing home, semi-private room: #1, $273,750 versus $73,000 nationally.
• Nursing home, private room: #1, $232,505 versus $81,030 nationally.

As care moves from home to community to facility the costs go up and the disparity between Alaska and the national average widens. A lot of that is likely due to the cost of care in rural communities, where keeping a facility open is even more expensive. One anomaly from the data above is that a private room costs less than a semi-private room in Alaska; this would make sense if the only private rooms available were in urban areas, where costs tend to be lower, while semi-private rooms are averaged across the entire state to include more expensive rural communities.

Alaska ranks 17th on long-term care for older adults

AARP, The Commonwealth Fund and The Scan Foundation issued a report: Raising Expectations: A State Scorecard on Long-Term Services and Supports for Older Adults, People with Disabilities, and Family Caregivers. Alaska was ranked 17th in the state report.

Four areas with 25 indicators total were graded, and as usual Alaska staked out the extremes:

• Affordability and access: ranked 43rd.
• Choice of setting and provider: 1st.
• Quality of life and quality of care: 1st.
• Support for family caregivers:     41st.

In general, Alaska does fairly well in that we have the lowest number of nursing home beds per capita in the nation. This is considered a good thing because it theoretically means people are getting care at home or in some other setting short of a nursing home. Where we fall short is the extreme high cost of nursing home beds, e.g. in Nome, which are some of the highest in the nation.

Alaska has fastest growing senior population

The always-fascinating United States Census delivers some interesting data on senior citizens at the state level. Turns out that in the decade 2000 to 2010 Alaska's 65+ population grew at the fastest rate in the nation.

The total population grew 13.3 percent in Alaska versus 9.7 percent nationwide. That's nothing: the 65+ population in Alaska grew 53.9 percent versus 15.1 percent (the next highest: Nevada at 48.2 percent), and the 85+ population grew 78.9 percent versus 29.6 percent (next highest: Nevada again at 77.7 percent).

Alaska is still the youngest state out there, but the increased availability of services, especially health care, is allowing many older Alaskans to age in place and, not inconsequentially, contribute $1.5 billion a year to the economy.

State data on long-term services and supports

We're not even going to try to summarize this new report: On the Verge: The Transformation of Long-Term Services and Supports from the AARP Public Policy Institute. Here's what they say: "Many states are undergoing or are about to undergo a dizzying array of long-term services and supports (LTSS) transformations. The lagging economy and increased demand for publicly funded LTSS are placing pressure on state policymakers to find solutions.

"As a result, many states either have or plan to implement Medicaid Managed LTSS, with 12 states having existing programs and another 11 with plans for implementation. At least 28 states are focusing on improved integration of care for people who are eligible for both Medicare and Medicaid. Many states used the economic downturn as an opportunity to balance services from institutional to noninstitutional settings, with 27 states reporting that home and community-based services census increased from fiscal year (FY) 2010 to FY 2011 and 31 states reporting expected increases from FY 2011 to FY 2012."

There is a ton of data on the states, so go crazy.

2011 Alaska Health Care Commission identifies challenges, solutions

From the 2011 annual report of the Alaska Health Care Commission, three challenges (click through for solutions and next steps):

Health care cost increases in Alaska continue to outpace inflation.

• Health care spending in Alaska reached $7.5 billion in 2010, a 40% increase over 2005.
  State government’s portion of this bill was close to $2 billion.
• At current trends health care spending is expected to double to more than $14 billion by
  2020. By comparison the wellhead value of oil produced in Alaska in 2010 was $16.4
  billion and is projected to be $18.6 billion in 2020.
• Since 1982 the Anchorage Consumer Price Index increased 95%, while prices for medical
  care in Anchorage over that time period increased 320%.

Health care is increasingly unaffordable for our employers, families.

• At $11,926 per employee, Alaska has the highest average annual cost for employee health
  benefits in the nation - twice what employers in the lowest cost state pay.
• Fewer Alaskan employers are offering employee health benefits, dropping from 35% to 30% of small employers between 2003 and 2010.
• The average cost of health care premiums in Alaska increased 51% for single coverage and
  35% for family coverage between 2003 and 2010. The average annual commercial health
  insurance premium for family coverage in 2010 was $14,230.
• Despite the fact that Alaskans utilize roughly the same amount of care, health insurance
  premiums are about 30% higher here than in comparison states.

Health care prices paid in Alaska are much higher than in comparison states.

• Different payers (Medicare, Medicaid, Workers’ Compensation, commercial health insurers,
  TRICARE, and the Veterans Health Administration) pay different prices for the same service.
• The average reimbursement for physician services in Alaska is 60% higher than in
  comparison states for all payers combined – 69% higher for commercial health insurers.
• The difference in reimbursement for physician services varies depending on specialty. For
  example, Alaskan pediatricians are paid 43% more, while cardiologists are paid 83% more.
• Commercial health insurance reimbursement for private sector hospital services is 37%
  higher than in comparison states; Medicare pays our private sector hospitals 36% more.
• Alaska’s higher medical prices are due in part to higher operating costs for providers
  resulting from a higher cost of living, more costly employee benefits, transportation and
  shipping costs, fuel prices, and workforce shortages.
• Higher prices are also due to high physician pricing power compared to other states, and a
  high average operating profit margin for the private hospital sector.
• Low Medicare payment rates create upward pressure on prices for other payers.

Health care costs higher in Alaska

The Commonwealth Fund has more data on the obvious: health care costs more in Alaska. People in the industry will tell you that health care in Alaska costs are more than half again what it costs in the Lower 48. The Fund's latest report shows that Alaska is above average both for premiums for families and deductibles for single people.

Alaska scores at the bottom on way too many indicators of health, yet we were the only state not to take advantage of Federal money to study health exchanges for extending health insurance to all Alaskans. The Alaska Health Care Commission recently completed its draft recommendations and findings, and they are available for public comment until December 2.

Alaska has highest health costs per employee

From an October 6, 2011 press release by PlanSponsor.com: "According to a recent survey by United Benefit Advisors (UBA), Alaska has the highest average annual cost (AAC) per employee for employer-sponsored health plan coverage, at $11,926.

"The survey, titled UBA 2011 Health Plan Survey lists the most expensive and most affordable states for employer-sponsored health plan coverage. After Alaska, the top five highest AAC per employee states included New York, at $11,308 AAC; Massachusetts, $11,004; Connecticut, $11,000; and New Jersey, $10,642.

"Mississippi has the lowest ACC out of the five least expensive states at $6,282. The lowest five states also included Arkansas, $6,741; Kentucky, $6,801; Idaho, $7,029; and Arizona, $7,119."

Alaska has third highest prescription drug discount

The bitterly contested Patient Protection and Affordable Care Act, a.k.a. Obamacare, passed last year included provisions designed to close the Medicare Part D "donut hole" by the year 2020. Right now, Part D beneficiaries pay the first $295 out of pocket. From $295 to $2,700 they pay 25 percent and Medicare covers the remaining 75 percent. From $2,700 to $6,154 they're in the donut hole and all costs are out of pocket. After that Medicare kicks in again and only 5 percent is out of pocket. Got it?

Anyway, Alaska has about 65,000 Medicare beneficiaries, most age 65 plus and many on fixed incomes that can really feel the pinch in the donut hole. Starting January 1, 2011, people who hit the donut hole were eligible for a 50 percent discount on brand-name prescription drugs. 886 Alaskans have benefited from the discount, saving over half a million dollars for an average discount of $608.75. Only Delaware and Vermont residents received a higher average discount, $636.44 and $618.14 respectively.

Health care spending in Alaska: $7.5 billion

Health-care spending in Alaska reached about $7.5 billion in 2010, according to new estimates by Scott Goldsmith of ISER and Mark Foster of Mark A. Foster and Associates. For comparison, that's close to half the wellhead value of all the oil produced in Alaska in 2010. The definition of health-care spending is broad, including not only spending for hospitals, doctors and medical tests, but also prescriptions, nursing homes, medical equipment and more. The researchers found the following:

• Health-care spending in Alaska increased 40 percent between 2005 and 2010, up from $5.3 billion to $7.5 billion.
• Individual Alaskans directly paid about 20 percent of the health-care bill, state and federal health programs 40 percent, and private and government employers 40 percent.
• A combination of things is driving health-care spending in Alaska and nationwide: new technology, income growth, medical-price inflation, changing insurance coverage and a growing, aging population.
• At current trends, health-care spending in Alaska could nearly double by 2020, climbing to more than $14 billion. Controlling that growth will be a big challenge.

Read the full report here.

Alaska caregiving valued at $1.1 billion in 2009

And now for a walk on the wonky side. A new report from AARP shows the value of family caregiving in Alaska in 2009 to have been $1.1 billion. This was calculated based on an estimated 88,000 caregivers at any given time, 84 million hours of care total and a value of $13.10 per hour.

The report compares the ratio of the economic value of caregiving to Medicaid spending by state in 2009, for three different measures. For total Medicaid spending Alaska's ratio was 1.03 versus a national average of 1.25. For Medicaid long-term services and supports Alaska's ratio was 2.9 versus 3.8 nationally. For Medicaid home and community based services Alaska's ratio was 4.4 versus 8.2 nationally.