Legislature(2005 - 2006)HOUSE FINANCE 519

04/27/2005 08:30 AM FINANCE

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08:46:21 AM Start
09:57:30 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Continuation of 4/26 1:30 pm meeting,
Heard & Held
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 27, 2005                                                                                           
                         8:46 A.M.                                                                                              
CALL TO ORDER                                                                                                                 
Co-Chair Meyer called the House  Finance Committee meeting to                                                                   
order at 8:46:21 AM.                                                                                                          
MEMBERS PRESENT                                                                                                               
Representative Mike Chenault, Co-Chair                                                                                          
Representative Kevin Meyer, Co-Chair                                                                                            
Representative Eric Croft                                                                                                       
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Jim Holm                                                                                                         
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Carl Moses                                                                                                       
Representative Bruce Weyhrauch                                                                                                  
MEMBERS ABSENT                                                                                                                
Representative Bill Stoltze, Vice-Chair                                                                                         
ALSO PRESENT                                                                                                                  
Rod Betit, President, Alaska State  Hospital and Nursing Home                                                                   
Association, Anchorage;  Pat Luby, Advocacy  Director, Alaska                                                                   
Association of Retired Persons (AARP)                                                                                           
PRESENT VIA TELECONFERENCE                                                                                                    
Ken Brewer,  Fairbanks; John  Bringhurst, Petersburg  Medical                                                                   
Center,  Petersburg;   Kathy  Dale,  Anchorage;   Ray  Brown,                                                                   
Attorney,  AATL,  Anchorage; Roland  Gower,  Surgeon,  Alaska                                                                   
Physician  & Surgeons, Alaska  Regional Hospital,  Anchorage;                                                                   
Robert  Sparks, Fairbanks;  Tom  O'Brien, Fairbanks;  Valerie                                                                   
Nelson,   Former   Mayor/Assembly   Member,   Sitka;   Terrie                                                                   
Gottstein, Anchorage                                                                                                            
CS SB 67(JUD)(efd fld)                                                                                                          
     An Act relating to claims for personal injury or                                                                           
     wrongful death against health care providers.                                                                              
     SB 67 was HEARD and HELD in Committee for further                                                                          
8:48:06 AM                                                                                                                    
CS FOR SENATE BILL NO. 67(JUD)(efd fld)                                                                                       
     An Act relating to claims for personal injury or                                                                           
     wrongful death against health care providers.                                                                              
KENNETH  BREWER, (TESTIFIED  VIA TELECONFERENCE),  FAIRBANKS,                                                                   
agreed that  Alaska needs more  good doctors and  recommended                                                                   
better  insurance rates  for doctors  and all  Alaskans.   He                                                                   
believed  that   the  legislation  was  an   "over-reaction".                                                                   
Alaska does not have the population  base to support too many                                                                   
insurance companies.  He urged  that the $250 thousand dollar                                                                   
insurance cap not be implemented.   He mentioned his personal                                                                   
experience  with a  mis-diagnosis  dealing  with a  Fairbanks                                                                   
doctor  when his wife  had lung  cancer.   He questioned  why                                                                   
unqualified  physicians  are   allowed  to  accept  emergency                                                                   
patients.    Placing a  cap would not  be the correct  option                                                                   
and that it should not be allowed.                                                                                              
8:57:46 AM                                                                                                                    
DR. ROLAND  GOWER, (TESTIFIED  VIA TELECONFERENCE),  SURGEON,                                                                   
ALASKA  PHYSICIAN  &  SURGEONS,   ALASKA  REGIONAL  HOSPITAL,                                                                   
ANCHORAGE,  addressed concerns  regarding insurance  premiums                                                                   
existing throughout  Alaska.  He acknowledged  that Alaska is                                                                   
in a  crisis mode  and mentioned  that physician's  insurance                                                                   
premiums have doubled  over the past three years.   Normally,                                                                   
those costs  are passed on to  the patients, which  drives up                                                                   
the costs of medical insurance.                                                                                                 
Dr.   Gower   pointed   out   statewide   concern   regarding                                                                   
availability of medical  care in Alaska and  will become more                                                                   
of an issue if the malpractice component is not addressed.                                                                      
9:01:06 AM                                                                                                                    
Dr.  Gower  disagreed with  legislative  research  indicating                                                                   
there is  not a statewide shortage  of doctors.   At present,                                                                   
doctors going on vacation must  hire someone to come from out                                                                   
of state during  that time.  He added concern  that over half                                                                   
of the  State's practicing physicians  are now over  50 years                                                                   
old and with  the difficulty of insurance and  premiums, some                                                                   
of  those  physicians  will consider  retirement.    Limiting                                                                   
risks include "going bare" and  could mean no longer treating                                                                   
breast cancer.  He said he personally  treats over 100 breast                                                                   
cancer cases  a year and  that some risks  will no  longer be                                                                   
Dr. Gower stressed  that consideration of the  legislation is                                                                   
a crisis choice.                                                                                                                
9:06:24 AM                                                                                                                    
JOHN    BRINGHURST,    (TESTIFIED     VIA    TELECONFERENCE),                                                                   
ADMINISTRATOR,   PETERSBURG   MEDICAL   CENTER,   PETERSBURG,                                                                   
commented on  his history in  the medical care  reform system                                                                   
movement.  He highlighted concerns occurring in Alaska:                                                                         
   ·    Shortage of physicians                                                                                                  
   ·    Loss of services                                                                                                        
   ·    Unavailability of coverage                                                                                              
Mr. Bringhurst  pointed out  that the  need for torte  reform                                                                   
has reached a crisis  phase across the nation.   He urged the                                                                   
Legislature to consider those needs.                                                                                            
9:09:32 AM                                                                                                                    
KATHY DALE, (TESTIFIED VIA TELECONFERENCE),  SELF, ANCHORAGE,                                                                   
noted that  she and her  family were victims  of malpractice.                                                                   
She pointed  out it is  difficult to  bring a case  against a                                                                   
medical professional.   The bill limits the  victim's ability                                                                   
to sue  medical professionals when  they are negligent.   She                                                                   
noted  economic damages  resulting  for those  families.   In                                                                   
Alaska, there are already existing  caps.  She stated that if                                                                   
the  proposed  cap  of  $250  thousand  dollars  is  adopted,                                                                   
citizens of Alaska  would be robbed of "their  day in court".                                                                   
The $250 thousand dollar cap is  not satisfactory.  She urged                                                                   
that the bill not be moved forward.                                                                                             
Ms.  Dale pointed  out that  the increased  costs in  medical                                                                   
premiums  over the  past  few years,  has  resulted from  the                                                                   
stock  market  crash.    The market  is  recovering  but  the                                                                   
premiums  have not  yet  been reduced.    She said  insurance                                                                   
companies  were pocketing  the extra money.   California  and                                                                   
Texas both have  the $250 thousand dollar cap.   California's                                                                   
cap  was established  in 1976  and the  overall medical  mal-                                                                   
practice premiums there have decreased  drastically following                                                                   
the adoption of  that cap; however, rates were  not regulated                                                                   
until  1988 through  the adoption  of Proposition  #103.   An                                                                   
insurance  crisis   resulted  from  the  move   happening  in                                                                   
California in 1976.   A similar  situation resulted in Texas.                                                                   
Ms.  Dale pointed  out  that only  patients  with large  wage                                                                   
losses  or huge  medical  bills are  typically  able to  find                                                                   
attorneys in  California.  She  urged that the  House Finance                                                                   
Committee not to pass the bill out of Committee.                                                                                
9:15:19 AM                                                                                                                    
RAY   BROWN,  (TESTIFIED   VIA   TELECONFERENCE),   ATTORNEY,                                                                   
ANCHORAGE, noted  that he  is one of  the few attorneys  that                                                                   
actually litigates these type  of cases.  He pointed out that                                                                   
his  firm screens  approximately 200  allegations of  medical                                                                   
malpractice a year.   Of those cases, the firm  takes between                                                                   
5-7  cases  following  a rigorous  and  exhausting  screening                                                                   
routine.   These claims are not  filed furiously; it  is very                                                                   
expensive to get a case to trial.                                                                                               
Mr. Brown questioned why the premiums  are so high if medical                                                                   
malpractice cases  are not occurring.   He stressed  the need                                                                   
for insurance  revision.  He maintained the  legislation does                                                                   
nothing  to solve  medical  malpractice  issues.   Mr.  Brown                                                                   
asked why California  rates are not lower than  Alaska's.  He                                                                   
maintained  the legislation will  negatively affect  everyone                                                                   
and  that  it  eliminates  children   from  bringing  forward                                                                   
claims.  SB 67 would immunized grossly negligent doctors.                                                                       
Mr. Brown  pointed out  that a 70%  disability would  have no                                                                   
effect bringing  claims onto the  individual physicians.   It                                                                   
would increase the  litigation costs in all cases.   It would                                                                   
also  provide  additional  defense  against  women,  rendered                                                                   
sexually  dysfunctional after  malpractice suits.   It  would                                                                   
not protect children disfigured  from burns and facial scars.                                                                   
Mr. Brown urged  reconsideration of the bill.  The  bill is a                                                                   
public  policy issue  affecting  the most  vulnerable of  our                                                                   
9:23:21 AM                                                                                                                    
ROBERT  SPARKS, (TESTIFIED  VIA  TELECONFERENCE),  FAIRBANKS,                                                                   
summarized that there is a malpractice  crisis statewide, not                                                                   
a  lawsuit practice.    He commented  on  injured victims  of                                                                   
malpractice.    He  worried  that   the  important  objective                                                                   
evidence  was not being  considered.   Hospitals and  doctors                                                                   
need  to have  systems in  place  to work  to reduce  medical                                                                   
errors.   In the current system,  people injured are  able to                                                                   
recover  damages  from the  person  that  injured them.    He                                                                   
warned about not being able to hold doctors accountable.                                                                        
Mr. Sparks  pointed out  that some  of the worst  malpractice                                                                   
occurrences are witnessed within  the Veterans Administration                                                                   
(VA) system.                                                                                                                    
Mr. Sparks stressed that statistics  have been over-blown and                                                                   
that  the  facts   provided  by  the  medical   industry  are                                                                   
questionable.  He addressed insurance  premiums and the torte                                                                   
reform system,  summarizing that  the legislation  would make                                                                   
Alaskans vulnerable to insurance companies.                                                                                     
9:28:24 AM                                                                                                                    
TOM  O'BRIEN,  (TESTIFIED  VIA   TELECONFERENCE),  FAIRBANKS,                                                                   
spoke  in  opposition  to  the  legislation.    He  shared  a                                                                   
personal  perspective of  concerns  having been  a victim  of                                                                   
malpractice, himself.   As a victim, many people  must live a                                                                   
more alternative  lifestyle.   It will be  only those  in the                                                                   
higher  income   brackets  that  will  be  able   to  receive                                                                   
representation  in  the  future,  if  the bill  passes.    He                                                                   
mentioned the need  to be able to demonstrate  high earnings.                                                                   
If a victim were hit with medical  negligence, they might not                                                                   
be able  to demonstrate  economic stability.   He  emphasized                                                                   
that  it  is  very difficult  to  gain  representation  by  a                                                                   
qualified  malpractice attorney.   Those  attorney's must  be                                                                   
thorough.  With passage of the  legislation, the victim would                                                                   
not have any opportunity to have "their day in court".                                                                          
He believed  that the  current system is  "good and  the caps                                                                   
are adequate".  He urged that  members question the rights of                                                                   
the  victim.   Mr. O'Brien  maintained  that the  legislation                                                                   
will create a huge burden for all victims.                                                                                      
9:32:19 AM                                                                                                                    
VALERIE  NELSON,  (TESTIFIED  VIA  TELECONFERENCE),  ASSEMBLY                                                                   
MEMBER,  FORMER  MAYOR,  SITKA, outlined  her  concerns  with                                                                   
passage of SB 67.  She explained  that she is a breast cancer                                                                   
survivor,  interjecting that  damages due  to negligence  are                                                                   
humiliating for the  patient.  She pointed out  that not only                                                                   
doctors  are faced with  increased insurance  costs and  that                                                                   
the  charges   are  being  raised   for  everyone   in  every                                                                   
9:35:03 AM                                                                                                                    
TERRIE GOTTSTEIN, (TESTIFIED VIA  TELECONFERENCE), ANCHORAGE,                                                                   
urged that  members vote  against SB 67.   She was  disturbed                                                                   
that  the  insurance   companies  are  the   guilty  parties.                                                                   
Malpractice  insurance rates  should be  more focused  on the                                                                   
insurance  industry.   She mentioned  doctors with good  risk                                                                   
records.  To reduce medical malpractice  insurance rates, the                                                                   
Legislature  should  mandate  that  the  medical  malpractice                                                                   
insurers "experience-rate"  all doctors.   She believed  that                                                                   
action could provide incentives for careful care.                                                                               
Ms. Gottstein  elaborated that  she opposed  the bill,  as it                                                                   
would  limit  an injured  person  from  having their  day  in                                                                   
court.    She   recommended  that  cases  of   negligence  be                                                                   
exempted.   The  standard of  negligence should  be high  and                                                                   
should be punished.                                                                                                             
9:38:43 AM                                                                                                                    
PAT LUBY,  ADVOCACY DIRECTOR,  ALASKA ASSOCIATION  OF RETIRED                                                                   
PERSONS (AARP),  JUNEAU, acknowledged  that mistakes  happen.                                                                   
He  stated that  the issue  of medical  malpractice is  often                                                                   
perceived  as a battle  between trial  lawyers and  insurance                                                                   
companies  and  physicians.   AARP  thinks  that it  is  also                                                                   
important to  consider the victim  of malpractice as  well as                                                                   
the ultimate goal of medical error  reduction.  AARP believes                                                                   
that State Legislature should  not place limits on the amount                                                                   
of damages or on joint and severe  liability, or unreasonable                                                                   
limits on  damage awards  for pain and  suffering.  A  cap of                                                                   
$250 thousand dollars is unreasonable.                                                                                          
Reducing  medical  errors is  in  the  best interest  of  all                                                                   
Alaskans and  is the real intent  of SB 67.   AARP encourages                                                                   
the House Finance Committee to  amend the bill to reflect the                                                                   
recommendations  of  the  Institute   of  Medicine  for  fair                                                                   
compensation and error reduction.                                                                                               
9:41:28 AM                                                                                                                    
ROD BETIT, PRESIDENT, ALASKA STATE  HOSPITAL AND NURSING HOME                                                                   
ASSOCIATION, ANCHORAGE, provided  an overview of his handout:                                                                   
"Testimony by  the Alaska Medical Injury  Compensation Reform                                                                   
Act of 2005".  (Copy on File).                                                                                                  
Mr.  Betit  addressed  concerns  for an  adequate  number  of                                                                   
doctors within  the State.   He stated that ASHNHA's  members                                                                   
strongly support SB 67.  Passage  of the bill is important to                                                                   
protecting Alaskan's  access to  needed physician care.   The                                                                   
bill changes only  one aspect of the medical  liability laws,                                                                   
the area  dealing with  non-economic damages.   Alaska  has a                                                                   
per  capita  shortage   of  physicians  right   now  and  the                                                                   
situation is  expected to get  worse.  The situation  is even                                                                   
more serious in rural areas of the State.                                                                                       
Mr.  Betit  continued,  the population  forecast  for  Alaska                                                                   
versus expected  growth in physicians adds even  more concern                                                                   
to the picture.  He observed population growth facts:                                                                           
   ·    The total population of Alaska is projected to grow                                                                     
        28% by  2020,  which is  in  addition  to 62%  growth                                                                   
        between 1980 and 2000.                                                                                                  
   ·    The population over 65 is projected to grow 109% by                                                                     
        2020.  That is in  addition to a 229% growth  in that                                                                   
        age group between 1980 and 2000.                                                                                        
   ·    In 1998, Alaska ranked 47 in the number of hospital                                                                     
        beds per 100,000 population and 49   in the number of                                                                   
        nursing home  beds  for people  65  and  older.   Yet                                                                   
        Alaska will be experiencing the  greatest growth rate                                                                   
        in the age group  that most requires services  in the                                                                   
        complex environments  dependent  on a  wide range  of                                                                   
        physician specialists.                                                                                                  
9:48:13 AM                                                                                                                    
Mr. Betit referenced Page 3 -  Other Aspects to the Physician                                                                   
   ·    Limiting Practice; and                                                                                                  
   ·    Use of "locum tenens".                                                                                                  
Mr. Betit concluded,  Alaska is already  experiencing serious                                                                   
trouble  retaining   and  attracting   physicians,   and  the                                                                   
situation  will   get  worse  without  intervention   by  the                                                                   
Legislature to  help stabilize the medical  liability market.                                                                   
Growth  in  Alaska's population,  particularly  the  elderly,                                                                   
will  far  outstrip  growth  in   the  number  of  physicians                                                                   
available to meet that need.                                                                                                    
9:49:58 AM                                                                                                                    
Representative  Holm asked if  providing proper  medical care                                                                   
in Alaska  resulted from a  lack of qualified  physicians and                                                                   
how SB 67 would attract those  physicians.  Mr. Betit did not                                                                   
know.  He pointed  out that Alaska does not have  a lot going                                                                   
on to  attract doctors.   There  are no  medical schools  and                                                                   
only has a  small residency program.  Prospective  doctors do                                                                   
make malpractice considerations.                                                                                                
Mr.  Betit pointed  out that  Alaska  has made  an effort  to                                                                   
increase  graduating  nurses.   He  believed  that the  nurse                                                                   
situation will be improving.                                                                                                    
9:53:13 AM                                                                                                                    
Representative  Holm maintained that  there should be  a more                                                                   
definitive answer  regarding how  many more doctors  would be                                                                   
drawn to  Alaska with passage of  the bill.  He  thought that                                                                   
it  would  minimize the  option  for  injured people  to  get                                                                   
adequate compensation.  Mr. Betit  disagreed, suggesting that                                                                   
the bill would attract more doctors to the State.                                                                               
9:54:08 AM                                                                                                                    
Representative  Croft asked if  insurance would  increase for                                                                   
doctors based on  the claim-expense.  Mr. Betit  did not know                                                                   
the insurance rating system.   Representative Croft requested                                                                   
more information on that.                                                                                                       
Representative  Croft asked how  the figure of  $250 thousand                                                                   
dollars  had been  determined,  to make  Alaska  competitive.                                                                   
Mr.  Betit explained  that  the attempt  was  to determine  a                                                                   
balance and that $250 thousand  dollars is the amount used by                                                                   
some other states.                                                                                                              
Representative  Croft  asked  if  it should  be  indexed  for                                                                   
inflation or  if it would also  be the correct number  in 20-                                                                   
years.   Mr. Betit responded that  it should not  be indexed;                                                                   
however,  could be  something  the Legislature  considers  as                                                                   
9:56:07 AM                                                                                                                    
Representative Croft requested more follow-up information.                                                                      
9:56:58 AM                                                                                                                    
Co-Chair Meyer noted that the bill would come back before                                                                       
the Committee at the afternoon meeting.  He requested that                                                                      
Senator Seekins, Sponsor, be present.                                                                                           
9:57:30 AM                                                                                                                    
Representative Kelly requested that his amendment be brought                                                                    
forward during the afternoon session with Senator Seekins                                                                       
CS SB 67(JUD)(efd fld) was HELD in Committee for further                                                                        
The meeting was adjourned at 9:58 A.M.                                                                                          

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