Alaska health officials on Friday approved spending just $4.5 million of the state’s $272 million allocation from the Rural Health Transformation Program, weeks after missing their own deadline to award the money
Friday’s awards account for less than 2% of Alaska’s first-year allocation. More than $267 million of the funding is still awaiting final approval, with hundreds of applicants — including hospitals, clinics, local governments and Alaska Native organizations — yet to find out if they will receive a share
The slow rollout leaves providers with only weeks to obligate the funding before an October federal deadline, raising concerns that Alaska could struggle to fully capitalize on a newly created federal program
Department of Health leaders, who initially said awards would be finalized by mid-July, said Friday that they would announce additional awards “each Friday as they are finalized.”
Explaining the delay in finalizing awards, Department of Health spokesperson Mirna Estrada said many applications needed additional clarification on budgets, project scope and implementation plans. She also said the Centers for Medicare and Medicaid Services has continued issuing guidance during the review process, requiring the department to adjust its evaluation
“That anticipated timeline has been extended to mid-August due to emerging factors,” Estrada wrote late last month
The $50 billion Rural Health Transformation Program was designed to award $10 billion per year for five years across all 50 states. Alaska is set to disproportionately benefit thanks to a formula that divides a sizable portion of the funds equally among states, regardless of their population size, giving states with smaller populations larger per-capita allotments
Though the Rural Health Transformation Program is intended to help the most remote communities in the country, applicants from every part of Alaska were eligible for the funding, since providers in the state’s urban hubs also serve residents of rural areas
The first round of funding was divided among 19 projects, with an average award size of $241,000. Several recipients were approved for more than one project
Some awards went to Anchorage-based recipients that serve a statewide population; other awards are intended to serve residents of specific communities, including in the Matanuska-Susitna region and the Kenai Peninsula
No projects serving several regions — including Kodiak, the Yukon-Kuskokwim Delta and the North Slope — were included in Friday’s awards
Health Commissioner Heidi Hedberg called the awards “a long-term investment in healthier communities across Alaska.”
“Throughout this process, we’ve heard directly from communitiesabout the challenges they face and the solutions they believe will make the greatest difference. The selected projects reflect those local priorities while helping build a stronger, more sustainable health care system for future generations,” Hedberg said in a statement
The first round of awards comes after Alaska health officials identified more than 200 finalists in June, including health clinics, hospitals, tribes, local governments and other entities that could get a share of the funding. The department narrowed down those possible recipients after receiving around 1,800 applications
Jared Kosin, president of the Alaska Hospital and Healthcare Association — which received funding from the program in the first round of awards — said in an interview that the still-evolving requirements from the federal agency overseeing the program are largely responsible for the delay in issuing awards
“The fundamental flaw continues to come from the design of the program,” Kosin said, adding that it puts a burden on state officials administering the program. “I don’t think it was intentional, necessarily, but I really do think in many ways they’re being set up to fail.”
“It’s a great opportunity for Alaska, but man, it’s going to be challenging to pull this off,” Kosin added. “And I just really hope that the state agency is not the one left saddled with blame, as this becomes more and more challenging, as that pressure builds on this shrinking window of time.”
The projects approved so far highlight the kinds of investments the state hopes the program will support
Spencer Perry, an economist at the University of Alaska Anchorage’s Institute of Social and Economic Research, is among the hundreds of applicants still awaiting a decision. His team has proposed studying Alaska’s specialty-care landscape to identify ways to lower costs and improve access
Federal program managers are “encouraging this money to be spent on things that are trying to take advantage of new technologies to reform the health systems and increase access to care and quality of care,” Perry said in an interview. “The deep focus on technology might kind of miss some of the lower-hanging fruit and more bread-and-butter public health healthcare access policy that we might explore.”
Even if Alaska succeeds in spending the money, some health policy experts question whether the program can offset broader changes to the healthcare system, amid a decline in health insurance enrollment and cuts to Medicaid, which covers the cost of care for one in three Alaskans
The same bill that created the Rural Health Transformation Program also enacted substantial changes to Medicaid, a health insurance program serving low-income Americans. Nationwide, cuts to Medicaid are expected to eclipse the funding available through the rural health program
The Medicaid cuts are set to come primarily through new work requirements, which are expected to go into effect next year. That could cause thousands of Alaskans to lose access to health coverage, according to a state estimate
Here is a full list of the finalized awards announced Friday:
• The Alaska Primary Care Association was awarded $650,200 to implement improvements to Alaska’s Medicare program
• Chugachmiut, an Alaska Native nonprofit, was awarded $627,200 to buy portable X-ray machines for five rural clinics
• Alaska Behavioral Health was awarded $593,100 to expand a program that allows young Anchorage residents suffering from mental health challenges to grow produce in a hydroponic farm
• The Norton Sound Health Corp., an Alaska Native nonprofit serving Northwest Alaska, received $292,100 to implement a new scheduling system
• Camai Community Health Center, located in Naknek, was awarded $250,000 to design a specialty care hub
• Assets Inc., which works to improve employment opportunities for disabled Alaskans, was awarded $249,700 to study the possibility of remote monitoring of disabled Alaskans as an alternative to urban institutional care
• The Alaska Hospital and Healthcare Association received $249,200 to study operations of hospitals in Petersburg, Cordova and Homer, with the goal of making their operations more efficient. It also received $236,100 to recruit healthcare workers
• Medical Park Family Care, an Anchorage clinic, was awarded $225,500 to plan for a new payment model
• Sunshine Community Health Center, a Mat-Su clinic, was awarded $222,400 to implement a new data analytics system that will allow it to bill Medicaid for additional services
• Alaska Impact Alliance, a nonprofit, was awarded $178,600 to improve an app that provides information on social services and public benefits. The organization was also awarded $176,400 for new “community navigator” roles in the Kenai Peninsula and Ketchikan
• Cancer Connection, a nonprofit based in Southeast Alaska, was awarded $109,500 to create a new support network
• Denali Borough received $108,000 to hire a new rural health project coordinator
• A Girdwood health clinic received $300,000 for three different projects. $100,000 will go toward public health and chronic disease management; $100,000 will go toward a new community health worker to serve Turnagain Arm communities; and $100,000 will go toward a Girdwood pharmacy, including to test automated medication kiosks
• Community Connections, a Ketchikan nonprofit, was awarded $74,300 to improve its electronic health record and scheduling systems
• The Nenana Volunteer Fire Department was awarded $50,000 to plan for a new mobile crisis team
This story was produced through the USC Center for Health Journalism’s National Fellowship
