Alaska has some of the highest health care costs in the country. And employers in the state are starting to encourage their health plan members to seek care in the Lower 48 for some of the most expensive surgeries and procedures. The companies say the savings are significant and hope the practice puts pressure on prices in the Alaska health care market.
Last spring, Chris Spencer needed a total knee replacement. There are plenty of orthopedic surgeons in Anchorage who could have done the surgery. But instead, Spencer flew to Lacrosse, Wisconsin:
“It kind of blew their mind, why and Alaskan would come down to Wisconsin. Lacrosse, Wisconsin of all places, to have their surgery done.”
The answer to that why question is really very simple. The knee surgery was cheaper in Wisconsin. A lot cheaper. Spencer is Vice President of finance for United Utilities, Incorporated, a subsidiary of GCI. The company has been offering a travel benefit for it’s health plan members since 2011 and this year, GCI followed suit. GCI and United Utilities contract with a medical tourism company called BridgeHealth Medical to implement the service. Spencer says the experience was phenomenal:
“Being the finance person I realized the savings and also the quality was incredible, so it was more, not just monetary, but there were also other reasons, the quality of the surgery, the place and the people and so on.”
BridgehHealth flew Spencer and his wife to Wisconsin in first class. They had a hotel for a week and a care coordinator who attended to every detail of the travel and surgery. Even with those costs added in, Spencer’s surgery in Wisconsin saved his company $14,000. Kathy Carr is Vice President for human resources at GCI. She says GCI spends more than $1,000 per month insuring each employee:
“We are year after year, looking for ways to curtail those rising health care costs, but do it in a way that’s beneficial to our employees. So its a win, win for all of us. And BridgeHealth just seemed to be a logical choice to offer to our employees.”
GCI isn’t the only company encouraging employees to leave Alaska for some surgeries. Premera Blue Cross Blue Shield will start offering a similar travel option for some plans starting early next year. And the State of Alaska is working to expand the travel benefit it already has in place to make it more appealing to employees. The plan used to only cover airfare for lower 48 surgeries and procedures. Now, hotel and car rental will be offered too if the total cost is lower than it would be in Alaska. Becky Hultberg is the state’s Commissioner of Administration. She stresses it will be optional for employees but says cost containment is driving the change:
“Our health care costs for the state of Alaska are more than doubling every decade and that’s an unsustainable trend for any organization.”
The Department’s analysis shows physician fees for certain surgeries are substantially higher in Alaska than the lower 48. The surgeon’s fee for carpel tunnel surgery, for example, is about $1,000 in Seattle, $4,000in Juneau and $4,600 in Anchorage. That does not include additional fees- to pay for the hospital, anesthesiologist and other services that add up quickly. Hultberg wants doctors in Alaska to be successful, but she says health care consumers and providers in the state need to have an important conversation:
“The question is really how much more is it acceptable for us to pay. Should we pay 150% more? 200% more? 300% more? And I think as more and more employers say that the difference right now is too great and they can save a significant amount by going Outside, that will have a positive affect on the local market.”
Hultberg understands that it costs more for doctors to do business in Alaska. And Anchorage orthopedic surgeon Dr. David McGuire says that cost difference does increase health care fees in Alaska. He also points out the state is an isolated, small market and says that drives costs higher. But he’s not worried about the trend of more Alaskans seeking care Outside:
“It doesn’t trouble me at all. Go for it. At the end of the day, we have patients that are going to Singapore, we have patients going to Mexico, we have patient’s going anywhere. I have patients that come up and see me, from Boston, LA and so on, because they know I can do things they can’t get done where they are. So in the end, it seems to be patients should be free to go where they want to go.”
United Utilities employee Chris Spencer says the pain in his new knee is minimal compared to what he used to deal with. And he’s already scheduled surgery to do a total knee replacement on his other knee. He says he didn’t think twice about where to have the second surgery done. He’s heading back to Wisconsin.
This story is part of a reporting partnership that includes APRN, NPR and Kaiser Health News.
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Annie Feidt is the broadcast managing editor at Alaska Public Media. Reach her at afeidt@alaskapublic.org. Read more about Annie here.
