Testimony: Senate Bill 93 Health Ins. All-Payer Claims Database

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Senate Finance
Senator Bishop,Chair
Senator Stedman, Chair
Senator Hoffman, Member
Senator von Imhof, Member
Senator Wilson, Member
Senator Olson, Member
Senator Wielechowski, Member

Chairs Bishop & Stedman, & Members of Senate Finance,

As you are well aware, many, many studies have been conducted over the years to understand the reasons for Alaska’s extremely high health carecosts. None of the studies have come todefinitive conclusions, partially because we lack reliable and complete data.

Good data on the provision and consumption of health care services from a variety of sources(both public andprivate payers) is required to thoroughly evaluate how healthcare services are used in Alaska, and ultimately help understand the cost drivers.

As cited in an Alaska Policy Forum report, basic Medicare data was long used by the federal government to come to incorrect conclusions. Once comprehensive data was used later, the findings were nearly the opposite. Accurate data is a key to making good health care policy decisions.

An all-payer claims database (APCD) such as proposed in this bill could allow Alaska to collect de-identified data for this purpose. At least twenty other states currently have some form of an APCD.

When properly structured, an APCD can also be used to simply compare health care costs. To generate the most value from this investment, an Alaskan APCD would contribute to health care price transparency by including a free public user-friendly web interface, allowing consumers to compare costs, while charging fees to commercial entities for more robust data. As stated in our report, “markets work best when cost and quality information are available to purchasers.”

Of special interest to those of you on this committee is the cost of the proposed project—Alaska has had its share of expensive megaprojects which did not deliver on their promises. The federal grant funds now being offered for this effort are indeed enticing and, in our current budget situation, likely essential to such an undertaking.

An important consideration for you is how the state would continue funding this project in perpetuity. User fees from commercial entities can be one part of that. Earlier community discussions about an Alaska APCD considered alternative structures such as those in other states which have funding from private organizations or nonprofits. One suggestion would be to use the grant funds to partially initiate this project, but require a portion of ongoing costs to be sourced by interested private investment, beyond simple user fees.

I would caution the committee to exercise fiscal restraint in the details of the structure and costs, while keeping in mind that an all-payer claims database could become a highly useful tool for our state in helping reduce costs to consumers.

Thank you for the opportunity to testify on behalf of Alaska Policy Forum.

Bethany Marcum, CEO