Legislature(2005 - 2006)HOUSE FINANCE 519

04/26/2005 01:30 PM FINANCE

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* first hearing in first committee of referral
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Heard & Held
Heard & Held
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSHB 275(FIN) Out of Committee
CS FOR SENATE BILL NO. 67(JUD)(efd fld)                                                                                       
     An Act relating to claims for personal injury or                                                                           
     wrongful death against health care providers.                                                                              
BRIAN HOVE,  STAFF, SENATOR  RALPH SEEKINS,  said that  SB 67                                                                   
would amend  AS 09.55 by  adding a new  section (.549).   The                                                                   
section would  place a two-step limit on  non-economic damage                                                                   
awards  where  health care  providers  render  services.   In                                                                   
cases involving  wrongful death or severe  permanent physical                                                                   
impairment,  damages  would  be   limited  to  $400  thousand                                                                   
dollars,  while all  other  cases would  be  limited to  $250                                                                   
thousand dollars.                                                                                                               
The bill intends to alleviate  a growing, two-pronged, crisis                                                                   
in Alaska's  health care  industry, the  dearth of  liability                                                                   
insurance  carriers and  the declining  number of  practicing                                                                   
physicians.  Liability  insurance is necessary.   Health care                                                                   
providers understand the necessity of liability coverage.                                                                       
Mr. Hove stated that in today's  world, commercial enterprise                                                                   
must have coverage.  Medical malpractice  insurance companies                                                                   
have  found Alaska  uneconomic  and  have left  that  market,                                                                   
which has created  uncertainty and opened the  door to higher                                                                   
rates across the board.                                                                                                         
Mr. Hove  noted every Alaskan  needing medical care  pays the                                                                   
added  costs  of  doing business,  however,  there  are  more                                                                   
serious  concerns with  a  critical shortage  of  physicians.                                                                   
Alaska ranks near the bottom in  the number of physicians per                                                                   
capita nationwide  and that over half of  Alaska's physicians                                                                   
exceed the age  of 50.  Additionally, it is  continually more                                                                   
difficult  to  recruit new  entries  when other  states  have                                                                   
capped  non-economic   damages  at  or  near   $250  thousand                                                                   
dollars.  It is  important to note that SB 67  does not alter                                                                   
awards  for  quantifiable  damages  such as  lost  wages  and                                                                   
medical expenses.   Furthermore, it  is not intended to  be a                                                                   
solution  to the  entire range  of issues  facing the  health                                                                   
care industry today.  However,  it does provide a step in the                                                                   
right  direction   in  terms   of  stabilizing   the  medical                                                                   
insurance market  in Alaska and  boosting efforts  to attract                                                                   
the next generation of physicians.                                                                                              
4:39:59 PM                                                                                                                    
JIM  JORDAN,   EXECUTIVE  DIRECTOR,   ALASKA  STATE   MEDICAL                                                                   
ASSOCIATION (ASMA),  ANCHORAGE, testified  in support  of the                                                                   
legislation.     He  mentioned   the  national  shortage   of                                                                   
physicians.   The  Association of  American Medical  Colleges                                                                   
has  issued an  alert that  it  is time  to ramp  up for  the                                                                   
medical  shortage.    He  emphasized  that  the  shortage  is                                                                   
particularly acute in the Western states.                                                                                       
Mr. Jordan maintained that the  State of Alaska cannot afford                                                                   
the  loss of  another  physician.   There  are  a variety  of                                                                   
reasons that physicians  are being lost.  He felt  that SB 67                                                                   
could aid in recruitment of new  doctors.  Mr. Jordan pointed                                                                   
out that two  of the four insurance companies  that have left                                                                   
the State are still doing business  in Idaho.  Alaska exceeds                                                                   
Idaho's [medical  insurance] rates by  50 percent.   He urged                                                                   
support for SB 67.                                                                                                              
4:47:57 PM                                                                                                                    
Representative  Foster referenced the  materials in  the file                                                                   
which  indicates  that  the  number  of  doctors  across  the                                                                   
country have tripled since 1989.                                                                                                
4:51:20 PM                                                                                                                    
Mr.  Jordan questioned  which  report was  being  referenced.                                                                   
Representative Foster restated  that the report indicates the                                                                   
tripling per  capita.   Mr.  Jordan advised that  the numbers                                                                   
being discussed  are the total number of  physicians licensed                                                                   
in the  State.  It  is important  to take into  consideration                                                                   
how  many doctors  are  actually  practicing.   The  national                                                                   
organization of  State Medical  Boards indicates that  60% of                                                                   
physicians have  licenses in multiple states.   The directory                                                                   
is  the  best   attempt  to  determine  who   the  practicing                                                                   
physicians are.                                                                                                                 
4:53:39 PM                                                                                                                    
Representative  Weyhrauch   questioned  if  37   doctors  had                                                                   
dropped  out of practice  last  year.  Mr.  Jordan said  yes,                                                                   
primarily due to the number of deployed military positions.                                                                     
Representative   Weyhrauch  asked   if  they  had   purchased                                                                   
malpractice insurance.  Mr. Jordan  believed that the retired                                                                   
military had been covered under the federal torte act.                                                                          
4:56:05 PM                                                                                                                    
MIKE  HAUGEN,  EXECUTIVE  DIRECTOR,   ALASKA  PHYSICIANS  AND                                                                   
SURGEONS,   ANCHORAGE,   testified    in   support   of   the                                                                   
legislation.  Approximately, 60%  of the Alaskan voters favor                                                                   
placing  a  cap  on  non-economic  damages  in  medical  non-                                                                   
practice  cases.   He added that  72% of  the voters  believe                                                                   
that health  care providers are  doing a good  job preventing                                                                   
medical errors and  promoting public safety.   Nearly half of                                                                   
the voters feel  that some physicians have  stopped providing                                                                   
some  complex  or  high-risk   medical  services  to  protect                                                                   
themselves from the  lawsuits.  Voters fear  that the medical                                                                   
non-practice component will impact them directly.                                                                               
Mr.  Haugen pointed  out  that  Alaska ranks  46   out of  50                                                                   
states in  the number  of per capita  doctors.  Those  states                                                                   
that have enacted  meaningful, non-economic damage  caps have                                                                   
seen an average of about 12% more doctors per capita.                                                                           
Mr. Haugen  argued that the concern  is one of access.   With                                                                   
only two insurance carriers left  in the State, Alaska cannot                                                                   
afford  to  loose one  of  them.   There  are  enough  senior                                                                   
doctors in  the State deciding  to retire from practice.   It                                                                   
is  very difficult  to attract  new doctors  into Alaska  and                                                                   
with just  two carriers, it will  not be getting  any easier.                                                                   
He stated that SB 67 would help address these concerns.                                                                         
4:59:16 PM                                                                                                                    
Representative Holm asked if it  was in the best interest for                                                                   
Alaskans to have young or old  doctors.  Mr. Haugen responded                                                                   
that would depend  on the qualifications and  ability of that                                                                   
physician.   The  doctors coming  out of  medical school  are                                                                   
exposed to the  most current technology and  theory while the                                                                   
older physicians  have experience.   The fact is  that Alaska                                                                   
needs to attract more doctors of all ages.                                                                                      
Representative  Holm   pointed  out  that  it   is  extremely                                                                   
difficult  to  attract  specialists  in Fairbanks.    He  was                                                                   
concerned  that  the  legislation might  attract  only  young                                                                   
Representative  Holm   referenced  an  article   regarding  a                                                                   
liability  insurance analysis  undertaken by  a group,  which                                                                   
ranks Alaska between  33%-36% nationwide.  Alaska  ranks very                                                                   
low for doing  business and recommended that  torte reform be                                                                   
5:02:58 PM                                                                                                                    
Mr. Haugen  explained that the  proposed legislation  was not                                                                   
the  ultimate  solution to  the  problem.   He  thought  that                                                                   
eventually, the Legislature could create a better fix to the                                                                    
5:04:59 PM                                                                                                                    
Representative Holm advised that there is no guarantee from                                                                     
any insurance company that they will stay in Alaska either                                                                      
with or without passage of the legislation.                                                                                     
CS SB 67(JUD)(efd fld) was HELD in Committee for further                                                                        

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