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Alaska health care spending rose to $7.5 billion in 2010

August 16th 7:57 pm | Alaska Newspapers Staff Print this article   Email this article   Create a Shortlink for this article

Alaskans spent about $7.5 billion in 2010 on health care, a new report compiled by the University of Alaska Anchorage concludes. That's an amount roughly equal to half the wellhead value of all oil produced in Alaska that year, and also half of all wages earned by residents.

According to the calculations of Scott Goldsmith at UAA's Institute of Social and Economic Research, with Mark Foster of Mark A. Foster and Associates, that means the cost of health care spending jumped 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, they said in their 12-page ISER report.

Recent estimates say about 18 percent of adults and 9 percent of children are uninsured. Basesd on the 2010 census, that would be about 94,000 adults and 17,000 children.

Federal programs paid out $2.3 billion in Medicaid, Medicare, Indian Health Service, Veterans Administration and other programs. Individual Alaskans paid out $1.5 billion, including employee premiums, out-of-pocket expenses, and individual policy costs.

Private employers paid $1.4 billion in self-insurance, employer premiums and workers compensation. Government employers paid $1.6 billion in employer premiums/self insurance and workers compensation. Local programs paid $45 million, and state programs paid $0.7 billion

Goldsmith and Foster said there are a combination of things driving health care spending in Alaska and nationwide, including 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, and controlling that growth will be a big challenge, they said.

Their report notes that Medicaid is the largest single expense, making up nearly 18 percent of all Alaska health-care spending. Hospitals and doctors account for nearly 60 percent of total spending, with the next largest cost the 10 percent that goes for administering private and government health insurance.

The cost of health care in Alaska remains higher overall because of Alaska's distance from the Lower 48, its many small, remote communities, and other factors, the researchers said. Improved transportation and growing urban markets have sharply reduced but not eliminated that historical difference in living costs.

Goldsmith and Foster also cited several other reasons why costs of healthcare are higher on average in Alaska.

"Alaskans have higher incomes than the U.S. average, and more work for government. People with more income tend to spend more for health care," they said. "Also, about one-quarter of Alaska jobs are in federal, state or local government. Government jobs usually have good health insurance."

The study also determined that Alaska has to compete for doctors and other health care professions; and that small, isolated Alaska hospitals tend to have higher staffing levels per patient than facilities in other states, because they need to maintain enough capacity to meet times of high demand.

The full report is at http://www.iser.uaa.alaska.edu/Publications/RevisedHealthcare.pdf

 

Alaska Newspapers Staff can be reached at editor@alaskanewspapers.com, or by phone at 907-348-2449

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