Legislature(2007 - 2008)BUTROVICH 205
03/12/2008 05:00 PM Senate HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| SCR14 | |
| SB300 | |
| SB245 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | SB 300 | ||
| += | SB 245 | TELECONFERENCED | |
| *+ | SCR 14 | TELECONFERENCED | |
SB 245-HEALTH CARE: PLAN/COMMISSION/FACILITIES
6:09:50 PM
CHAIR DAVIS announced the consideration of SB 245 and asked for
public testimony.
6:10:19 PM
ROD BETIT, CEO, Alaska State Hospital and Nursing Home
Association (ASHNHA), thanked the Chair for the rewrite and
noted that a summary of his comments was included in the
committee members' packets. He mentioned specifically that
Section 4 added a reference to critical access hospitals, which
were located in Cordova, Dillingham, Ketchikan, Kotzebue, Nome,
Petersburg, Kodiak, Seward, Valdez, Barrow, Sitka and Homer;
that became important with regard to the CON language and which
communities would have special protections because of the size
of the community. Section 5 contained the piece that replaced
the repeal of CON and was extremely important to clarify the
ongoing disputes between hospitals, imaging centers and
physicians about what was and was not subject to CON review when
there was imaging equipment in the facility or office. This
language was worked out subsequent to the negotiated rule-making
committee breaking up and would eliminate about 80 percent of
the appeals and law suits that were before the department. It
provided that, to be outside CON and to get the benefit of the
physician office exemption in statute, the physicians in
question had to actually work in the practice, own at least 50
percent of the practice and equipment, and must actually
interpret the images that their imaging equipment produced. If
they met that criteria and were in a community with a population
greater than 60,000, they would not be subject to CON. They felt
it was a fair way to take that particular issue off the table
and move forward to deal with the other parts of this
legislation; most of ASHNHA's membership was tremendously
supportive of that language.
He summarized that there was still much to be done; this bill,
unlike the House version, left the discretion and authority with
the commission to make decisions regarding who would need to
report, what they needed to report and when. That was important
in his mind, because so much needed to be accomplished and they
would have to learn a lot along the way to give them that kind
of discretion and to make this work in a positive way for
consumers.
6:13:42 PM
SENATOR ELTON asked if, with Section 5, no CON study was needed
[under SB 300].
MR. BETIT answered that this just set aside most of the disputes
that were costing the department time and money. He agreed with
the committee that they would never reach a conclusion about
whether Certificate of Need helped or hurt consumers in Alaska
unless they took a hard look at that question. Placed in the
hands of someone credible, with sufficient experience and no axe
to grind, he thought the study would point out the concerns they
had been expressing as far as a level playing field.
6:15:45 PM
JIM L. LYNCH, Chief Human Resources Officer, Fairbanks Memorial
Hospital (FMH), Fairbanks, AK, asked for clarification on
several points. He asked whether, on page 5, line 1 of Version
\O, the reference to a borough with a population of 60,000 or
more meant that CON would apply in the Fairbanks North Star
Borough with the modifications Rob Betit referenced as supported
by ASHNHA.
CHAIR DAVIS confirmed that Fairbanks would fall under the
specification of a borough with a population greater than
60,000.
MR. LYNCH agreed and explained that they were trying to
interpret the implications to CON based on that measure.
CHAIR DAVIS said this didn't change the CON.
MR. LYNCH apologized for the confusion, but said it appeared to
read like a new sub-section.
CHAIR DAVIS said he was correct, there was a new sub-section on
page 4.
MR. LYNCH continued that they did support the statements of Rob
Betit and ASHNHA in general, but sought detailed clarification
of that issue to ensure that the CON stayed in place to meet the
needs of the Fairbanks community.
CHAIR DAVIS advised Mr. Lynch that she would get clarification
for him.
6:20:19 PM
MR. LYNCH thanked Chair Davis and said he would be happy to work
with the committee, but did not want the North Star Borough and
the Anchorage municipality to be written out of CON with this
new language.
6:21:05 PM
STANLEY ARCHER, representing himself, Fairbanks, AK, said that
as a long-time resident of Fairbanks with considerable
experience with medical systems as a patient, he was concerned
that the Fairbanks Memorial Hospital (FMH) would be harmed by
the loss of the CON. He said he had watched FMH grow into a
facility that could handle many types of medical procedures that
previously were available only in Anchorage or Seattle. He said
he understood how a free-market economy worked, but that FMH was
not a retail enterprise and should not be compared to one. FMH
was not a for-profit medical facility and had obligations to the
community that for-profit clinics and facilities would not have
to honor; it was tasked with taking care of all patients,
regardless of their ability to pay. He wondered if for-profit
medical facilities that are not obliged to, would be willing to
do the same, and warranted that they would not. Fairbanks
physicians were unwilling even to take Medicare and Medicaid
patients because the level of reimbursement was not up to their
standards. He said in his experience the majority of physicians
in Fairbanks would not take patients who could not show proof of
legitimate health care insurance or demonstrate in some way
their ability to pay, and some were requiring a non-refundable
fee simply to be on their patient list.
MR. ARCHER feared that if CON were eliminated, the new
facilities would heavily court private pay and insurance
business. They would have to do so in order to fill their
facilities to pay for their heavy investment costs, leaving no
room for charity or pro-bono medical care. With that, FMH would
be left with all the charity cases and insufficient income to
support the facility, leading to the degradation of their
community hospital. In closing he asked that the committee
consider the all of evidence carefully and leave the CON in
place.
6:24:41 PM
JEFF COOK, President, Greater Fairbanks Committee Hospital
Foundation Board, Fairbanks, AK, said the board was established
in 1968 to build health care facilities in Fairbanks. It
succeeded the Sisters of Charity, which had St. Joseph's
hospital and chose not to operate it because of financial and
other issues. In two City & Borough elections, the voters chose
not to operate the hospital; fortunately, the foundation was
formed by foresighted citizens who gathered the money to open
the new Fairbanks Memorial Hospital in 1972.
MR. COOK spoke against elimination of the CON, saying it had
worked very well in Fairbanks and was important to the future of
health care in Fairbanks. The CON had not impeded state-of-the-
art health care in Fairbanks. The Foundation Board's motto was
to always act as if there was competition. He said they had a
state-of-the-art cancer center, a new heart catheterization lab,
a new outpatient imaging center, and a newly expanded emergency
department that treated everyone who walked through the door,
regardless of their ability to pay. He asserted that the CON had
not impeded physician recruiting or retention either. In the
past 3 years, 23 physicians had left Fairbanks or ceased
practicing, but they had gained 27 new physicians during that
time. He added that physician recruiting was a problem across
the country and Fairbanks was not unique in that regard.
Fairbanks was actually quite successful due in part to their
acquisition of Tanana Valley clinic and the many employment
options they could offer new physicians.
6:27:21 PM
SENATOR ELTON asked Mr. Cook if they would solve two problems
with the CON issue by modifying Section 5 to add a 3) that said
"accepts any Medicare and Medicaid patients." So to get out of
the CON you would still have to be in a city with a population
of 60,000 or more; the facility would have to be owned by one or
more licensed physicians; and it would have to accept Medicare
and Medicaid patients. He felt that would level the competitive
field while encouraging physicians to accept Medicare and
Medicaid patients.
MR. COOK contended it was not just a matter of taking Medicare
and Medicaid patients; it was also treating the uninsured. He
agreed that would be a step forward, but said he would feel more
comfortable dropping the CON if those who wanted to provide
service did so 24 hours a day, took emergencies including
psychiatric emergencies, helped with the chronic inebriates and
did all the other things that only FMH did.
CHAIR DAVIS said they had quite a few people from Fairbanks
Memorial Hospital signed up to testify, but they were running
out of time. She asked if they were all in favor and, if so, if
they would be willing to come forward and simply state their
position.
6:29:54 PM
JUDY BOGARD, Fairbanks Memorial Hospital, Fairbanks, AK,
supported maintenance of the CON.
6:30:13 PM
KARL SANFORD, Associate Administrator, Fairbanks Memorial
Hospital, supported keeping the CON.
6:30:28 PM
KAREN PERDUE, Board Member, Fairbanks Memorial Hospital,
Fairbanks, AK, wanted to point out how fragile the system was.
She explained that Fairbanks was a city of only about 100,000
people trying to support a Hospital that might normally serve a
population of 250,000 or more, and emphasized that they did not
have the volume Anchorage did. FMH had done everything they
could to increase volumes; they were the only hospital in the
state serving the Indian Health Service (IHS); they served
Alaska Native Beneficiaries; and they did a lot of military
work. Finally, she said that if they were going to start eroding
the CON, there should be a requirement for providers to serve
the uninsured. That was the field the hospital was playing on.
6:32:32 PM
SENATOR ELTON said he thought the section was not as broad as it
was being interpreted. The way he read it, the 60,000 population
for a borough only applied to one component and that was
diagnostic imaging. This bill would not eliminate the CON in
total; it would only eliminate the CON for diagnostic imaging
centers.
CHAIR DAVIS agreed.
6:34:41 PM
RICK CAULFIELD, Director, University of Alaska, Fairbanks (UAF),
Tanana Valley Campus, echoed the concerns of others from the
Fairbanks area. He said their campus worked very closely with
Fairbanks Memorial Hospital and Denali Center (FMH/DC) to meet
work force needs in the health care field and they did not want
the CON eliminated. He was encouraged to see that the commission
envisioned under this legislation would focus on developing a
sustainable health care work force in the state, but could not
think of a better partner than FMH/DC in identifying and meeting
work force needs in the health care field; he was concerned that
doing away with the CON would negatively impact their ability to
partner with FMH.
6:37:18 PM
CHERYL KILGORE, Executive Director, Interior Community Health
Center, said they were a nonprofit Health Center that provided a
broad base of primary care services to people, many of whom were
low income and uninsured or underinsured. She was also a
Hospital Foundation board member and echoed their support for
CON. She felt erosion of the program would make it difficult to
meet the needs of the people in their community.
6:39:00 PM
MARK ROWDEN, Inpatient Supervisor, Pharmacy Department,
Fairbanks Memorial Hospital, Fairbanks, AK, and a member of the
American Society of Hospital Pharmacists, spoke in opposition to
any elimination of the CON. He said there had been a lot of
publicity pro and con about the economic ramifications of the
CON process; but shopping for the best price in health care
didn't really work. He explained that if patients went to more
than one physician, got multiple prescriptions and went to
multiple pharmacies to fill them, they would not get the benefit
of having their whole profile screened for drug interactions; he
was concerned about patient safety.
CHAIR DAVIS thanked him for his testimony and pointed out that
SB 245 would not eliminate the CON.
6:40:54 PM
DOUG BISHOP, representing himself, said he was not aware that
the bill only eliminated the CON for out-patient imaging, which
was an important point. Any elimination of the CON however,
would cause deterioration of the program. He reiterated that
they had an very good community hospital that put a great deal
of money back into their facilities and improved services. He
was concerned that erosion of the CON would dramatically effect
health care and health care availability in their area and did
not think enough research had been done to determine whether
that was true.
6:43:06 PM
DON KUBLEY, Lobbyist, Mat-Su Regional Health [Medical] Center
(MSRMC), wanted to echo some of the statements that had been
made about this bill. As Senator Dyson said, there was a huge
responsibility placed on hospitals to take care of anybody who
walked through the door, 24 hours a day, no matter what the
problem. He cautioned that he was pulling figures out of the air
and asked the committee to bear with his "60,000 foot
perspective," but said if you had twelve departments in a
hospital, 3 of them might be making money. It was those 3
departments that allowed the other 9 critical departments to
keep functioning.
He said when they talked about leveling the playing field, Mat-
Su had played by the rules and on a level field when they went
against the odds to get a CON from the state. As a result of
that they had invested approximately $120 million in the Center,
as well as $15 million in federal money to build a water and
sewer system from Palmer out to the facility. The Mat-Su Borough
now had one of the most sophisticated, best hospitals in the
world serving the fastest growing region in the state, and they
got that by playing by the rules and jumping through all of the
regulatory and monitoring hoops.
He continued that before it even opened, another building began
construction in front of it. It was Providence Hospital building
an X-Ray facility right in front of them, even though they did
not have the state mandated CON to build that facility.
Accordingly, MSRMC filed a grievance with the State of Alaska
and the state told Providence Hospital that the facility was
illegal; but they went ahead. That facility opened despite the
ruling and was sucking business from the Mat-Su Regional
Hospital against the rules that MSRMC had followed. He
admonished that anyone who told them this simple "tweak" to the
CON would level the playing field, was simply trying to
grandfather in a facility that had been wrong from the day
ground was broken. This bill was trying to change the rules in
th
the 9 inning of the World Series with 2 outs; suddenly they
wanted 4 outs instead of 3.
MR. KUBLEY admitted that he had not intended to testify today
and said, with all due respect to Mr. Betit and his
organization, of which MSRMC was a part, when he said a vast
majority of their members were in support of this he was
correct; but the 2 facilities that did not agree with that
position were the second and third largest facilities in the
state. Speaking for Mat-Su Regional, he felt this was just
another attempt to change the law and retroactively give them
[Providence Hospital] permission do run a facility they were
told was illegal. He said he believed the committee a had letter
from MSRMC's CEO Norm Stevens that outlined the severe damage
that facility was doing to their hospital. He hoped the
committee would take a good hard look at what that small change
would actually do to the level playing field in this state as it
had been for a long time.
6:49:42 PM
CHAIR DAVIS said SB 245 wasn't new. It had been heard twice
before.
MR. KUBLEY said he appreciated that and had testified on it
before, which was why he did not intend to do so today; but
there was a change in the title that put in X-Ray imaging
centers and completely changed the bill for Mat-Su Regional and
for the second largest hospital in the state, which was not
present because they did not know about the change.
CHAIR DAVIS argued the point, saying the change was not new.
MR. KUBLEY said it was the first time he had seen "diagnostic
imaging" in the title.
CHAIR DAVIS said he was right.
6:51:13 PM
PAUL FUHS, Lobbyist, Alaska Open Imaging Center, LLC.,
Anchorage, AK, said what they had just heard was a complete
mischaracterization of what was going on with this bill. He said
this [diagnostic imaging] was in the Governor's bill and in the
original version, it just was not in the title. Now that the
bill was restricted to this, it was proper to add it to the
title. He insisted that Alaska Open Imaging had also played by
the rules. The legislature passed a bill in 2003 but did not
define what the terms meant; this bill would just define the
terms. It had led to several lawsuits, and no one could make any
decisions with regard to imaging equipment in the state. It had
put the department in a no-win situation, so the Attorney
General said they had to at least define the terms and that was
what this bill did.
CHAIR DAVIS held SB 245 in committee.
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