Editor's note: Originally published as an op-ed in the Anchorage Daily News.
Healthcare in the United States is amazing.
Earlier this year, doctors in Cleveland planted electrodes in the brain and arm of a paralyzed man allowing him to move his arm just by thinking about it. In the recent clinical trials of a groundbreaking gene therapy for blindness, a thirteen-year-old boy who, couldn’t see a full moon or distinguish his mother’s face, now can see the stars.
We’ve all come to expect these kinds of medical miracles. We live in an unprecedented age of technical advancement. These breakthroughs lead the good news stories about health care.
The bad news is these breakthroughs come at a cost. Health care is expensive, nowhere more so than in Alaska.
In the United States we spend twice as much per person on health care as the average of all other developed countries. And in Alaska, the costs of many procedures are twice as high as the Lower 48 average. It is actually cheaper for Premera to fly a patient and a companion to Seattle and pay cab fare, meals, and a hotel room, than it is to perform a medical procedure in Anchorage.
Unfortunately, all this spending isn’t making us any healthier. The United States ranks 37th among developed nations in overall care quality, sandwiched between Costa Rica and Slovenia.
So what is the solution?
I have spent more than 20 years meeting with customers, business owners, doctors and regulators in Alaska. If I have learned one thing, it is that the unique challenges facing Alaska require unique, Alaska-centered solutions.
For example, at Premera we are implementing clinical programs designed for the Alaska market, such as maternity management services, free kits for colorectal screenings, and care coordination and transportation services for residents in remote areas to access critical care such as oncology services.
Alaska’s health information exchange—managed through healtheConnect Alaska—represents a major medical breakthrough in its own right.
Thanks to the integration of data among 17 Alaska hospitals made possible by the exchange, doctors are given a more complete look into patients’ medical history. Premera is notified within 15 seconds of when one of our members is admitted to a hospital. This enables us to more effectively coordinate care and better serve our members.
From my health plan point of view, a major barrier to moderating health care costs in Alaska is what has become known as the 80th percentile rule.
This state policy requires health insurance companies to pay out-of-network doctors at the 80th percentile of what others in their area charge. In effect, the doctors collectively determine their own compensation. Further, the 80th percentile rule effectively sets the starting point for what we pay our in-network doctors, so the rule keeps all costs high.
I appreciate the difficulty of balancing costs, while encouraging more doctors to relocate to Alaska. However, I believe this rule, which is unique to Alaska, is a major barrier to lowering costs here.
My company has a role to play too. We must do a better job of reducing the administrative burden on providers, and on our customers. We also must continue to grow our network. By bringing more providers into our network, we believe we also can bring them more patients, lowering the overall total cost of care.
As a health plan, we can provide financial incentives that reward doctors and hospitals for the quality of care they provide rather than for the volume of care. We recently signed the first of these contracts with Pinnacle Integrated Medicine, a multi-specialty medical group operating in Alaska.
The truth is, the most effective ways to combat high health care costs all involve collaboration – between patients, payers, providers, regulators and legislators. None of us can do it alone.
Jeff Roe is the President and CEO of Premera Blue Cross.