The State of HealthcareAlaska 2016

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Alaska State Hospital and Nursing Home Association

OUR VISION A unified Association providing effective statewide leadership to address health care delivery challenges affecting all Alaskans.

OUR MISSIONTo be the premier provider advocate bringing unity to the health care community in addressing health care issues and to support our members’ goal to improve Alaskan’s health.

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Partnership for Patients

Alaska results: • 428 harms prevented• $5,891,328 saved

Reported to CMS by HRET

Hospitals and health care: state trends

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Oil production

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Deficit: looks ugly

6http://www.akbizmag.com/Alaska-Business-Monthly/January-2016/Alaskas-Economy/

Deficit: Spending down savings

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CBR = Constitutional Budget Reserve

Projected CBR draw to cover budget deficits:FY2016: $3.9 billionFY2017: $3.2 billion

Projected CBR year-end balancesFY2016: $6.3 billion FY2017: $3.3 billion

The CBR balance at the end of FY 2017, or June 30, 2016, is sufficient to cover only one more year of a deficit in the range of $3 billion.

How we are spending $5.2 billion in FY16

8Graphs from ISER presentation: http://www.iser.uaa.alaska.edu/Publications/presentations/2016_02_02-AnIntroductionAKFiscaFactsChoices.pdf

Medicaid spend on hospitals and nursing homes

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Service TotalsAs a % of total

Medicaid

Total Hospital Expenditures $316,623,045 20.61%

Total NH Expenditures $134,980,754 8.79%

Total Hospital & NH $451,603,799 29.40%

Total Medicaid Expenditures $1,536,207,844

2015 Medicaid data

What do we do now?

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Traditional method – CUT, CUT, CUT• Reduce how much is paid (rates)• Reduce number of people covered (eligibility)• Reduce benefits (services)

ORFundamentally change the way care is delivered and organized

State budget

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• Rate freeze for 2017: implications• Medicaid reductions: $25 million and change• Tribal FMAP policy change: save $29 million• Reduction in behavioral health grants• Continued reductions in DHSS staffing• Medicaid adult preventive dental eliminated• Passed SB 74 Medicaid reform legislation • Will legislators have the patience to wait for

reform initiatives to be implemented?

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Senate Bill 74• Prescription drug monitoring program• Coordinated Care demonstration projects• “Redesign of the payment system”• New fraud and abuse provisions• Telemedicine • Tribal claiming• Health Care Authority feasibility study• Primary care case management• Behavioral health redesign• ER project

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What’s happening this legislative session?• Money, money, money• Concerns about consumers and price of health

care. Price transparency, balance billing, certificate of need.

• Workforce safety – exploring options to support safety legislation

• Medications/drug safety – Biosimiliars, synethicopioid, e-cigs, drugs for terminally ill

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What’s the approach to Medicaid in Alaska?

Senate Majority infographic

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What can we expect?

• Growing shift of health care costs to consumers/patients• Bad debt shift from uncompensated care to patients with

insurance (with high deductibles, co-pays, premium shares) who can’t or won’t pay.

• Patients with increased out of pocket expense will pull back on demand and look for cheaper alternatives. Healthcare much more sensitive to economy.

• Changes in Medicaid at the federal level that could have big impact in Alaska – block grants, per capita cap

Source: Jamie Orlikoff

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What can we do?

• Develop a tolerance for risk and uncertainty• Encourage experimentation• Embrace new delivery methods - advance quality and

value• Acknowledge and harness the power of the consumer• Connect with customers online and through social media• Find new revenue opportunities

Source: Jamie Orlikoff

Thank youQuestions?