The View from Here

Managed Care in Alaska: No Longer an Oxymoron

While it is on the other end of the spectrum, "managed care" has made its way to Alaska and is here to stay. What started with basic pre-authorizations and provider networks comprising only a handful of specialists, is now an organized effort to aggregate populations and leverage “steerage” in exchange for rate concessions—an evolving phenomenon for us, but a decades-old practice in the Lower 48 States. Providers and facilities alike are taking new steps to jockey for positions as preferred providers, focusing on value like never before. We are just getting started.

Budget Forces

With the Alaska economy being dependent on the oil industry, it comes as no surprise that the impact of the downturn will reach healthcare. As it stands, 25 percent of the $4 billion budget deficit is attributed to the delivery of healthcare services, further increasing the pressure to find better ways to provide greater value and increased efficiency, while guaranteeing even higher quality care.

Care Costs

Delivering care in Alaska comes at a premium, so it is somewhat understandable that our prices are higher. Experienced talent acquisition, supply management strategies, utilities, and construction costs are examples of expenses that are less controllable, given our climate and remoteness. Competition is fierce in some specialties, placing us at a disadvantage when recruiting much-needed services to Alaska.

Consumer Impact

Between the economic downturn and loss of 6,000 Alaska jobs in 2016—economists predict another 7,500 will disappear in 2017—our supply and demand curve is shifting and market dynamics are changing. Out of sheer necessity, patients are taking the driver’s seat and making choices based on cost. This is resulting in elective surgery procedures business being lost to the Lower 48 States. This is not good for patients or providers.

What is Certain

Business as usual is over and no one is getting a pay raise anytime in the near future. At Alaska Regional, we are continuing our relentless pursuit of excellence in all outcomes, while focusing on our patients’ experiences. Partnering with providers to improve care for those we serve has never been more important. Efficiency of operations and effectiveness of services will remain a top priority, with value demonstrated through our ability to deliver our best to our patients the first time, and every time, just as we would for our most cherished loved ones. To this end, thank you for everything you do, every day, for our patients, staff and the entire community.