JON KUMIN: Please do, as you have questions, hold them up, and we'll get them up here. We have actually a number of them to start. And I'll just -- here's one that's probably for Don, and we can just have you guys rotate through and use the mike if you need to.

We have multiple health care systems in Alaska. We have, you know, your system -- actually, the question is, can we afford to sustain two health care systems in Rural Alaska. And a side question to that is some concerns that you hear about is access for non Native peoples to some of the great facilities that have been built out there. Could you comment, Don, on that issue? Thank you.

DON KASHEVAROFF: Yeah, we have more than -- yes, more than two different health care systems. We have, I don't know, maybe up to seven health care systems. I mean, we have the Native Health Care System, which is working together, but we're also independent folks in different regions. And for the access, for the non Native's access to the facilities out in the regions, it really is a determination each region makes, that each village makes. But my understanding from most of them, allow access, and we want access. We have to -- it can't be free access. The law says that if we allow non Natives health service, we have to charge them for it, so we can't give it free. But most all of them try to give it free -- I mean, try to give it, because it adds more money, more funding into the pot.

The Indian Health Service has always been underfunded. The estimate is around 50 percent is how much funding we have, and that's why we work hard to supplement our revenue with all the third-party medical insurances.

In Anchorage, we're not going to be opening up to non Natives. It's just -- there's good hospitals here that non Natives can access right now, so we have no reason to. But if you're out in the village or even a regional that doesn't have health care service, those folks, I believe most of them have already opened up. Did I cover.....

MR. KUMIN: Do you want to add to it?

PAUL SHERRY: Yeah, Don quickly commented on the other systems. From my perspective, you know, we've got multiple systems here in the state, just as nationally. The Department of Defense has a complete health care system for this state. The Veterans Administration has a health care, a multi-million dollar health care system for your veterans. The Native Health System we talked about. There's a comprehensive private and community hospital system for the state. The State of Alaska has a health care system for a certain scope.

And so, you know, we need to look at the issue before us as one of effective and appropriate coordination of system. I don't think the DOD is going to merge their system with the tribal one. You know what I mean? I see the continuity of the types of systems that we have.

The issue, the challenge is really how do we make it work efficiently in a cost-effective manner, and where there aren't -- where there isn't the safety net hole for the -- I'm not sure what number we're using right now, for the uninsured in Alaska. 40,000? 45,000 is the number as I understand. The challenge is how do we work with what we have to provide support for those folks in my view.

MR. KUMIN: Thank you, Paul. There are a number of questions here that deal with funding. Probably the most fundamental is a question about funding in the future. You hear anecdotally that the per capita spending on health care, Alaska Native health care, on the part of the Federal Government is several times the national average, you know. Is that true? Is one question. Then the next question is, is that sustainable? Is the current level of funding that comes from the Federal Government sustainable post Senator Stevens, and is that a concern of yours?

MR. KASHEVAROFF: Maybe we'll both get this one. We had -- the last couple of years there was a big push in the Lower 48 talking about the funding and is there any disparities, and is Alaska getting more than it should be, because of our great Senator there. And through the studies they found out that the average federal employee has a benefit about 5,000, $5500 is what the average federal employee gets in health benefits. They found that on the Indian side, it's around 15, $1600 nationally. And Alaska is just over 2,000, or somewhere right around there. But, of course, Alaska has a much higher cost of living than most Lower 48 places. And maybe Anchorage, if you live in Anchorage like I do, my cost when I go back to D.C. is about the same, but as soon as I drive out of Anchorage and go to the store, I can see it's a lot higher anywhere outside of -- in Alaska outside of Anchorage. So the state -- they did show that even if Alaska has more money than the rest of IHS, that the cost of living negated that, and all IHS, including Alaska Natives, were underfunded by at least half or even more than that compared to what a federal employee makes elsewhere, judging that to be, you know, maybe a normal population. So the funding issue is that, no, we don't have a lot more money than we should.

The question about sustainability, all of our funding comes through the Indian Health Service, and we're right in there with the rest of the areas in the Lower 48. And is that going to be -- when Senator Stevens retires one of these days in 10, 20 years, it's not going to be that all of a sudden Alaska is cut out, because our mix is with everybody else, so, you know, the new money comes out, it goes in the same formula, we're in those formulas, and so we'll get a share of it.

MR. KUMIN: Could you clarify one part of your answer for us? You mentioned that funding per capita is about half of federal employees. Is that federal employee's health care cost that you were -- health benefits you're referring to?

MR. KASHEVAROFF: Correct.

MR. KUMIN: Okay. Thank you. Paul, did you have something you wanted to add to that?

MR. SHERRY: Don captured it pretty well. You know, we've done a lot of comparisons, both nationally the Indian Health Service has, and locally we have. And there's a little bit of confusion about numbers when you throw them around. I mean, we put up on the board 700 million for the system, but a lot of that is capital improvements, so you've got to adjust that off. We feel -- I mean, my sense is that we're spending about 4800, $5,000 per beneficiary here in Alaska. And is that enough? We think that comparison to what the cost is for the average Alaskan, the average American, given the high costs in the Bush, we are behind the curve. And there's not too many study -- I don't think there's any studies that would show that we're more well-resourced than an average American or an averaged Alaskan.

MR. KUMIN: Thank you. A specific question. How is Universal Services Funds spending reflected in your budget dollars, and maybe you could explain to all of us what Universal Services Funds spending is. Thank you.

MR. KASHEVAROFF: Universal Services Fund is a -- I'm not sure if it's a law or it's a -- I'm not sure exactly what the terminology is, but basically if you're living in rural Alaska or rural America for that matter, you can apply for a subsidy for data transfer, so folks have a data line between a clinic and a hospital that transfers like medical data back and forth. They can get a subsidy to help pay AT&T or GCI or whoever is providing that line, and sometimes the subsidies up to 85, 90 percent.

Now, the Alaska health system does use Universal Services Fund. ANTHC itself does not, but if you're in Bethel, or you're in Nome, you will probably have a connection between your hospital and our hospital, because we transfer health data all the time, because if you're -- our goal is no matter where you go in the State, and you're a Native walking into a hospital, they should be able to pull up your medical record, because that's a good customer service deal to have. It's really good for those offices to be able to know that information. So they do have the data lines, and they are subsidized by this Universal Services Fund, but I'm not sure of the total amount that is spent on it though.

MR. KUMIN: Thank you. There are several questions that deal with I think a related topic. One is the working relationship between Alaska Native Health organizations and CDC, the Center for Disease Control, and are there ways to improve CDC's usefulness. But there's really a related question that deals with preventative medicine, and the trend in certain diet, and we're all aware of -- you read about almost an explosion of diabetes, and I can comment personally as someone who's worked in rural areas for 30 years, the diet has trended toward candy bars as we know, and pop, and is there -- are there efforts underway to work with CDC and /or other organizations to really focus more on preventative medicine, and not just deal with it after the fact?

MR. SHERRY: Great question. I'll talk about CDC for just a minute. If anybody doesn't know, there's a three-story building behind ANMC that's the CDC Arctic Investigations Program for Alaska, and they do a great amount of great work here. And the consortium actually employs the people and assigns them to CDC. We've got lots of agreements, and we've got a lot of both research and intervention projects going on with CDC. It's a strong partnership that predates the consortium, and we're going to continue.

Yes, it is a matter of bringing more resources to bear on the prevention side. I mean, what we're doing right now is we're spending 280, $300 million a year repairing people, and not enough money on the front end helping people become healthy and stay healthy. I use five words. I use, the acronym is DATES, and they're for all of us Americans. Diet, alcohol, tobacco, exercise and safety. 90 percent of what -- and, Al, you can confirm this, too, with us, 90 percent of what we're dealing with is because of diet, alcohol, tobacco, non exercise and safety problems. They're behavioral problems. And we can double the number of physicians and clinics out there, but if there's not a change in, and I'm talking to you guys as well as to our beneficiaries, that's what's causing us to die and that's what causing us to bear huge medical expenses at the end of our lives. So we're gradually, like I think everybody else, trying to put more resources into behavior change and prevention. It's on the TV. You have lots of help. What is it that helps people get over the point where they help keep themselves healthy so we're not in this repair mode all the time. The vision I see for the future is that with additional federal resources, maybe even some state money, who knows, we can invest in these kinds of programs, the screenings, the education, to be more effective on that whole front end. Thanks.

MR. KUMIN: Thank you. A couple of questions that deal with sort of operational issues. One question is of the approximately 6,000 employees, of whom it looks like you guys have a little over a quarter, do you have a sense of the overall percentage that are Alaska Native, and could you talk about the trend? I assume that's been going up, and how does it look?

MR. KASHEVAROFF: Okay. Well, it's a good thing I bring Paul along, because he knows everything pretty much. 66 percent native hire among those 6,000, give or take, folks. Depending on where you're located, if you're in Anchorage I think right at 44 percent, but if you're out in a village or regional area that has a lot more Natives, your percent raises a lot higher as your work force is there for you. The trend locally here, we have been I guess pushing or, not pushing, we have been looking at ways that we can increase not only Native hire, but increase Native professionals, and we provide scholarships for folks, we're looking at ways that we can help our -- the natives that we have working for us right now attain a higher professional level through different programs, and go to night school, things like that, we've been helping folks out at, so locally here we have been putting effort into it.

And I know in different regions they have also been putting effort into it. Where they have local training, some folks, you know, work with the university to have classes there in their own regions, so the folks don't have to leave home to get the schooling they need to be come better educated and be a better work force. So the trend is that we're trying to increase our level of education, our level of professionalism, and also increase the Native hire throughout the system.

MR. KUMIN: Speaking of hire, ANTHC has grown to become one of the largest engineering organizations in Alaska. The trend nationally has been for more contracting out rather than developing huge in-house capability for lots of reasons. And could you help people understand the rationale behind designing so many projects in-house as opposed to contracting out, and do you have a sense as to what percent of your budget for those issues is used in-house versus contracting out?

MR. SHERRY: I don't know if I could put a finger on the percent. I know that we've got a number of agreements with the private sector here in Anchorage to do part of our work.

You know, the Indian Health Service figured out a long time ago that it made sense to assemble a group of engineers and a system that was focused specifically on developing rural sanitation facilities. And we've agreed with that philosophy that there's an economy of scale, a sharing of knowledge across project that we can focus and train, have a group of engineers that are purely focused on this. And we feel that after five years of doing this that our tribes are supportive of continuing that same plan.

You know, we contract a lot of our money for the projects. A lot of it comes right back through this community. I don't think we're going to the point of subbing out all the sanitation or health facilities work. I don't think it's true that nationally in the Indian Health Service program that's been the trend. The Navajo people have the other large sanitation issue, and the Navajo tribe and the Indian Health Service are approaching it the same way we are, even though it's a whole different ball game in the southwest.

From time to time we are urged to do more private contracting. We'll always look at it. We'll do it where it's fiscally reasonable and sensible, and we appreciate the partnerships that we do have with the providers here in Anchorage that help get this all done.

MR. KUMIN: A couple questions here that deal with on-going facility operations and maintenance costs and ways to reduce them. To what extent are your programs subsidized in the sense of facilities and operation maintenance costs? Is there any self-funding, or is it primarily federally? And then the next question is really related. What mechanisms are in place, or are there mechanisms that, if not, could be in place to reduce these costs? In other words, incentives. Normally we all respond to those, and so are there incentives that would help as you work on facility designs and upgrades that would encourage you to lower these costs?

MR. KASHEVAROFF: Well, the funding for the maintenance and I guess improvement of most of the facilities that we build out in Rural Alaska, even our local one, basically the funding comes through our compact, through our self-governance compact, and that's what we're using to build them and also to maintain them. There's a pot of money that comes every year for maintenance and improvement.

When we're building these things, we're always looking for, and that's why we have this core team of engineers, and we're not really subbing everything out, because we have folks that are getting very well experienced on building different water and sewer projects throughout the state, and they're building upon each one that the create. They build upon it and they know something even more. I don't think Paul listed the batch of recommendations (ph) they've gotten for some of the things that they've done out in the villages.

But it is a big concern that when you build a water and sewer project out in a village that it costs money to run, it costs money to maintain. And most of the villages out there, they end up having a water cost or a sewer cost just like we pay in Anchorage. We pay AWWU for use, they do out in the villages, too, and we set up the cities, and the cities start billing folks, and so they do have money that comes from throughout the community to help pay for the on-going cost of those systems.

In Anchorage, we even have gone as far as trying to figure out how to lower our costs. We have a water heating system we just put into the hospital a year or so back where we, you know, taped down into the ground water to help out on our system, and if you noticed the new building that we're putting next to the hospital, we incorporated that right into that water cooling system, too. So we are always trying to find something better and more efficient, and that's kind of our -- one of our mottos over there is let's be innovative, let's do it a lot better, a lot more efficiently. Make money, save money type of deal, where we're saying that we ought to be able to do it better than we did last year, because what we did last year isn't going to solve the problems that we have, so we try to be innovative all the time.

MR. KUMIN: Thank you, Don. You've obviously got a strategy in mind to have varying levels of care available that balance the cost of maintaining that capability in rural, remote communities, versus the transportation costs. This question speaks to that. What is the ANTHC doing to rebuild the self-sufficiency of rural hospitals and reduce these transfers, the referrals to Anchorage? Do you anticipate shifting more capabilities to rural areas as you get more sophisticated clinics and reduce some of those costs?

MR. KASHEVAROFF: Paul.

MR. SHERRY: Thanks. I think all of our rural regional hospitals have strategies to either keep stable or improve their service capacity. I know a lot of them, just like a lot of the non Native small community hospitals are looking at strategies of, for example, incorporating nursing home, or skilled nursing or assisted living services into their mix to provide revenue stability, and provide a different level of service that they can provide there and maybe bring some people back home from Anchorage that they could take care of in the community. I mean, basically it's a challenge to each region to determine how to sustain what it needs, and each region has their own approaches.

What are we doing? I mean, we do maintain a system of intercommunication and strategizing with the administrators and clinicians from all those facilities. We redesigned the package, for example, of specialty clinic services that we export. Our professionals here travel to those communities. We change the mix as appropriate to meet the needs out there.

You know, they all have increasing workloads out there. Even though we talk about an in-migration to Anchorage, there's also basically a growing population in the Bush.

So I think the question is exactly right. I mean, what additional strategies should we pursue, and how can we assist our partnering organizations out there to keep the efficiencies and economies of scale up.

The telemedicine thing is part of that. I mean, we -- for example, it's a tool that supports the professional providers in the Bush. The more support they get out there, the more assistance with housing and CME and all that, it helps sustain people out there, and those are the kind of things that we're interested in supporting.

MR. KUMIN: Thank you, Paul. A couple final questions and we'll wrap up I think what's been a fascinating session. You talked early on about parallel multiple health systems in Alaska. The military system, the normal private system, the system that you guys are so active in. What steps are currently being taken now, and what do you envision in the future to enhance cooperation between each of these systems and maximize the benefit and the potential of each of them?

MR. SHERRY: Well, it's my pleasure every three months to sit down with the colonels who run the military treatment facilities in the state. It makes me feel like a colonel. But we do have some existing partnership agreements that we work with with the other systems. We're part of the Alaska Primary Care Association. I see Marilyn's here. We're part of the Alaska State Hospital and Nursing Home Association. That's where we do our interaction with the private and community hospitals in the state. The federal partnership in general connects us with the Coast Guard, the VA, and we've done a number of initiatives with them to share resources, and to do joint trainings, and, I mean, there's just a lot of things we do in partnership. We have all kinds of contractual agreements with Providence, Alaska Regional and other facilities around the state. We engaged in the annual health summits where these issues kind of get discussed in the Alaska Community Forum. So I think we're engaged and we're committed to try to synthesize what we are responsible for, and the resources we have with the systems of the rest of the state.

What I see is that we don't have much infrastructure to build that coordination on. There is no state health entity like there is in the state Fish and Game Board. Okay. So something to think about.

We're not interested in isolating ourselves from the rest of the systems. We want to -- in fact, we see much more integration between the Native and non Native systems at the community level as Don talked about.

MR. KASHEVAROFF: Lots of opportunities.

MR. KUMIN: Thank you. And a final question that will maybe help us all understand the impact of your system on Alaska. I know you had some numbers up there, so forgive me if this has already been answered, but do you have the total number for the approximate funding of the entire -- if you took every element of the Alaska Native Health System, and added up the total budgets, what would it be? Approximately.

MR. SHERRY: Again, if you don't include construction, we're talking about $600 million.

MR. KASHEVAROFF: It all depends on which way you cut the number.

MR. KUMIN: If you don't include construction, it's 600 million annual operating. If you include construction, over the last few years, what's it been?

MR. SHERRY: 700.

MR. KUMIN: 700 million. Thank you very much. So I think that gives us a pretty good idea of just the impact that this does have on the state. And please join me in thanking our speakers for the..... (Applause)

MR. KUMIN: We do have a token of our appreciation to send along with you. We hope you'll find a place for it on your wall or office. And down here we have for you, Don, and you, Paul.

MR. KASHEVAROFF: Thank you, very much.

MR. KUMIN: Thanks, again. We hope that each of you will spend a few minutes talking with your fellow Commonwealth North leaders. If you're a guest joining us today, we hope you'll consider becoming a member of Commonwealth North. We have information available on doing that by the door. And we also hope that you'll be available and interested in joining us as we move forward on both this study and our own internal look. Participation in encouraged. I can tell you personally it's one of the most rewarding parts of being in this organization. So thank you all for coming, and if there's no further business, we'll stand adjourned. Thank you.

(END OF PROCEEDINGS)