Legislature(2007 - 2008)CAPITOL 106
04/24/2007 03:00 PM House HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| HB192 | |
| SJR3 | |
| HB4 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 192 | TELECONFERENCED | |
| + | SJR 3 | TELECONFERENCED | |
| *+ | HB 4 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 4-MEDICAL FACILITY CERTIFICATE OF NEED 4:22:21 PM CHAIR WILSON announced that the final order of business would be HOUSE BILL NO. 4, "An Act amending the certificate of need requirements to apply only to health care facilities that are nursing homes or residential psychiatric treatment centers or that are located in a borough with a population of not more than 25,000, in the unorganized borough, or in a community with a critical access hospital." [Contains discussion of SB 65.] REPRESENTATIVE BOB LYNN, Alaska State Legislature, sponsor, informed the committee that HB 4 has three major purposes: to increase the availability of medical care and the choice of providers; to create lower costs for patients and for worker's compensation; and to employ the principle of free enterprise. Representative Lynn informed the committee that, in America the free market, not the state, should decide whether any business, including a health care business, is needed. He expressed his belief that free enterprise motivates excellence, lowers prices and benefits consumers. The current policy of requiring a Medical Facilities Certificate of Need (CON) creates a system of de facto medical monopoly. Patients deserve more choices and the deliverance of Alaskans from a medical monopoly should help lower medical costs. Spokespersons supporting the CON policy will explain that health care facilities are a special case; however, experts with a different opinion will be testifying today. He concluded by saying that those who believe that competition can lower cost should support this bill. Representative Lynn introduced expert witnesses and his aide. MIKE SICA, staff to Representative Bob Lynn, Alaska State Legislature, stated that Representative Lynn's office has received two hundred letters of support for the bill and one letter of dissent. 4:27:43 PM CHAIR WILSON opened public testimony. 4:28:14 PM ROBERT JAMES CIMASI, President, Health Capital Consultants, expressed his concern about the impact of the CON regulation on Alaska, based on the fact that it is failed health policy. He explained that the CON policy was imposed on Alaska by the federal government in the 1970s when health care was paid for on a cost-plus basis. The advent of the "prospective payment system" in the 1980s has eliminated the reason for CON regulation to exist. The Federal Trade Commission (FTC) has denounced the continuance of CON regulation, most recently after a year-long study. He asked the committee to refer to his written testimony for the complete citing of the FTC report and data. Mr. Cimasi stressed that CON policy diverts desperately needed health care dollars away from the provision of patient care. Most problematic is that it has been known for years that the arguments of the proponents of CON regulation are easily refutable. He opined that the impact of CON regulation on Alaska is especially damaging because Alaska is severely underserved by physicians; CON regulation is anti-physician and by restricting the sharing of ancillary services revenue it will be impossible for Alaska physicians to continue to serve patients. Mr. Cimasi strongly urged the committee to consider the bill. 4:33:44 PM LARRY STINSON, Physician, Advanced Medical Centers of Alaska, agreed with the previous witness that CONs are no longer needed and create monopolies. He pointed out that the main hospitals in Alaska also maintain health care facilities in states that do not have CON regulations; thus their arguments that CON regulations are needed seems to be incongruous. Dr. Stinson also noted that there is no data to support the necessity of CON regulations, although the gathering of this data has been mandated by state law for 20 years. He concluded that CON regulation maintains monopolistic practices, interferes with health care, reduces choice, reduces consumer options, and interferes with the recruitment of physicians to the state. 4:36:35 PM GREGORY POLSON, Physician, Advanced Medical Centers of Alaska, stated his support for HB 4 and agreed with the previous witnesses. Furthermore, he added his belief that the current system is dysfunctional. He relayed his experience working with physicians in trying to provide additional health care treatment centers. These efforts, in Anchorage and Fairbanks, are mired in legal difficulties between the state and Providence Alaska Medical Center over CON regulations. 4:37:33 PM JEREMY HAYS, Representative, Alaska Medical Development and Advanced Medical Centers of Alaska, stated his support for HB 4, and the repeal of Alaska's CON laws. Mr. Hays informed the committee that Alaska has overall health care costs that are 40 percent higher than the national average, and costs continue to rise. He noted that Alaska also has the most restrictive CON laws, thus negating the argument that CON laws keep costs down. He called for CON proponents to explain this "oxymoron." In fact, when a health care provider can offer a higher quality service at a lower price to the residents of Alaska, it should be free to do so and thereby benefit the consumer. Most importantly, Mr. Hays said that Alaskans deserve to choose where medical services should be performed, by whom, and for what price. He concluded by saying that HB 4, and similar legislation, has died in the House Health, Education and Social Services Standing Committee in past years; this committee bears the responsibility to move this bill. 4:41:25 PM NORMAN STEPHENS, Chief Executive Officer, Mat-Su Regional Medical Center, expressed his concern that this is a complicated issue that may be decided with little opportunity for study. He informed the committee that health care economics falls under a state and federally controlled reimbursement system and he recommended that the committee delay action until the governor's task force has completed a balanced study of this subject. Mr. Stephens warned that the repeal of the CON law will double and triple costs depending on how many providers enter the market. He stated that the hospital is not concerned with competition; however, in a state with a small population, expansion should be regulated. 4:43:53 PM JEFF KINION, Chief Executive Officer, Alaska Open Imaging Center, informed the committee that the CON process and program in Alaska is substantially broken. State regulations are now in a quagmire of confusion leading to multiple lawsuits between hospitals, surgery centers, imaging centers, and other health care providers. He opined that money that should be directed on patient care and new technology is spent on the court system and interpreting the regulations. Furthermore, the state is not following its own rules or provided the data that was mandated years ago. He urged the committee to focus on who will benefit and who will lose in this process. Mr. Kinion expressed his belief that the defense that hospitals have to have a CON to cover costs is absurd business practice. 4:45:50 PM JIM JORDAN, Executive Director, Alaska State Medical Association, stated his organization's support for HB 4 and asked the committee to refer to his previously submitted written testimony. 4:46:20 PM KIM BLACK, employee, Alaska Open Imaging Center, said that she has traveled throughout the state and many physicians are frustrated with the current CON process. As a lifelong Alaskan, she expressed her concern that the administration of CON regulations puts Alaskans at a disadvantage and increases the cost of health care. She opined that the people of Fairbanks have limited access to available services at the hospital and to imaging services. For example, Fairbanks Memorial Hospital will not accept imaging orders from chiropractors; patients are required to have an order from a physician which adds additional cost. Ms. Black said that she supports HB 4. 4:50:04 PM ROB GOULD, Chief Financial Officer and Head of Operations, Fairbanks Memorial Hospital, stated his opposition to HB 4, and provided an example of the situation that occurred when the magnetic resonance imaging (MRI) centers came to the Fairbanks area. He relayed that the cost at the MRI centers for three of the top procedures is much higher than the cost at the hospital. His organization believes that it has been proven in other states that competition in health care does not decrease health care costs. For-profit and nonprofit providers have to recoup capital costs; the high cost of medical care in Alaska is not because of the lack of competition, but because of the size of the population and the difficulty and cost of transportation. He explained that Medicare regulations do not allow MRIs to be ordered by chiropractors; thus it is not Fairbanks Memorial Hospital that denies MRI's to Medicare patients. 4:53:36 PM BOB CARLSON, Fairbanks, Alaska, said that he was testifying as a private citizen and stated that future highly technical medical care will require a high capital investment by robust competition among for-profit, nonprofit and government organizations. He opined that the CON program does not foster competition; in fact, Mr. Carlson said that he assumes Fairbanks Memorial Hospital and the Greater Fairbanks Community Hospital Foundation are affiliated with Banner Health which claims six percent profits on revenue per year and a total asset value of $3.7 billion. Mr. Carlson observed that Banner Health and its affiliates do not need the advantages of the CON regulations to continue operations. 4:55:44 PM CAM CARLSON stated that she was testifying as a private citizen and as a user of health care and medical services in the Fairbanks area. She opined that Fairbanks Memorial Hospital is a bully in the medical community. She expressed her belief that the CON regulations prevent citizens from choices of medical services and contribute to high costs. She strongly urged the committee to move HB 4 out of committee. 4:57:36 PM RYAN SMITH, Chief Executive Officer, Central Peninsula General Hospital (CPGH), informed the committee that CPGH is represented by the Alaska State Hospital and Nursing Home Association (ASHNHA) and supports its policy statement on the bill. CPGH is the sole community provider on the central Kenai Peninsula; it is a 50 bed acute care hospital and also operates a 60 bed skilled nursing facility. Mr. Smith relayed that, in 2003, the citizens in CPGH's service area approved a bond project for capital improvements. The elimination of CON regulations will allow providers to take revenue from the hospital's high margin services and will jeopardize the services the hospital provides in Soldotna. This added risk to the financial stability of the hospital could harm the recent bond project that is for the benefit all the constituents in the Soldotna service area. 4:59:18 PM MIKE MADDOX, Manager, Alaska Open Imaging, stated that patients in Fairbanks must wait 10 to 13 days to receive a routine MRI scan. He gave an example of the delays that result from the backlog of procedures and analysis and stated that these delays lead to poor health care for citizens. Mr. Maddox pointed out that Fairbanks Memorial Hospital and Alaska Open Imaging process their bills differently; this accounts for the perceived difference in cost. He then expressed his passionate support for HB 4. 5:01:40 PM CHAIR WILSON informed the committee that Senator Davis will hold companion bill [SB 65] in the Senate. She stated that the House Health, Education and Social Services Standing Committee and the Senate Health, Education and Social Services Standing Committee will be working jointly on these bills during interim. 5:03:13 PM [HB 4 was held over.]
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