Mayor pitches health care investigation

Proposed ordinance would appropriate $200,000 for industry consultant

Kenai Peninsula Borough Mayor Mike Navarre is hoping to spur the borough to look a bit more closely at the health care industry.


Specifically he is concerned with how the borough interacts with the industry, the cost of providing it to employees, rapid changes at the state and national level and, as the owner of two hospitals, national health care reform, he said.

“If we don’t plan and prepare effectively it could cost us millions of dollars,” he said Thursday.

That’s all the more reason Navarre hopes to pass Ordinance 2011-19-65, which seeks to appropriate $200,000 to hire one or more consultants to help the borough identify the directions the health care industry is taking and sufficiently prepare in a number of ways.

“It is a combination,” Navarre said. “Part of it is that we are focusing on looking at employee heath care costs and seeing if we can find a way that we could get all of the local governments in a cost savings plan ... but we’re hoping it can be broader than that. We’re hoping that we can get to a broader cost savings for everyone on the Peninsula.”

The ordinance is up for introduction at the borough’s Tuesday meeting and up for hearing on Feb. 7.

According to the ordinance, health care costs have “risen dramatically in the last decade.” The borough currently spends about $18,660 per employee for health care, up from $6,055 in 2000. The Kenai Peninsula Borough School District spends about $17,436 in employee health care. 

In June, the borough administration began working with officials from the school district, Central Peninsula Hospital, South Peninsula Hospital and the cities of Homer, Kenai, Soldotna and Seward to consider options to reduce those costs, which are otherwise expected to continue increasing, according to a memo from Navarre.

Navarre said more expertise is needed, however, to identify “potential mechanisms” to help reduce costs.

“How and if we could get the buying power from a combined group from all those entities, it requires a structure that’s not there yet and I don’t know if we have anything yet that really helps us put that group together and whether it can ever work or not,” he said.

National changes and reform could also mean big changes for both hospitals and it would bring peace of mind as well as savings to stay ahead of the game, Navarre said.

“If we don’t stay on top of that, it is going to result is significant impact to the tax payers,” he said.

However, assembly president Gary Knopp said he would need to hear more about the ordinance before he could support it, he said.

“We are not going to just spend $200,000,” he said. “... We just went through that a year ago. We heard from national experts on changing health care trends ... and I guess at this point in time I don’t see an advantage. Unless the mayor has got something strategically I don’t know about, I want to hear what he has to say.”

Assembly vice president Charlie Pierce said the ordinance caught his eye and he’s “all ears” to hear what Navarre has in mind.

“(That is) a lot of money, but again we have already spent $500,000 on answering many of the same questions related to health care,” he said. “I think you could throw it all in one bucket and we should look at it, ask the question, be prepared to hear the answer and ... be willing to accept the answer for what it is.”


Assembly to look at capital priorities, Tesoro assessment

On Tuesday, the borough will also address Resolution 2012-001, which seeks to outline the borough’s state capital funding priorities for 2012.

Knopp said he is curious to see what the administration will put forth as the top funding priorities, although the assembly and the borough hasn’t discussed the matter as a group.

Last year’s top priority was the Homer Solid Waste Transfer Site which was funded to the tune of $9 million. However, the second-highest priority was $10.1 million for construction of a gas pipeline from Anchor Point to Homer and Kachemak City that was left out of the budget.

The gas line could be in a position to take the top spot depending on this year’s discussion, Knopp said.

“I know for Homer the gas line is a big issue for that area, and roads money is always a big issue for us ... but what I think is also important is that we take a look at the submissions the community has made in the packet and see which ones from them we can get on board with and support,” he said.

The assembly will also discuss Ordinance 2011-19-24, which seeks to appropriate $100,000 to the borough’s assessing department for help with the 2012 appraisal of the Tesoro refinery.

Knopp and Pierce agreed it was important to work out an agreement with Tesoro for the future.

“I think the borough certainly has a role and a responsibility of preparing and coming to some determination of what the actual value, real value is of that asset,” Pierce said. 


Brian Smith can be reached at