Legislature(2013 - 2014)BUTROVICH 205
02/03/2014 01:30 PM Senate HEALTH & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| SB135 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 135 | TELECONFERENCED | |
SB 135-EXTEND ALASKA HEALTH CARE COMMISSION
1:37:19 PM
CHAIR STEDMAN announced that the only order of business would be
SB 135.
DAVID SCOTT, Staff, Senator Donny Olson, Alaska State
Legislature, Juneau, Alaska presented SB 135 on behalf of the
sponsor. He explained that the bill extends the sunset of the
Alaska Health Care Commission until June 30, 2017. He said the
Commission was established in 2010 and consists of eleven voting
members and three non-voting members representing the Alaska
House of Representative, the Senate, and the Office of the
Governor.
He noted that the Legislative Auditor has concluded that the
Commission is serving the public interest and is meeting its
statutory obligations. There are some concerns and
recommendations suggested by Legislative Budget and Audit
(LB&A). The bill has an attached Department of Health and
Social Services fiscal note.
CHAIR STEDMAN opened public testimony.
1:39:52 PM
DAVID MORGAN, Member, Alaska Health Care Commission, Anchorage,
Alaska, spoke in support of SB 135. He remarked that data and
reports from AHCC have been used extensively, especially those
related to cost transparency and cost drivers related to health
care cost increases. He said, as an economist, he finds AHCC
studies and information have helped to solve problems related to
increasing health care costs, such as those related to the
Anchorage School District - Medicaid, insurance rates, and
retiree health care costs. He pointed out that retiree health
care costs are the main driver of increasing costs on the public
and private sectors.
He said the Commission has held unbiased studies to help develop
ideas to address these problems. The Commission is a good return
on investment for the state and for the public. Alaska health
care insurance underwriters voiced appreciation for the credible
information provided by the Commission about containing health
care costs.
1:44:21 PM
CHAIR STEDMAN noted a fiscal note from the Department of Health
and Social Services showing the cost to continue the Commission
in the amount of $165,000 in federal funds and $335,000 in
general funds for a total of $500,000. The funding is currently
included in the Governor's proposed FY 15 operating budget. He
said the bill would be heard next in the Senate Finance
Committee.
1:45:14 PM
KRIS CURTIS, Legislative Auditor, Legislative Audit Division,
Juneau, Alaska, presented information related to SB 135. She
read from the following report:
Our agency conducted a sunset review of the Alaska
Health Care Commission. The report is dated May 6,
2013 and should be in your meeting packets. The
purpose of the audit was to determine whether the
commission was operating in the public's interest and
whether its termination date should be extended.
Since this commission is new, our audit provided
background information on its creation. The Alaska
Health Care Commission was created as a way to help
reform health care in Alaska. It was first established
by an Administrative Order in 2008 and then
reestablished in statute in 2010. The legislature
intended for the commission to achieve reform through
developing a statewide health plan. The health plan
was to be based on 'education, sustainability,
management efficiency, health care effectiveness,
public private partnerships, research, personal
responsibility, and individual choice.'
The original commission established in 2008 did not
consider itself responsible for developing a statewide
health plan. Instead, the commission focused its
efforts on specific policy recommendations. When the
commission was reestablished in statute in 2010,
commission members agreed to continue the prior
commission's work and use the same general approach.
Rather than working on a state plan, the commission
collected information from various cost studies and
developed high level policy recommendations. The
commission also established general priorities which
evolved into a strategic framework. The framework is
summarized as Appendix A of the audit report.
Overall, the audit concluded that the commission is
operating in the public's interest, but improvements
in the development of a state health plan are needed
to justify its continued existence. The legislature
intended the commission to work together with the
Department of Health and Social Services to create a
comprehensive health plan. Though various policy
recommendations were developed, the commission did not
collaborate with DHSS to achieve its intended outcome
and there is no state health plan. Consequently, the
audit recommends only a three year extension - which
we considered adequate time to develop a plan.
The audit concludes that this commission is active.
Several studies have been conducted and the foundation
for a plan has been developed. Our concern is that the
framework lacks the actionable components necessary
for effective implementation. It does not identify
specific actions to be taken, the timeframe for
completion, the organization responsible for taking
action, the definition of a successful outcome, nor
does it specify how progress will be monitored and
measured. Without a statewide health plan, the actions
of the commission may not effectively impact health
care in Alaska. The audit recommends the commission
coordinate with DHSS' commissioner to identify each
agency's roles and responsibilities regarding
developing a plan and pursue development accordingly.
The audit also includes two administrative-type
recommendations. One to improve public noticing of
meetings and one to ensure annual reports include all
statutorily required components.
1:48:54 PM
WARD HURLBURT, Chief Medical Officer, Department of Health and
Social Services, Chair, Alaska Health Care Commission,
Anchorage, Alaska, provided information related to SB 135. He
explained that the Commission was established to look at the
issues of affordability, accessibility, and quality of health
care. The Commission has spent most of its time looking at
issues related to cost and quality, which go hand in hand.
He reported that the United States has the highest health care
costs in the world. He compared costs in the U.S. to those in
Switzerland. Alaska has the highest health care costs of all
states, except for Massachusetts, and spends more than $8
billion a year. The state government spends about $2.5 billion a
year on Medicaid and employee and retiree health care plans. The
unfunded cost for state retirees is about $4 billion, which
could be brought down by changing health care spending.
DR. HURLBURT referred to a recent headline in the Anchorage
Daily News on January 22 about health care costs in their school
district. Over the last 30 years, the Anchorage School District
has had an average salary increase of about 1 percent above the
rate of inflation, but health care costs have increased by 15
percent more than the cost of inflation. Benefits costs have
gone from 20 percent of the compensation costs to 45 percent.
The Juneau and Fairbanks School Districts have the same
findings.
He indicated that the U.S. News and World Report and the Los
Angeles Times recently reported that in California hospitals a
standard delivery costs between $3,300 and $37,000. He gave
another example of high medical costs in the New York Times. The
Economist had an article called "Need to Know" that highlighted
differences in mortality rates. He concluded that issues of
transparency in terms of costs, outcomes, and quality are a
focus of the Commission.
DR. HURLBURT observed that the legislative audit was very
helpful and constructive. The Commission has embraced the idea
of fostering a department statewide health plan. The Commission
serves as a convener for payers, the department, and the
administration regarding health care costs and transparency. He
stressed that the Commission is not looking for a government
solution, but rather a market-based solution. He emphasized that
equal partnerships will serve Alaskans well and providers need
to be leaders in the process.
1:55:19 PM
SENATOR MEYER asked if three years is enough time to develop a
health care plan.
MR. HURLBURT replied that the audit is a positive and
constructive process and three years is a reasonable time. He
suggested setting a mid-point to determine if the Commission is
meeting the needs of the state.
SENATOR MEYER asked why the Commission employs two full-time
people.
MR. HURLBURT explained that in the Commission's role of convener
and facilitator, there is a lot of outside work and
representation to do. He described the roles each employee does
regarding putting documents together, developing policy, and
providing administrative support.
1:57:35 PM
SENATOR MEYER inquired about the funding and whether there is a
state match.
MR. HURLBURT clarified that the state qualifies for Medicaid
funding which equals about one-third of the budget.
1:58:10 PM
SENATOR MEYER moved to report SB 135 from committee with
individual recommendations and attached fiscal note(s).
CHAIR STEDMAN announced that without objection, SB 135 moves
from the Senate Health and Social Services Standing Committee
with the request for a finance committee referral because it has
a fiscal note
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 135 Bill.pdf |
SHSS 2/3/2014 1:30:00 PM |
SB 135 |
| SB 135 DHSS FN.pdf |
SHSS 2/3/2014 1:30:00 PM |
SB 135 |
| SB 135 Sponsor Statement.pdf |
SHSS 2/3/2014 1:30:00 PM |
SB 135 |
| SB 135 LBA Audit.pdf |
SHSS 2/3/2014 1:30:00 PM |
SB 135 |
| SB 135 - AHCC 2013 Annual Report.pdf |
SHSS 2/3/2014 1:30:00 PM |
SB 135 |