“80th” percentile rule studied

The state Division of Insurance is still considering changes – if any – to the so-called “80th percentile rule” that requires insurers on private and public health plans to pay a minimum at the 80th percentile for specific medical services. Many blame the rule, adopted originally to protect consumers, for adding to upward pressures on health care costs. That could happen because if there are a limited number of providers, for example for specialty procedures, the most expensive provider will influence the average. If rates are raised the average is ratcheted up.

The state’s Office of Budget and Management commissioned a study of this and the University of Alaska Anchorage’s Institute of Social and Economic Research found that the rule may have contributed to between 8 percent to 25 percent of annual growth in Alaska health costs of $376 million from 2005 through 2014. Alaska spending on health increased from $4.8 billion in 2005 to $8.2 billion in 2014, ISER found. ISER’s report was published May 16.

Wrangell Medical Center: South East Alaska Regional Health Consortium is still working on due diligence on the acquisition of the municipal Wrangell Medical Center to SEARHC. The deal is to close Sept. 1. SEARHC, a tribal health consortium, would make new investments in the small hospital.