Highlight on Alaska: Will medical tourism save Alaskans from high health care costs?

Alaska has some of the highest health care costs in the country. The Alaska Health Care Commission requested a report in 2011 on the differences in costs between Alaska and five other Western states–Washington, Oregon, Idaho, Wyoming, and North Dakota. The report found that physician payment rates in Alaska were, on average, 59 percent higher than in other states, based on the fee schedules for Medicare, Medicaid, TRICARE, the Veterans Administration, and Workers’ Compensation. For some procedures, such as having a surgeon to insert an intracoronary stent, the cost in Alaska was three times higher than in Washington. To keep costs low, some Alaskans are turning to medical tourism–traveling to a different state for a medical procedure. Health insurers in the state are tolerating the costs of such medical travel, and, in some cases, encouraging it.

Medical tourism

Medical tourism is a growing field of travel, as many countries have lower costs for certain types of medical expenses, particularly elective surgeries that may not be covered by health insurance. In many cases, it involves leaving the United States to obtain medical treatment in another country; however, it can also refer to leaving an expensive state for a less-expensive one. For Alaskans, who may be required to fly to Anchorage for a surgery, the travel costs and time involved do not change much if they travel instead to Seattle, for example. Some risks associated with medical tourism, such as the increased likelihood of blood clots when flying after surgery, would be present regardless, so why not save some money on the surgery?

Health insurers response

Rather than discourage their enrollees from participating in medical tourism, Alaska insurers are making it easier for individuals to receive out-of-state coverage. The state government, which is self-insured, first began its employee and retiree travel program in 2006. According to the Alaska Daily News, nearly 200 out-of-state trips were reimbursed by the state in the first half of 2015. Telecommunications company GCI began offering the same benefit two years ago to its self-insured employees. Most recently, Alaska’s largest group insurance provider, Premera Blue Cross Blue Shield of Alaska, also began offering a medical travel program. According to Premera, its Medical Travel Support benefit reimburses individuals for approved travel expenses when they travel for qualified medical procedures at pre-approved medical facilities in and outside of Alaska, including expenses for both beneficiaries and a travel companion. Premera also says that “because the price of medical care may be lower outside Alaska,” the share of medical costs paid by beneficiaries using this benefit may also be lower.

Downsides of medical tourism

Anchorage’s Alaska Regional Hospital CEO Julie Taylor told the Alaska Daily News that increased medical tourism is a catch-22 that will lead to fewer procedures being offered in the state due to lower demand, and eventually lead to requiring more Alaskans to travel out-of-state for treatment. Demand for procedures is already one reason for the high costs of care in the state, particularly in prices charged by certain specialties. Taylor also noted the danger involved in post-operative care when an individual is thousands of miles away from the surgeon who performed the procedure.

Negotiate first

Many Americans don’t know that they may be able to negotiate the costs of medical care, which could provide “aggressive” discounts for some individuals. Taylor recommends that Alaskans considering flying out of state for care first speak to local providers about options to lower costs.