Price vs. Cost: The Difference that Matters in Alaska’s Healthcare Debate


Health Care Complexity: A Letter to the Anchorage Daily News

In his commentary, Jim Grazko argued that repealing the 80th percentile rule is crucial for reducing Alaska’s high health care costs. However, Sandra Heffern believes that simply bringing health care costs into the network and controlling payments is not enough. She explains that there is a difference between price and cost, with insurers like Premera focusing on the price they pay and healthcare providers concerned about the cost of providing care.

Heffern notes that Grazko compared Premera Alaska’s healthcare “costs” to those in Washington but failed to provide any comparison to other commercial insurers like Aetna or Moda. She adds that it would be difficult for Premera to compare the amounts paid for healthcare across multiple payers as Alaska does not currently have the structure to collect or analyze this type of data.

Heffern also cautions against thinking that repealing the 80th percentile will be an easy solution to reducing Alaska’s high health care costs. She emphasizes that health care pricing and costs are complex, and providers are striving to provide high-quality care for Alaska patients.

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