New report suggests Alaska could save by consolidating health plans for public workers, retirees

Aug. 31--Four new state-commissioned reports released Wednesday suggest Alaska could save money on health care by consolidating insurance plans for public-sector workers, retirees and Medicaid recipients.

The reports, from three separate consultants, draw different conclusions about how much the state could save by merging aspects of the plans under a "health care authority." But at a broad level, they suggest the state could gain greater purchasing power, administrative savings and other advantages.

"What's the take-home message? All three of the consultants recommend that the state seriously consider and move forward with the health-care authority," said Sheldon Fisher, commissioner of the Department of Administration. The department ordered the reports.

The reports were mandated by the 2016 Medicaid reform legislation passed by the Alaska House and Senate and signed by Gov. Bill Walker.

They were due June 30, though Fisher said the work proved to be more complicated than originally expected.

The state budgeted about $600,000 for the reports.

The reports examined possible savings from consolidating health plans for state, municipal and school district workers and retirees, as well as Medicaid beneficiaries.

Savings could add up to 8 percent, or $125 million a year by 2025, according to one of the reports, written by Mark Foster, a former Anchorage School District chief financial officer.

Much of those savings would stem from negotiating better prices -- especially for higher cost services like orthopedics -- and relying on more primary health-care visits to head off long-term medical problems.

Another consultant, Maryland-based PRM Consulting Group, predicted smaller savings from steps like merging administrative costs and relying on a different federal payment stream for prescription drugs.

A two-month public comment period on the reports opens Thursday. The Administration Department is presenting them in online seminars throughout September.

For more information and links to the full reports, visit doa.alaska.gov/HCA.html.

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