Legislature(2019 - 2020)BUTROVICH 205

04/01/2019 01:30 PM HEALTH & SOCIAL SERVICES

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Audio Topic
01:31:09 PM Start
01:31:40 PM SB1
02:44:07 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 93 MEDICAL PROVIDER INCENTIVES/LOAN REPAYM'T TELECONFERENCED
<Bill Hearing Canceled>
+= SB 1 REPEAL CERTIFICATE OF NEED PROGRAM TELECONFERENCED
Heard & Held
-Invited Testimony Followed by Public Testimony-
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
      SENATE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE                                                                    
                         April 1, 2019                                                                                          
                           1:31 p.m.                                                                                            
                                                                                                                                
                             DRAFT                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator David Wilson, Chair                                                                                                     
Senator John Coghill, Vice Chair                                                                                                
Senator Gary Stevens                                                                                                            
Senator Cathy Giessel                                                                                                           
Senator Tom Begich                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 1                                                                                                               
"An Act repealing the certificate of need program for health                                                                    
care facilities; making conforming amendments; and providing for                                                                
an effective date."                                                                                                             
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 93                                                                                                              
"An Act relating to a workforce enhancement program for health                                                                  
care professionals employed in the state; and providing for an                                                                  
effective date."                                                                                                                
                                                                                                                                
     - BILL HEARING CANCELED                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB   1                                                                                                                  
SHORT TITLE: REPEAL CERTIFICATE OF NEED PROGRAM                                                                                 
SPONSOR(s): SENATOR(s) WILSON                                                                                                   
                                                                                                                                
01/16/19       (S)       PREFILE RELEASED 1/7/19                                                                                
01/16/19       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/16/19       (S)       HSS, FIN                                                                                               
03/27/19       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
03/27/19       (S)       Heard & Held                                                                                           
03/27/19       (S)       MINUTE(HSS)                                                                                            
03/29/19       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
03/29/19       (S)       -- MEETING CANCELED --                                                                                 
04/01/19       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
KEITH SMITH, M.D., Medical Director                                                                                             
Surgery Center of Oklahoma                                                                                                      
Oklahoma City, Alaska                                                                                                           
POSITION STATEMENT: Testified about why Alaskans seek care at                                                                 
his center.                                                                                                                     
                                                                                                                                
SONYA CONANT, Human Resources Director                                                                                          
Matanuska-Susitna Borough                                                                                                       
Palmer, Alaska                                                                                                                  
POSITION STATEMENT: Testified on cost savings from sending                                                                    
employees out of state for surgery.                                                                                             
                                                                                                                                
JEANNIE MONK, Senior Vice President                                                                                             
Alaska State Hospital and Nursing Home Association (ASHNHA)                                                                     
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Opposed SB 1.                                                                                             
                                                                                                                                
MIKE POWERS, Chief Operating Officer                                                                                            
Foundation Health Partners                                                                                                      
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Opposed SB 1.                                                                                             
                                                                                                                                
FRED BROWN, Executive Director                                                                                                  
Pacific Health Coalition                                                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Supported SB 1.                                                                                           
                                                                                                                                
WARD HINGER, Chief Executive Officer                                                                                            
Imaging Associates                                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Opposed SB 1.                                                                                             
                                                                                                                                
PATRICK SHIER, Alaska Membership Representative                                                                                 
Pacific Health Coalition                                                                                                        
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT: Supported SB 1.                                                                                           
                                                                                                                                
MIKE PRAX, representing self                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Supported SB 1.                                                                                           
                                                                                                                                
JARED KOSIN, Associate Administrator                                                                                            
Mat-Su Regional Medical Center                                                                                                  
Palmer, Alaska                                                                                                                  
POSITION STATEMENT: Opposed SB 1.                                                                                             
                                                                                                                                
DAVID HYMAN, M.D., representing self                                                                                            
Co-author of Overcharged:  Why Americans Pay Too  Much for Health                                                               
Care                                                                                                                            
Law Professor                                                                                                                   
Georgetown University                                                                                                           
Washington, D.C.                                                                                                                
POSITION STATEMENT: Supported SB 1.                                                                                           
                                                                                                                                
MONIQUE MARTIN, Director                                                                                                        
Government Relations and Regulatory Navigation                                                                                  
Alaska Regional Hospital                                                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Opposed SB 1.                                                                                             
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:31:09 PM                                                                                                                    
CHAIR DAVID WILSON  called the Senate Health  and Social Services                                                             
Standing Committee meeting  to order at 1:31 p.m.  Present at the                                                               
call to order  were Senators Coghill, Stevens,  Begich, and Chair                                                               
Wilson.                                                                                                                         
                                                                                                                                
                                                                                                                                
           SB   1-REPEAL CERTIFICATE OF NEED PROGRAM                                                                        
                                                                                                                                
                                                                                                                                
1:31:40 PM                                                                                                                    
CHAIR  WILSON  announced the  consideration  of  CSSB 1(HSS).  He                                                               
noted the committee had adopted  CSSB 1, Version 31-LS0001\M, and                                                               
heard an overview  and invited testimony on March  [27] and would                                                               
continue the invited testimony today.                                                                                           
                                                                                                                                
1:32:40 PM                                                                                                                    
KEITH SMITH, M.D., Medical Director,  Surgery Center of Oklahoma,                                                               
Oklahoma City,  Alaska, said  that calling to  speak in  favor of                                                               
repealing Certificate of Need (CON)  was not in his self-interest                                                               
because any  relaxation of CON  in Alaska will restrict  the flow                                                               
of patients from  Alaska to his Surgery Center  in Oklahoma City.                                                               
He has always fought against  CON because it is raw protectionism                                                               
for the existing status quo and  the hospitals in the area. It is                                                               
still a prevalent problem, but increasingly  it is not as much of                                                               
a problem  because a  lot of  patients are  willing to  fly away.                                                               
They  will leave  abusive pricing.  Most of  the patients  at the                                                               
surgery  center are  from out  of state.  Historically, most  are                                                               
from  Alaska  and Wisconsin.  That  reflects  abusive pricing  in                                                               
those  regions. He  would like  to encourage  them to  completely                                                               
rescind any  CON regulations,  but that is  not going  far enough                                                               
because  once the  Certificate of  Need regulation  is gone,  the                                                               
risk of  starting a  facility is still  very high  because people                                                               
fear CON rules will come back.                                                                                                  
                                                                                                                                
DR.  SMITH said  that if  the state  of Alaska  is interested  in                                                               
better quality  care and lower cost,  not only should the  CON be                                                               
repealed  but the  state should  consider buying  from those  who                                                               
would display their  pricing up front for all to  see. That would                                                               
be  a positive  move in  the marketplace.  All the  patients from                                                               
Alaska have been thrilled with the  care and price at the Surgery                                                               
Center and  they know the price  before they get here.  They have                                                               
had arrangements  in the  past with the  Alaska Health  Trust for                                                               
teachers.  They  came  in  a steady  stream  for  their  surgical                                                               
procedures. He  would encourage them  to rescind  all restrictive                                                               
language  that  prohibits  new   competitors  from  entering  the                                                               
marketplace. It will  lower prices and quality  will soar because                                                               
that is what competition does.  It typically makes quality better                                                               
and prices lower.                                                                                                               
                                                                                                                                
1:36:42 PM                                                                                                                    
SENATOR  BEGICH  asked  how  many patients  he  got  from  Alaska                                                               
annually.                                                                                                                       
                                                                                                                                
DR. SMITH answered  probably 50. It has been higher  than that in                                                               
the past, but they see about four or five a month.                                                                              
                                                                                                                                
SENATOR BEGICH asked  if they come to Oklahoma  because the price                                                               
or service is better or both.                                                                                                   
                                                                                                                                
DR. SMITH  replied that initially  patients are attracted  to the                                                               
price. They don't know what the  service is until after they have                                                               
left,  but they  go back  to Alaska  and tell  their friends  and                                                               
their  friends come  to the  center. The  Surgery Center  charges                                                               
$4,500 for  repair of the  ventral hernia. One patient  in Alaska                                                               
was  quoted $60,000.  One patient  coming this  month for  a knee                                                               
replacement was quoted  $90,000. Their price is  $15,499. As long                                                               
as  there are  regulations  that prevent  new competition,  price                                                               
gougers have no incentive to address their ways.                                                                                
                                                                                                                                
1:38:44 PM                                                                                                                    
SONYA   CONANT,  Human   Resources  Director,   Matanuska-Susitna                                                               
Borough,  Palmer,   Alaska,  said  the  Mat-Su   employee  health                                                               
insurance program has  set up a program to send  employees out of                                                               
state  for  surgery for  cost  containment  purposes. The  Mat-Su                                                               
Borough  has a  self-funded  health fund.  They  cover about  320                                                               
employees and 600 dependents. In  2010-2011, they were looking at                                                               
ways to reduce  health insurance costs. Their  medical claims for                                                               
that  plan year  were $4.2  million  or $1,300  per employee  per                                                               
month. They  looked at many  options to reduce costs  and provide                                                               
good care  to their  employees. In 2010  they joined  the Pacific                                                               
Health Coalition, a group of  self-funded plans in Alaska and the                                                               
Pacific Northwest  to negotiate with providers,  pharmacy benefit                                                               
managers, etc., to reduce costs to the plan.                                                                                    
                                                                                                                                
MS CONANT  said Mat-Su looked  at various ways to  control costs.                                                               
When she compares  their 2010-2011 year plan costs  of $1,300 per                                                               
employee per month  to the end of 2018 plans  costs of $1,548 per                                                               
employee  per month,  that is  a 19  percent increase  over seven                                                               
years, which  is very good.  They have  kept their costs  low and                                                               
under  the annual  rate of  health care  increases, In  September                                                               
2017, they still felt they had  money to be saved, so through the                                                               
coalition,  they  joined  the  BridgeHealth   plan,  which  is  a                                                               
nonemergency surgery benefit.  It reduces costs for  the plan and                                                               
employees. The providers that are part  of the program are in the                                                               
top  25th  percentile,  based on  third-party  data,  across  the                                                               
country for their  surgical specialty. The employee  has a choice                                                               
to use BridgeHealth or not. They  can use their local provider or                                                               
regional hospital. If they choose  to use BridgeHealth, they have                                                               
zero  out-of-pocket costs  and deductible  or copay.  The program                                                               
pays the selected  provider a negotiated bundle  rate in advance,                                                               
so that  everything is paid  for before the surgery  happens. The                                                               
employee  works  with  a  care   coordinator  to  get  everything                                                               
scheduled and coordinated  with the provider. The  plan sends the                                                               
employee and an  escort with first-class air  fare and allowances                                                               
for meals  and lodging.  The employee comes  back to  Alaska when                                                               
medically able.  One of their  concerns was that  providers would                                                               
not  do  follow-up   care  if  they  did  not   do  the  surgery.                                                               
Fortunately, they have not run into  that. If they do, there is a                                                               
coalition of  network providers who  would do the  follow-up care                                                               
if necessary.                                                                                                                   
                                                                                                                                
1:43:56 PM                                                                                                                    
SENATOR GIESSEL joined the committee.                                                                                           
                                                                                                                                
MS. CONANT said  that for the plan year 2017-2018,  they had four                                                               
surgeries go through the BridgeHealth  plan. The cost of the four                                                               
surgeries was just  over $79,000 with a net  savings of $104,000.                                                               
They are averaging  a savings of $25,000 to  $30,000 per surgery.                                                               
This year,  from November  through the end  of January,  a three-                                                               
month period,  they had  three surgeries completed  at a  cost of                                                               
$71,500  and  a net  savings  of  $76,000.  They are  seeing  the                                                               
benefits of  this program. Their  employees have  positive things                                                               
to say about it. There was  an initial learning curve. There were                                                               
delays  in  getting  medical  records  to  providers  to  review.                                                               
Through  additional  communication   and  having  employees  work                                                               
directly with their  local providers, they have  resolved that in                                                               
most cases. They are excited.  They would like their employees to                                                               
get their  surgeries taken  care of  as soon as  they can  and as                                                               
comfortably as they  can. This provides an option to  get it done                                                               
with no  out-of-pocket costs and  save the plan money.  They have                                                               
had  some providers  approach the  coalition  and indicate  their                                                               
willingness to potentially offer the  same bundled rate. They are                                                               
only  in  the  second  year.  As  their  numbers  increase,  they                                                               
anticipate  that they  will  to  stay at  or  below the  national                                                               
health care increases.                                                                                                          
                                                                                                                                
CHAIR  WILSON clarified  that competition  helped to  lower their                                                               
costs.                                                                                                                          
                                                                                                                                
MS. CONANT replied  yes because local providers  offered the same                                                               
rate. That  is a cost-savings  measures. This gives  them another                                                               
negotiation tool locally.                                                                                                       
                                                                                                                                
SENATOR BEGICH asked  if she were testifying  that elimination of                                                               
the Certificate  of Need  program would  create more  options and                                                               
more competition  and consequently  keep that  work in  state and                                                               
competitive.                                                                                                                    
                                                                                                                                
MS. CONANT  responded that  she did  not know.  She comes  from a                                                               
hospital background. There have  been many for-profit centers and                                                               
day surgery centers pop up. If  this is going to get quality care                                                               
for Alaskans at a reduced price,  then she is supportive, but she                                                               
thinks it goes beyond the  Certificate of Need. Providers need to                                                               
be up  front about costs and  set them at a  reasonable rate. The                                                               
speaker before her talked about  providers posting their rates so                                                               
that their employees would know what they need to pay.                                                                          
                                                                                                                                
1:48:19 PM                                                                                                                    
SENATOR BEGICH asked  if they would need to  use the BridgeHealth                                                               
network if there were more competition locally.                                                                                 
                                                                                                                                
MS. CONANT  said that it  could still be a  benefit. BridgeHealth                                                               
providers are in the top 25th  percentile. They do not want their                                                               
employees just  going to the  cheapest person. If they  get high-                                                               
quality providers with competitive  rates, then she would imagine                                                               
that a number of their employees would prefer to remain at home.                                                                
                                                                                                                                
SENATOR BEGICH asked what her  criteria would be for high quality                                                               
for new surgery centers and new providers.                                                                                      
                                                                                                                                
MS.  CONANT  answered  that  they  should  have  some  indicators                                                               
through the accreditation  and reaccreditation process. Different                                                               
agencies do  the accreditation. There are  other indicators, such                                                               
as physician quality ratings. Whether  applying for a Certificate                                                               
of Need or going through  accreditation, there should be measures                                                               
of quality of services and patient outcomes                                                                                     
                                                                                                                                
CHAIR WILSON asked what the annual  cost for insurance is for the                                                               
Mat-Su Borough.                                                                                                                 
                                                                                                                                
MS. CONANT answered that the annual  cost is about $8 million for                                                               
medical, dental, vision, and administrative fees.                                                                               
                                                                                                                                
CHAIR  WILSON  asked if  she  knew  what  annual mill  rate  that                                                               
equated to.                                                                                                                     
                                                                                                                                
MS. CONANT answered no.                                                                                                         
                                                                                                                                
1:52:06 PM                                                                                                                    
CHAIR WILSON opened public testimony.                                                                                           
                                                                                                                                
1:52:21 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
1:52:24 PM                                                                                                                    
CHAIR  WILSON  said  he  would   allow  three  minutes  for  each                                                               
testifier.                                                                                                                      
                                                                                                                                
1:53:29 PM                                                                                                                    
JEANNIE MONK,  Senior Vice President,  Alaska State  Hospital and                                                               
Nursing Home Association (ASHNHA),  Juneau, Alaska, opposed SB 1.                                                               
She said  she was testifying in  opposition to SB 1  on behalf of                                                               
Alaska's hospitals  and skilled nursing facilities  for four main                                                               
reasons.  Since she  only has  three minutes,  she will  give the                                                               
summary in writing. They have  been before the committee multiple                                                               
times in  the past  and many committee  members have  heard their                                                               
concerns. Instead, she wanted to focus  on one issue she heard at                                                               
last  week's hearing  related to  a delayed  implementation until                                                               
2024 to  allow Department  of Health  and Social  Services (DHSS)                                                               
time to  build good regulations.  They agree that  problems exist                                                               
with  the current  CON  program and  they  support improving  CON                                                               
through  regulation. However,  they are  concerned about  whether                                                               
after  a  full   repeal,  DHSS  will  have   authority  to  draft                                                               
regulations concerning  CON-like activities.  If the  repeal goes                                                               
through,  all  regulations  must  also be  repealed  because  the                                                               
statutory authority  that permitted them will  have been revoked.                                                               
Simply stated,  she asked  how the department  will know  what to                                                               
regulate without statute.  If the goal is to  improve CON through                                                               
regulation, which they  strongly support, why is  it necessary to                                                               
repeal  the statute.  They support  changing  the regulation  and                                                               
believe that repeal  is not necessary and, in  fact, could hamper                                                               
the effort to improve regulation.                                                                                               
                                                                                                                                
MS.  MONK said  she  wanted to  address  the analogies  comparing                                                               
health  care  to  coffee  shops or  fast  food  restaurants.  The                                                               
reality is  that health care in  Alaska does not function  like a                                                               
free market  with or without  CON. Imagine there is  a McDonald's                                                               
on one  corner and Burger  King comes  in across the  street with                                                               
lower  prices. Suppose  that McDonald's  is subject  to the  fast                                                               
food  equivalent  of  EMTALA  [Emergency  Medical  Treatment  and                                                               
Active Labor Act] and must  give everyone free burgers and fries.                                                               
Suppose that  Burger King can  close at 11 while  McDonald's must                                                               
be open all  night and give free burgers  to customers, including                                                               
some  with serious  behavioral health  issues  who are  sometimes                                                               
violent.  Suppose that  the community  expects  McDonald's to  be                                                               
prepared  in case  there  is an  earthquake  or other  emergency.                                                               
Suppose that  McDonald's rates  are set  by Medicaid  or Medicare                                                               
and they  can be cut without  warning. This is not  a free market                                                               
system. McDonald's  must abide by certain  regulations and Burger                                                               
King  does  not.  Burger  King  doesn't  have  to  see  difficult                                                               
customers or give  the food away for free. It  is much easier for                                                               
them   to  have   lower  prices   than  McDonald's   because  the                                                               
expectations  are not  the same.  Ultimately,  it is  not a  free                                                               
market if each  business is subject to  different rules. Creating                                                               
a free market for health care  and repealing CON are two separate                                                               
issues.  They would  like  to  see DHSS  work  with providers  to                                                               
improve  the regulations.  Repealing CON  would be  destabilizing                                                               
during an uncertain time in health care.                                                                                        
                                                                                                                                
1:57:10 PM                                                                                                                    
SENATOR COGHILL  asked if  she had given  any suggestions  on the                                                               
CON process to the department.                                                                                                  
                                                                                                                                
MS. MONK answered  that a work group worked  extensively over six                                                               
months  to  come   up  with  a  series   of  recommendations  for                                                               
regulations change that they shared with the department.                                                                        
                                                                                                                                
SENATOR BEGICH asked if that is available to the public.                                                                        
                                                                                                                                
MS. MONK  answered that she  didn't see  any reason not  to share                                                               
it. It is very technical, but they would be happy to share it.                                                                  
                                                                                                                                
1:57:51 PM                                                                                                                    
SENATOR STEVENS  said he has  three small community  hospitals in                                                               
his  district  in  Homer,  Cordova,  and  Kodiak.  They  are  all                                                               
concerned about CON being repealed.  They are concerned about the                                                               
emergency wards  and what they have  to do and the  business that                                                               
could  be  cherry-picked  from  them.  He  asked  if  she  saw  a                                                               
difference between smaller communities and larger communities.                                                                  
                                                                                                                                
MS  MONK  replied  that  the  smaller  communities,  which  would                                                               
include  Fairbanks,  Soldotna, Homer,  and  Juneau,  have a  much                                                               
greater concern. She would say the  market in Anchorage has a lot                                                               
of surgery centers and that has  not worked the magic of lowering                                                               
prices. In  Homer, for  example, a surgery  center could  put the                                                               
hospital at extreme risk, so, yes, she sees a difference.                                                                       
                                                                                                                                
1:59:10 PM                                                                                                                    
MIKE   POWERS,  Chief   Operating   Officer,  Foundation   Health                                                               
Partners,  Fairbanks,   Alaska,  opposed  SB  1.   He  said  that                                                               
Foundation  Health  Partners,  which  is a  small  health  system                                                               
consisting of Fairbanks Memorial  Hospital, Tanana Valley Clinic,                                                               
and  Denali Center(  a skilled  long-term  care facility)  oppose                                                               
repeal  of CON.  He has  been  part of  completing and  defending                                                               
Certificate of  Need over  the last 30  years. His  experience in                                                               
Fairbanks is that opponents of  CON laws have been solely limited                                                               
to profitable  services, typically  surgery and  imaging centers.                                                               
Opponents of CON and the  inherent regulatory review of redundant                                                               
niche services typically cite improved  quality and reduced costs                                                               
as  justification for  doing away  with this  public process.  In                                                               
other words, physicians  perform a high volume of  a narrow range                                                               
of procedures in these imaging and surgery centers.                                                                             
                                                                                                                                
MR.  POWERS  said  that  advocates  of  CON  and  meaningful  and                                                               
regulatory  and  public review  of  these  redundant health  care                                                               
services,  such  as  himself,  agree  that  niche  providers  can                                                               
theoretically create  efficiencies, but typically at  the expense                                                               
of the greater community good  and the community hospital by one,                                                               
cherry-picking  the  most  profitable   patients  away  from  the                                                               
general   hospitals   and   two,  by   threatening   the   cross-                                                               
subsidization  of   profitable  services  and  putting   at  risk                                                               
Medicare/Medicaid,   behavioral   health,   primary   care,   and                                                               
pediatric admissions. In their unique  Alaska market, the absence                                                               
of meaningful regulatory review looking  out for the community as                                                               
a  whole creates  unfair competition  by siphoning  off the  most                                                               
profitable  patients  and  parts  of  medicine.  Niche  providers                                                               
deprive  general hospitals  of the  scale and  scope and  profits                                                               
they  need  for  the  unprofitable   departments,  such  as  burn                                                               
programs,  emergency rooms,  and behavioral  health secure  units                                                               
that operate 24/7.                                                                                                              
                                                                                                                                
MR.  POWERS said  that his  experience  in Alaska  these past  30                                                               
years  has  confirmed  for   him  that  physician-owned  surgical                                                               
centers tend  to treat those  with better insurance  coverage and                                                               
those  with  lower  clinical  risk.  This  leaves  the  community                                                               
hospitals like Fairbanks Memorial to  treat the uninsured and the                                                               
highest clinical risk patients.  Those who oppose CON regulations                                                               
argue that  niche competitors who  are not subject  to regulatory                                                               
approval   foster  competition,   lower  charges,   and  increase                                                               
quality. He has seen no evidence of that in Fairbanks.                                                                          
                                                                                                                                
MR.  POWERS  said that  the  challenge  to  public policy  is  to                                                               
facilitate  development  of  a responsible  marketplace,  one  in                                                               
which  the desired  benefits  of competition  and  real value  in                                                               
health   care  are   realized.  Meeting   community  needs,   not                                                               
individual  investor   needs,  is   the  key  to   maintaining  a                                                               
responsible   marketplace   in   the  solo   community   hospital                                                               
environments  of  Alaska. Through  a  balance  of market  forces,                                                               
community planning, and  CON regulation, it is  possible to shape                                                               
a responsible marketplace.                                                                                                      
                                                                                                                                
MR. POWERS said  that the current market structure,  though it is                                                               
not a classically  competitive one, achieves the  desired goal of                                                               
competition and  greater access, lower costs,  and higher quality                                                               
of health.  The CON  helps create  a responsible  marketplace and                                                               
outweighs  the fairly  simplistic view  of the  classic model  of                                                               
supply and demand by understanding  the cost of cherry-picking to                                                               
a  community and  by understanding  who is  and who  isn't taking                                                               
their fair share  of the indigent load  and the Medicare/Medicaid                                                               
load. CON  doesn't limit competition; it  promotes good community                                                               
planning.                                                                                                                       
                                                                                                                                
2:03:26 PM                                                                                                                    
FRED  BROWN,   Executive  Director,  Pacific   Health  Coalition,                                                               
Anchorage, Alaska,  supported SB  1. He said  the coalition  is a                                                               
nonprofit,  parent company  that was  formed nearly  25 years  by                                                               
four Alaska health plans. It  now comprises over 45 member health                                                               
plans in Alaska  and the Pacific Northwest. The  fund consists of                                                               
employer-sponsored health  plans, including the state  of Alaska,                                                               
and borough and municipal and  school-district sponsored plans as                                                               
well as  private employers and  Taft-Hartley health  plans. Their                                                               
member  funds   represent  over   100,000  employees   and  their                                                               
dependents in  Alaska and 150,000  in the Pacific  Northwest. Ms.                                                               
Conant  from the  Mat-Su  Borough  is one  of  their members  and                                                               
summarized  what they  do. The  mission  of the  coalition is  to                                                               
ensure that Alaska and Northwest  workers and their families have                                                               
access  to value  and quality-based  health  care, benefits,  and                                                               
service.  To this  end, they  broadly  encourage competition  and                                                               
open access to health care markets.                                                                                             
                                                                                                                                
MR. BROWN  said that ten years  ago they testified in  support of                                                               
granting  the  Certificate  of  Need to  the  Surgery  Center  of                                                               
Fairbanks. However,  this was  insufficient and  more competition                                                               
is needed in Fairbanks and  Alaska generally. As the committee is                                                               
well  aware, Alaska  has the  highest  health care  costs in  the                                                               
United States.  They tried  for many  years to  do their  part to                                                               
bring  down  these costs  by  contracting  with orthopedists  and                                                               
other specialists in  Fairbanks and across the state  to add them                                                               
to their  preferred provider network. Only  recently, after their                                                               
member  plans started  contracting  with  BridgeHealth for  these                                                               
travel benefits and  their patients began traveling  out of state                                                               
for  treatment, have  local providers  recognized  their need  to                                                               
compete. Now they  have orthopedists in their  network. Repeal of                                                               
CON   legislation  is   the  next   logical  step   to  encourage                                                               
competition. The  Alaska health  care market should  move forward                                                               
toward free  market operations.  As to  any issues  associated to                                                               
cherry-picking the most profitable surgeries  as well as the cost                                                               
of indigent care and other  regulations, there are better ways to                                                               
subsidize providers.                                                                                                            
                                                                                                                                
2:06:06 PM                                                                                                                    
WARD  HINGER,   Chief  Executive  Officer,   Imaging  Associates,                                                               
Anchorage, Alaska,  opposed SB 1. He  said more than half  of the                                                               
state has some  sort of CON. There is nothing  about the CON that                                                               
prevents  competition.  It merely  provides  a  mechanism to  the                                                               
state to determine what kind  of health care investment is needed                                                               
and  allow  it  to  go  forward in  a  planned,  thoughtful,  and                                                               
hopefully safe  manner. Alaska requiring  CON does not  allow one                                                               
business   or  provider   to  create   a   monopoly  or   prevent                                                               
competition. The  decision to  issue or not  issue lies  with the                                                               
state of Alaska, specifically DHSS.  Removing checks and balances                                                               
would negatively impact patient safety and quality of care.                                                                     
                                                                                                                                
MR. HINGER said  that historically, the state of  Alaska has been                                                               
inconsistent and  even negligent  in administering the  CON. They                                                               
have  shirked the  greater responsibility  given to  them through                                                               
CON  to demand  quality and  successful investments  that benefit                                                               
all  of  Alaskans.  Eliminating  CON would  do  two  things  very                                                               
quickly.  He has  over  20 years  of  health care  administrative                                                               
experience, half of that in the  state of Alaska. First, it would                                                               
encourage the worst type of  health care investment. That is, the                                                               
kind that  only makes money at  the highest margins with  no need                                                               
to demonstrate  quality, safety,  or necessity. Second,  it would                                                               
cause  quality centers  that hold  CON, like  theirs, to  have to                                                               
compete  with others  that do  not  share their  community-minded                                                               
view  of  service  and  quality.   In  a  sense,  they  would  be                                                               
economically forced  to match their model.  Currently, they, like                                                               
the local hospitals, are an  all-modality service. They offer all                                                               
imaging services for comprehensive and  quality care. A number of                                                               
those  important  services  are  at  low  margin  to  no  margin,                                                               
alongside some of the highest  margins CTs and MRIs. Their state-                                                               
of-the-art  imaging   services  are  offered  to   all  patients,                                                               
regardless of  payer status.  They provide  significant financial                                                               
support to charity  organizations in Alaska. If  the state allows                                                               
a high-margin  only site, like  an MRI or  CT center, to  open on                                                               
every street  corner, bleeding away  the modalities that  pay the                                                               
bills, they  will be forced  to scale back  to the same  level of                                                               
exclusive  or limited  services. They  more than  likely will  be                                                               
forced to  stop offering low-margin  services and  ultimately cap                                                               
the number of  Medicaid and Medicare patients  or not participate                                                               
in either.  In the end, Alaskans  lose. Rather than kill  the CON                                                               
and make  Alaska the Wild  West for health care,  the legislative                                                               
leadership should  look for  ways to strengthen  CON and  make it                                                               
work better.                                                                                                                    
                                                                                                                                
MR. HINGER offered three suggestions  to make the CON statute and                                                               
regulation meaningful.  None of  them would create  monopolies or                                                               
prevent competition.  The state  should require  each certificate                                                               
seeker  to document  how they  demonstrate and  maintain quality.                                                               
Whether  equipment is  old or  new, payers  are paying  the same.                                                               
People  with  CON  should take  all-payer  status,  Medicare  and                                                               
Medicaid as  well. CON does  not limit competition. If  the state                                                               
thinks there is not enough competition  in some areas, all it has                                                               
to do is approve more CONs.                                                                                                     
                                                                                                                                
SENATOR  STEVENS asked  Mr. Hinger  to  please send  a letter  or                                                               
documentation to  the chair  because he would  like to  know more                                                               
about the three suggestions.                                                                                                    
                                                                                                                                
CHAIR   WILSON  replied   that  they   always  encourage   anyone                                                               
testifying to submit written testimony as  well so that it can be                                                               
published for the record.                                                                                                       
                                                                                                                                
2:10:53 PM                                                                                                                    
PATRICK SHIER,  Alaska Membership Representative,  Pacific Health                                                               
Coalition,  Wasilla,  Alaska,  supported   SB  1.  He  said  that                                                               
introducing  more competition  has been  instrumental in  helping                                                               
them. The introduction of BridgeHealth,  in particular, helped to                                                               
begin  unravelling  some  of the  world-class  high  costs.  They                                                               
support the  introduction of more  competition to lower  the cost                                                               
of high-quality care.                                                                                                           
                                                                                                                                
2:12:06 PM                                                                                                                    
MIKE PRAX, representing self, Fairbanks,  Alaska, supported SB 1.                                                               
He said  that like  Mr. Powers,  he has  been following  this for                                                               
about 30  years. They are  always at the  same point. It  is true                                                               
that  hospitals in  communities subsidizing  low margin  services                                                               
with  high margin  services provide  some  community benefits  to                                                               
some people.  But as they heard  earlier from the payers  and the                                                               
gentleman from  Oklahoma, the payers are  going to get out.  If a                                                               
service has  too high  a margin,  they are  finding alternatives.                                                               
That  is,  providing an  opportunity  for  people to  go  outside                                                               
Alaska to  get services. The  CON program has skewed  the market.                                                               
In the  fiscal notes they  see that  it is the  Medicaid services                                                               
that are  going to increase, but  it just creates one  problem on                                                               
top  of  another.  He  supports  repealing  CON  and  introducing                                                               
market-driven forces.  It is a  situation that the  market should                                                               
resolve, rather  than three-minute  testimonies in  a legislative                                                               
hearing.                                                                                                                        
                                                                                                                                
2:13:57 PM                                                                                                                    
JARED  KOSIN, Associate  Administrator,  Mat-Su Regional  Medical                                                               
Center, Palmer,  Alaska, opposed  SB 1.  He said  Mat-Su Regional                                                               
Medical Center  opposes SB 1. The  premise of the bill  calls for                                                               
competition and  free market. The problem  is that this is  not a                                                               
free  market or  fair competition  for hospitals.  As they  heard                                                               
before,  they are  the only  entities  that are  required by  the                                                               
federal  law  EMTALA  to  treat   all  patients  that  come  into                                                               
emergency departments.  Emergency departments are  expensive with                                                               
all the physical overhead, the  equipment, the fact that they are                                                               
open all the  time and the accompanying labor  expenses. They are                                                               
the only ones required by  law to provide that service. Emergency                                                               
departments lose money. Highly  specialized services like imaging                                                               
and surgery  subsidize their  emergency departments  so hospitals                                                               
can exist.  If SB 1  goes into law,  they fear that  several MRIs                                                               
and   ambulatory  surgery   centers,   maybe  even   freestanding                                                               
emergency  departments, will  flood  the market.  They have  been                                                               
told anecdotally by many that in  Texas that a person cannot go a                                                               
city  block without  seeing a  freestanding emergency  department                                                               
trying  to cater  to patients  with  higher cost  of care.  Those                                                               
entities will  certainly have the  luxury of competition  and the                                                               
free market the  committee seeks. They will not  unless the other                                                               
entities are  mandated to be  open 24 hours  a day, seven  days a                                                               
week, 365  days a year, and  see every patient who  walks through                                                               
the door regardless  of payer status. The  committee's pursuit of                                                               
free market is  not authentic. Fix the CON,  update its formulas,                                                               
do  not outright  repeal  it.  They commit  to  working with  the                                                               
legislature   on   practical    solutions.   Until   then,   they                                                               
respectfully oppose SB 1. They  also listened to Senator Begich's                                                               
question  last  week  about  regulations.  If  this  repeal  goes                                                               
through,  the  existing  regulations  will have  to  be  repealed                                                               
because  the statutory  authority that  permitted them  will have                                                               
been revoked.  Therefore, they  cannot see  a way  the department                                                               
can  regulate  with  new  or changed  regulations  unless  a  new                                                               
statute  is put  in place  to authorize  the regulations.  A full                                                               
repeal makes no sense.                                                                                                          
                                                                                                                                
2:16:47 PM                                                                                                                    
DAVID HYMAN,  M.D., representing self, Co-author  of Overcharged:                                                               
Why  Americans  Pay Too  Much  for  Health Care,  Law  Professor,                                                               
Georgetown University, Washington, D.C.,  supported SB 1. He said                                                               
he  looked at  CON laws  when he  worked with  the Federal  Trade                                                               
Commission (FTC) and  Department of Justice (DOJ) and  they did a                                                               
report in 2004 that reached  some conclusions about CON laws. The                                                               
FTC and  DOJ have submitted  comments to  the state of  Alaska in                                                               
2017, 2018, and  2019 that reached same of  the same conclusions.                                                               
One  is that  CON  laws  create barriers  to  entry that  deprive                                                               
consumers of  the benefits of  the health care  competition. They                                                               
need   to  be   realistic   about  the   benefits  of   potential                                                               
competition. That will  not be feasible in some  areas of Alaska,                                                               
but it is in many areas. A  lot of research shows the benefits of                                                               
competition. Another  conclusion is that incumbent  providers can                                                               
take  advantage  of the  CON  process  to protect  their  current                                                               
market  position  and  revenues.  They have  heard  pleadings  on                                                               
behalf of  incumbent providers of services.  Dr. Hyman referenced                                                               
the  Alaska Supreme  Court  case Alaska  Spine  Center v.  Mat-Su                                                               
Valley  Medical  Center  as  a  case  study  of  that.  The  last                                                               
conclusion is that CON has  not achieved its goals. The subsidies                                                               
used to cross-subsidize less profitable  services are obtained by                                                               
overcharging  everyone  else.  Incumbent providers  do  not  want                                                               
market entry  because it makes it  more difficult for them  to do                                                               
that. If they  want to encourage people to  provide certain kinds                                                               
of treatment,  subsidize it directly  rather than  give incumbent                                                               
providers a license to overcharge  some people and offer cut-rate                                                               
pricing to other people.                                                                                                        
                                                                                                                                
2:19:06 PM                                                                                                                    
MONIQUE  MARTIN, Director,  Government  Relations and  Regulatory                                                               
Navigation, Alaska Regional  Hospital, Anchorage, Alaska, opposed                                                               
SB  1. She  said  at this  point there  has  not been  meaningful                                                               
analysis on the  effect of the CON repeal  on Alaska's hospitals.                                                               
They  encourage  the  state  to conduct  a  study  to  understand                                                               
potential impacts  before considering such  a bill. They  need to                                                               
avoid  unintended  negative   consequences  through  the  cherry-                                                               
picking of  patients before they  move forward. They can  do that                                                               
through a  review of  the CON regulatory  process. Repeal  of the                                                               
CON  program could  dramatically increase  Medicaid general  fund                                                               
costs when  the state  is trying to  reduce them.  The governor's                                                               
budget includes over  $700 million in Medicaid  reductions. A lot                                                               
of those reductions  are unallocated, which has created  a lot of                                                               
uncertainty already  in the provider  community. In  2017, Alaska                                                               
Regional went through  the CON process for a  24-bed, acute adult                                                               
psychiatric unit. The  uncertainty at the state  level has caused                                                               
Alaska Regional  to place  that project on  hold until  they have                                                               
more  stability in  the current  health care  delivery system  in                                                               
Alaska. After going through that  process, they know that the CON                                                               
process  could be  improved. DHSS  should move  forward with  the                                                               
review of  the program, starting  with the letter from  ASHNHA on                                                               
opportunities to improve that program.                                                                                          
                                                                                                                                
2:21:05 PM                                                                                                                    
CHAIR WILSON closed public testimony.                                                                                           
                                                                                                                                
CHAIR  WILSON   pointed  out  that  the   committee  packets  had                                                               
information  about Friday's  Alaska Supreme  Court decision  that                                                               
Professor Hyman spoke about. The  case shows that the state's CON                                                               
laws are  complex and difficult.  Money and  two-and-a-half years                                                               
were  spent  trying  to  circumvent processes  and  get  a  clear                                                               
definition   of  regionality   regarding  what   CON  laws   were                                                               
applicable.  The state  incurred  legal costs  because  it was  a                                                               
codefendant.  To avoid  fragmentation and  CON twice,  incumbents                                                               
are able to interject other  entities in the application process.                                                               
One person  at DHSS  decided a  factor and  then reversed  it. It                                                               
caused a  lot of headaches  to all entities involved,  the Alaska                                                               
Spine Center, the Mat-Su Surgery  Center, and the Mat-Su Regional                                                               
Hospital. It was a huge issue  for his district. Obviously, it is                                                               
going to be  appealed, so they will not talk  about the merits of                                                               
the case, but  they are putting the facts  and disclosures within                                                               
the summary that is in the public record.                                                                                       
                                                                                                                                
SENATOR BEGICH  said he  didn't read that  DHSS had  reversed its                                                               
position. In 2016 they said  a CON wasn't necessary, according to                                                               
the summary. He asked when they changed their minds about that.                                                                 
                                                                                                                                
CHAIR  WILSON  replied  that  he   was  talking  about  the  rule                                                               
determining  whether  Wasilla is  included  in  the community  of                                                               
Anchorage. At one time it was and now it is not.                                                                                
                                                                                                                                
SENATOR BEGICH clarified that was sometime before 2016.                                                                         
                                                                                                                                
CHAIR WILSON answered  yes. He noted that  they asked Legislative                                                               
Legal to address Senator Begich's  question, but they do not have                                                               
a response yet.  The idea was that those  regulations would still                                                               
be in  effect after five years  up to the date  of implementation                                                               
under passage of this bill,  which allow the department plenty of                                                               
time to meet  with stakeholders to develop  those regulations and                                                               
what new statutes may be required  in order to start the process.                                                               
As the committee  heard, they have been dealing with  this for 30                                                               
years. It  has been a  long process. They  have over 40  years of                                                               
economic research  addressing the indigent care  and rural health                                                               
care questions. That  is in Tab 2 of the  committee packet. Three                                                               
percent of  hospital care is  charity care required by  EMTALA in                                                               
Alaska. That  is not a huge  percentage. It would not  be hurtful                                                               
for entities to allow other entities  to come in. They have heard                                                               
testimony from the FTC and DOJ  in terms of competition. They are                                                               
not saying  that health care  is not  complex or exactly  a place                                                               
where  the free  market rules.  The  FTC and  DOJ gave  wonderful                                                               
testimony to the state of  Georgia with many empirical references                                                               
on why  competition in health care  is important. That is  in Tab                                                               
3.                                                                                                                              
                                                                                                                                
2:26:24 PM                                                                                                                    
SENATOR  GIESSEL said  she appreciates  his bringing  forward the                                                               
bill.  She was  an observer  at  negotiated rule  making on  CON,                                                               
probably around  2006. She  has said  multiple times  that Alaska                                                               
has the  highest health care costs  in the U.S. The  U.S. has the                                                               
highest health care  costs in the world. She supports  what he is                                                               
advocating,  but, yet,  this alone  will not  reduce the  cost of                                                               
health care in Alaska. They  have lots of unique situations here.                                                               
Probably  the biggest  one  is the  80th  percentile rule,  which                                                               
requires  that  out-of-network  providers  be paid  at  the  80th                                                               
percentile of charges for that service in the geographic area.                                                                  
                                                                                                                                
SENATOR GIESSEL  said she was  interested in the slide  [from the                                                               
March 27  presentation] that had  a map showing the  evolution of                                                               
CON  in America  for 2017.  She appreciated  that it  was current                                                               
information. As she  pursued the 80th percentile  rule, she found                                                               
out that  it is hard  to get  current information on  health care                                                               
costs. That map showed states  with no CON regulations, including                                                               
Idaho  and North  Dakota.  That was  interesting  to her  because                                                               
while pursuing  the 80th percentile  and working with  Lori Wing-                                                               
Heier,  Director of  the Division  of Insurance,  Senator Giessel                                                               
was  interested  in whether  Idaho  and  North Dakota  had  lower                                                               
reimbursement rates than Alaska, which  they do. She will provide                                                               
that  information to  Chair Wilson's  staff. Montana,  which does                                                               
have  CON, had  about the  same reimbursement  rate as  Idaho and                                                               
North  Dakota,  which  don't  have   CON.  Montana's  rates  were                                                               
significantly  lower  than Alaska's.  She  does  support the  CON                                                               
repeal  that the  chair is  advocating. The  point has  been made                                                               
that without something, no regulations  can be written. They have                                                               
to have that  foundation piece to write regulations,  but this is                                                               
only one  piece. The 80th  percentile is a significant  driver of                                                               
health care  costs and  they cannot  address the  80th percentile                                                               
without addressing  balance billing, otherwise known  as surprise                                                               
billing.  She will  provide  that information  to  his staff.  It                                                               
expands the conversation but also informs the conversation.                                                                     
                                                                                                                                
CHAIR WILSON said  that they will try to get  a Legislative Legal                                                               
answer to Senator Begich's question  in a timely manner. He asked                                                               
committee members to bring any amendments to his office.                                                                        
                                                                                                                                
SENATOR  BEGICH   said  that  he   doesn't  have   the  necessary                                                               
experience of  others on the  committee to offer  amendments, but                                                               
there are  four areas that  have arisen during testimony.  One is                                                               
the  regulations. He  appreciated  Chair  Wilson's staff  working                                                               
with him to clarify that so  they could be clear with Legislative                                                               
Legal. The  second area  is about  the accreditation  process for                                                               
surgery  centers. He  didn't know  if there  is an  accreditation                                                               
process or  something else, but  that seemed to be  a concern--to                                                               
ensure quality  care. The third  area was the question  about the                                                               
difference in areas  covered by a CON and areas  not covered by a                                                               
CON. He does  not want to see hospitals  disappear in communities                                                               
that only have one. He didn't  know if something could be done to                                                               
address  that.  The final  question  was  how  much can  be  done                                                               
through regulation  as opposed to  statutory change. He  does not                                                               
know  the  answers.  He  wants  to  affiliate  himself  with  the                                                               
comments   that  Senator   Giessel   made  about   the  need   to                                                               
comprehensively look at health care  to lower the cost. Questions                                                               
for that include  how to build a larger pool  to reduce risk, how                                                               
to look  at the 80th percentile  rule, and how to  get meaningful                                                               
transparency to  drive costs down.  Two people on  opposite sides                                                               
testified  about the  transparency issue,  which Senator  Giessel                                                               
and Representative  Spohnholz took  a lead in  last year.  He was                                                               
encouraged that  the Bridge network  helped drive  provider costs                                                               
down. That  was a shock  to him. He did  not know that.  His jury                                                               
was out when  CON was brought to the committee.  It still is, but                                                               
he understands reasons  for supporting the bill and  why it makes                                                               
sense. He wants  answers to some of these questions  before he is                                                               
fully on  board. That said, the  debate has been good  in getting                                                               
the questions on  the table. He is hopeful that  what they end up                                                               
crafting is  meaningful. He  doesn't know how  he would  go about                                                               
writing any amendments. He has to think about it.                                                                               
                                                                                                                                
CHAIR  WILSON said  if Senator  Begich has  any amendments  or is                                                               
just contemplating some, he could let his office know.                                                                          
                                                                                                                                
SENATOR  BEGICH reiterated  the  question he  asked the  previous                                                               
week about whether any rural  hospitals in Idaho and North Dakota                                                               
had closed.                                                                                                                     
                                                                                                                                
SENATOR  STEVENS said  that he  understood the  process and  that                                                               
invited testimony  is from people who  agree on the topic.  He is                                                               
surprised that  they have not  reached out to  smaller hospitals.                                                               
There  are three  in his  district, Cordova,  Homer, and  Kodiak,                                                               
plus others that were mentioned.  He was sorry that the committee                                                               
did not have an opportunity to  hear from them. He wished that an                                                               
attempt had been  to reach them and have  them testify. Otherwise                                                               
it is left up  to chance and they may not know  this is going on.                                                               
They will  have other  opportunities to testify,  but this  is an                                                               
important  committee dealing  with  this subject.  He would  have                                                               
liked to have heard from more small hospitals.                                                                                  
                                                                                                                                
CHAIR WILSON  said this topic  has been talked upon  for numerous                                                               
years. The topic was part of  a recent ASHNHA conference as well.                                                               
Hospitals that are  members of ASHNHA have the  opportunity to be                                                               
part of this.  They didn't try to  hide it. It was  in an article                                                               
in  the Journal  of  Commerce  and some  newspapers.  It is  hard                                                               
trying to make  sure all stakeholders are  involved. The hospital                                                               
association and  other large hospitals  were notified.  They also                                                               
didn't hear from the larger  Anchorage hospital. They try to make                                                               
sure  the  public is  always  involved,  and everyone  is  always                                                               
welcome to submit  their written comments. As the  bill moves on,                                                               
they will continue to track those.                                                                                              
                                                                                                                                
2:36:52 PM                                                                                                                    
SENATOR  COGHILL said  he supports  the concept.  This is  a good                                                               
start. As  has been  said, this  does not  solve the  health care                                                               
problem in Alaska, but in his view,  it goes a way to do that. He                                                               
hopes hospitals  know they are  trying to solve a  conundrum, not                                                               
destroy hospitals.  Hospitals are  a vital  part of  their health                                                               
care  world.   Hospitals  are  concerned  about   cost  shifting.                                                               
Hospitals bill the highest rate for  those who can pay it. In the                                                               
Finance  Health  and  Social  Services  Subcommittee,  they  were                                                               
talking  about  those   rates  today.  Those  are   part  of  the                                                               
conundrum.  How  do  they  pay  for  services  for  the  indigent                                                               
population  at  a  realistic  level  without  forcing  people  to                                                               
subsidize  those costs.  He is  sympathetic about  that. However,                                                               
two statements get his attention.  One is that people are already                                                               
leaving  the state,  whether it  is through  the state  of Alaska                                                               
health plan  or any  other trust.  He has talked  to some  of the                                                               
local  providers who  say they  need to  support local  hire. The                                                               
trouble is if  it is so high that it  is less expensive somewhere                                                               
else,  chances  are that  people  will  go  there. That  is  true                                                               
whether it  is a driving a  dozer or delivering health  care. And                                                               
the second  statement was  overcharge vs. cut  rate. That  is the                                                               
conundrum. How to  get indigent care that is forced  upon them by                                                               
a federal  rule. They want good  emergency rooms, but if  a bunch                                                               
of ERs  opened and  couldn't make  it, how  long would  they stay                                                               
open. He  is a little  less sympathetic to hospitals  about that.                                                               
In his own  hometown, the hospital is a  community hospital. They                                                               
do become  the place  where the  doors can  close to  health care                                                               
entrants.  They are  small enough  to be  a monopoly  but growing                                                               
enough to  be competitive.  That is  the interesting  balance. By                                                               
removing the  CON, they  would be  saying there  is an  open door                                                               
here. Then the  question becomes whether the  hospital can retain                                                               
a good quality competitive edge.                                                                                                
                                                                                                                                
SENATOR COGHILL said,  "But be aware that we're going  to have to                                                               
talk about  that when it  comes to  Medicaid. And we're  going to                                                               
have to talk about it when it comes  to ER care. We have tried to                                                               
solve that in  a variety of different ways. For  example, we have                                                               
what they call  frequent fliers, who are  drug-using and alcohol-                                                               
using  people  that  we  end  up  taking  care  of.  We've  tried                                                               
everywhere we  can from pick up  programs to places where  we can                                                               
service  them to  help them  get sober,  services for  behavioral                                                               
health. Those are still going to  go on. They are not going away.                                                               
But I  got to  tell you,  up in Fairbanks,  I tip  my hat  to the                                                               
hospital who  has picked up  those services where the  state just                                                               
can't seem to get its feet under it."                                                                                           
                                                                                                                                
SENATOR  COGHILL  said  he  is going  to  support  repealing  the                                                               
Certificate of  Need off  because the process  needs to  be dealt                                                               
with.  That  is  why  he   asked  whether  ASHNHA  had  made  any                                                               
suggestions. He  would also  be talking  to the  department about                                                               
what can  be done better.  He is going  to be supportive  of this                                                               
based on good economic principles.  They must change the way they                                                               
are doing business in Alaska. People  are going to leave. If they                                                               
have to  cross-subsidize indigent care,  then maybe they  are not                                                               
taking care of indigents properly  or holding them accountable or                                                               
helping  them. They  are chasing  the  payers away.  That has  to                                                               
change. He is going to be supportive  of this as a process. He is                                                               
going to  ask the department  about the feedback  from hospitals.                                                               
Generally smaller hospitals  are an arm of  a larger organization                                                               
already in  Alaska. They take the  best payers out of  the larger                                                               
cities and help  the smaller cities. For  example, Providence has                                                               
a hospital  in Valdez. He knows  that without a good  profit base                                                               
in Anchorage, the hospital in  Valdez would probably not make it.                                                               
They have  to face realities. This  is what the governor  has put                                                               
on them--can  they afford what they  are doing. And if  not, how.                                                               
This is  one element that  has to  be laid out  there. Otherwise,                                                               
they won't face the realities of it.                                                                                            
                                                                                                                                
SENATOR  COGHILL asked  about the  [effective] date  of 2024.  He                                                               
clarified  that it  gives  time for  planning,  both in  economic                                                               
terms and for regulation.                                                                                                       
                                                                                                                                
CHAIR WILSON answered that that was the intent.                                                                                 
                                                                                                                                
SENATOR COGHILL  said that they  probably need to  reiterate that                                                               
to practitioners and the department.                                                                                            
                                                                                                                                
CHAIR WILSON replied  that they will ask the  department to share                                                               
any   data  from   the  working   meetings   with  the   hospital                                                               
association.                                                                                                                    
                                                                                                                                
[CHAIR WILSON held CSSB 1(HSS) in committee.]                                                                                   
                                                                                                                                
2:44:07 PM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair  Wilson adjourned  the Senate  Health  and Social  Services                                                               
Standing Committee at 2:44 p.m.                                                                                                 

Document Name Date/Time Subjects
SB 93 LoS 3.29.19.pdf SHSS 4/1/2019 1:30:00 PM
SB 93
SB 1 - Federal Rpt - Reforming Americas Healthcare System Through Choice and Competition - 2018.pdf SHSS 3/27/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 1
SB 1 - John Locke Foundation - Spotlight-468-The-Case-Against-CON-A-law-that-prevents-health-care-innovation.pdf SHSS 3/27/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 1
SB 1 - National Institute for Health Care_Research_Brief_No._4.pdf SHSS 3/27/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 1
SB 1 - Mercatus Center - Do Certificate-of-Need Laws Increase Indigent Care.pdf SHSS 3/27/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 1
SB 1 - News Story - Florida lawmakers lurch ahead with certificate-of-need repeal.pdf SHSS 3/27/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 1
SB 1 - Reforming Americas Healthcare System Through Choice and Competition - NOvember 2018.pdf SHSS 3/27/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 1
SB 1 - Repealing CON - 31-LS0001 A.PDF SHSS 3/27/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 1
SB 1 - US Department of Justice - Competition in Healthcare and Certificates of Need.pdf SHSS 3/27/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 1
SB 1 Fiscal Note DHSS Health Care Services.pdf SHSS 3/27/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 1
SB 1 Repealing Alaska's CON - Sectional Analysis.pdf SHSS 3/27/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 1
Senate Bill 1 - Sponsor Statement.pdf SHSS 3/27/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 1
SB 1 - Work Draft 31-LS0001_M - 3.11.19.pdf SHSS 3/27/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 1
SB 1 - CON Power Point - SHSS 3.27.19.pdf SHSS 3/27/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 1
SB 93 Letters of Support 3.21.19.pdf SHSS 3/25/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 93
SB 93 v A Sectional Analysis.pdf SHSS 3/25/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 93
SHARP-AKJournal-article.pdf SFIN 4/9/2019 9:00:00 AM
SHSS 3/25/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 93
AAC 7. 24 Health and Social Services HCPLRand IP.pdf SHSS 3/25/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 93
SHARP-IRS TAX EXEMPTION.pdf SHSS 3/25/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 93
Final Report to Leg 2018 SHARP III.pdf SFIN 4/9/2019 9:00:00 AM
SHSS 3/25/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 93
SB 93 DHSS Fiscal Note.pdf SHSS 3/25/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 93
SB 93 DCCED fiscal note.pdf SHSS 3/25/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 93
SB093 DHSS Slides.pdf SHSS 3/25/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 93
SB 93 LoS T Hunt MD.pdf SHSS 3/25/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 93
ANTHC SB93 LOS 3-21-19.pdf SHSS 3/25/2019 1:30:00 PM
SHSS 4/1/2019 1:30:00 PM
SB 93
SB 1 MSB Health Flyer.pdf SHSS 4/1/2019 1:30:00 PM
SB 1
SB 1 Ak Spine Clinic CON.pdf SHSS 4/1/2019 1:30:00 PM
SB 1