Policymakers have a responsibility to look at both the short- and long-term implications
of their decisions. The state’s current fiscal situation, coupled with rising health-care
costs makes “budget neutrality” highly desirable in decision-making.
In spite of efforts to bend the cost curve, health expenditures have grown inexorably in
Alaska. As of 2009 our health expenditures per capita were the second highest in the
nation. This means that the state spends a larger portion of its budget on health costs,
employers allocate more of employees’ compensation to health premiums, and
households spend more of their disposable income on out-of- pocket costs, premiums,
The evidence we provide in this analysis consistently shows that freestanding emergency
departments charge higher prices for services that are available for considerably less in
traditional settings. Allowing freestanding emergency departments to enter the Alaska
market goes against the many efforts being undertaken to contain health-care costs.
Markets forces explain a significant portion of the high health-care prices charged in
Alaska, but in this case the state has an opportunity to use its regulatory authority to help
prevent even higher prices in the future.
Putting costs aside, in considering emergency services one needs to rationalize the
hospital and clinical capacity across a region and the needs of the population. In the
Alaska health-care system there are problems with coordinating the delivery of care.
Freestanding emergency departments pose the risk of exacerbating that lack of
coordination, if people use them in lieu of seeing their primary physicians—which can
disrupt the continuum of care and potentially hurt outcomes for patients.
Institute of Social and Economic Research, University of Alaska Anchorage
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