Legislature(1993 - 1994)

01/27/1994 03:00 PM House HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
           HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES                         
                       STANDING COMMITTEE                                      
                        January 27, 1994                                       
                            3:00 p.m.                                          
                                                                               
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
  Rep. Cynthia Toohey, Co-Chair                                                
  Rep. Con Bunde, Co-Chair                                                     
  Rep. Gary Davis, Vice Chair                                                  
  Rep. Al Vezey                                                                
  Rep. Harley Olberg                                                           
  Rep. Bettye Davis                                                            
  Rep. Tom Brice                                                               
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
  Rep. Pete Kott                                                               
  Rep. Irene Nicholia (Excused)                                                
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
  Presentation:  Critical Strategic Plan for State Health                      
                 Laboratories                                                  
                                                                               
  WITNESS REGISTER                                                             
                                                                               
  DR. PETER NAKAMURA, Director                                                 
  Division of Public Health                                                    
  Department of Health and Social Services                                     
  P.O. Box 110610                                                              
  Juneau, Alaska 99811-0610                                                    
  Phone:  (907) 465-3090                                                       
  Position Statement:  Answered questions                                      
                                                                               
  NEWTON CHASE, Chief of Facilities                                            
  Department of Health and Social Services                                     
  P.O. Box 110650                                                              
  Juneau, Alaska 99801-0650                                                    
  Phone:  (907) 465-3037                                                       
  Position Statement:  Introduced steering committee members                   
                       and answered questions                                  
                                                                               
  LEIF SELLKREGG, Representative                                               
  Heery International                                                          
  621 W. 15th Ave                                                              
  Anchorage, Alaska 99501                                                      
  Phone:  (907) 279-8765                                                       
  Position Statement:  Conducted a presentation and answered                   
                       questions                                               
                                                                               
                                                                               
  MICHAEL PRESS, Representative                                                
  Coopers & Lybrand                                                            
  C/O Coopers & Lybrand                                                        
  130 Avenue of the Americas                                                   
  New York, New York                                                           
  (212) 259-2279                                                               
  Position Statement:  Answered questions                                      
                                                                               
  DR. KATHERINE KELLY, Representative                                          
  Centers for Disease Control                                                  
  3247 S. Flower Rd.                                                           
  Atlanta, Georgia                                                             
  (404) 454-6221                                                               
  Position Statement:  Answered questions                                      
                                                                               
  MARTHA ROBBINS, Representative                                               
  Coopers & Lybrand                                                            
  203 N. LaSalle                                                               
  Chicago, Illinois 60601                                                      
  (312) 701-6422                                                               
  Position Statement:  Answered questions                                      
                                                                               
  MARGARET LOWE, Commissioner                                                  
  Department of Health and Social Services                                     
  P.O. Box 110601                                                              
  Juneau, Alaska 99811-0601                                                    
  Phone:  (907) 464-3030                                                       
  Position Statement:  Discussed need for action on                            
                       recommendations                                         
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 94-05, SIDE A                                                           
  Number 000                                                                   
                                                                               
  CHAIR TOOHEY called the meeting to order at 3:04 p.m. and                    
  asked for a roll call to be taken.  Rep. Kott was not in                     
  attendance and Rep. Nicholia had been excused.  Chair Toohey                 
  stated that the meeting was concerning the consolidation of                  
  Public Health Laboratories.  She opened the meeting for                      
  discussion.                                                                  
                                                                               
  Number 065                                                                   
                                                                               
  DR. PETER NAKAMURA, Director, Division of Public Health,                     
  Department of Health and Social Services (DHSS), stated that                 
  the state of Alaska was at a critical point regarding the                    
  infrastructure for public health for the next 30 years and                   
  the presentation would focus on the strategic laboratory                     
  plan.  He introduced the "critical steering committee" for                   
  the strategic laboratory plan.  Dr. Nakamura referred the                    
  meeting over to Newton Chase.                                                
                                                                               
  Number 161                                                                   
                                                                               
  NEWTON CHASE, Chief of Facilities, Department of Health and                  
  Social Services (DHSS), stated he was also a member of the                   
  steering committee and project manager for DHSS in regards                   
  to the strategic laboratory plan.  For background, he said                   
  that there are three public health labs (in Fairbanks,                       
  Juneau, and Anchorage) that are outmoded facilities.  He                     
  mentioned that a conditions assessment combined with                         
  recommendations from the Center of Disease Control from                      
  Atlanta and the National Institute for Occupation Safety and                 
  Health (NIOSH) was done on the state of conditions of the                    
  three labs.  He stated that as a result of the evaluations                   
  the state labs were found to be in very serious condition in                 
  regards to safety and health to the staff and to the public.                 
  Subsequently, funds for $200,000 were granted to proceed                     
  with a strategic plan based on the recommendations from the                  
  agencies involved in the evaluations.  The three options -                   
  privatization, consolidation, or centralization - were                       
  offered as solutions to the state labs problem.  Mr. Chase                   
  stated that the presentation was the result of the study                     
  undertaken to evaluate the three options.                                    
                                                                               
  Number 293                                                                   
                                                                               
  CHAIR TOOHEY asked when the $200,000 was appropriated and                    
  when the strategic plan study began.                                         
                                                                               
  Number 295                                                                   
                                                                               
  MR. CHASE answered that the appropriation was made in fiscal                 
  1994 and that the strategic study started in October of                      
  1994.                                                                        
                                                                               
  Number 312                                                                   
                                                                               
  (CHAIR TOOHEY stated that Rep. B.Davis and Rep. Brice                        
  arrived at 3:08 p.m. and 3:11 p.m., respectively.)                           
                                                                               
  Number 317                                                                   
                                                                               
  MR. CHASE stated that a final report would be forwarded to                   
  the legislature upon its completion.                                         
                                                                               
  Number 335                                                                   
                                                                               
  REP. BUNDE asked for the approximate date.                                   
                                                                               
  Number 340                                                                   
                                                                               
  MR. CHASE said approximately three weeks.                                    
                                                                               
  Number 356                                                                   
                                                                               
  LEIF SELLKREGG, Representative, Heery International, stated                  
  that he was part of the consulting team selected by the                      
  DHSS.  He introduced other members of the consulting team:                   
  Martha Robbins, Michael Press, Tom Livingston, and Nolan                     
  Watson.  Mr. Sellkregg presented the committee with the                      
  recommendations from the final steering committee meeting,                   
  held a day earlier.                                                          
                                                                               
  (Note:  Mr. Sellkregg referred to charts, graphs, and also                   
  printed text that can be found in Attachment 1.)                             
                                                                               
  MR. SELLKREGG stated that the strategic plan had been                        
  requested to provide specific recommendations regarding the                  
  most cost-effective provision of quality public health                       
  services in Alaska.  The areas of strategies focused on:                     
  operational effectiveness, position of laboratories for                      
  future growth, and aligning operational and fiscal goals.                    
  He stated that great effort was exerted to include the                       
  public in this discussion.                                                   
                                                                               
  MR. SELLKREGG said that their recent studies piggybacked                     
  thirteen previous studies conducted since 1985.  Throughout                  
  those years, he said, the consistent theme has become more                   
  and more urgent.  He stated that the steering committee had                  
  also been asked to address the medical examiner/state morgue                 
  issue.  He continued on to say that a cost analysis had also                 
  been done.                                                                   
                                                                               
  Number 553                                                                   
                                                                               
  CHAIR TOOHEY asked if he had the results, the cost, and the                  
  outcome of the recommendations.                                              
                                                                               
  Number 556                                                                   
                                                                               
  MR. SELLKREGG responded that he did not have the cost                        
  results.                                                                     
  Number 563                                                                   
                                                                               
  MR. CHASE said that to his knowledge the only cost to the                    
  state was the $225,000 that he had talked about.                             
                                                                               
  Number 595                                                                   
                                                                               
  MR. SELLKREGG said that Alaska health labs interacted with                   
  national public health labs.  He said the national health                    
  labs extract data from state health labs to assess the                       
  health of the population's well being and referred to the                    
  process as a core function.  He distinguished public health                  
  from health care by saying that public health deals with                     
  economic, social and cultural well-being of communities, and                 
  health care deals with the individual's well-being.                          
                                                                               
  MR. SELLKREGG stated that recognizing trends, detecting                      
  clusters of infection, recognizing unusual subtypes of                       
  agents, and providing surveillance for resistance were                       
  operations of Alaska public health labs endeavoring to                       
  understand sources and effects of disease.                                   
                                                                               
  MR. SELLKREGG stated the difference between private and                      
  public health labs was that public health labs address                       
  community health risks, while private labs address                           
  individuals and their health risks.                                          
                                                                               
  MR. SELLKREGG described the route specimens take to be                       
  tested in the public health labs.  He said that information                  
  from the specimen is fed directly into epidemiology.  He                     
  also stated that private labs in Alaska do not do large                      
  numbers of tests, and their results are not reported to                      
  epidemiology, therefore, a great deal of information is                      
  lost.                                                                        
                                                                               
  MR. SELLKREGG said the Alaska public health labs face                        
  serious problems; all labs occupy leased space and require                   
  significant expenditures to solve safety and efficiency                      
  problems.  He stated that due to physical building                           
  conditions, Anchorage and Juneau health labs were putting                    
  staff, other tenants of the facilities, and the public at                    
  risk to T.B. and multiple drug resistant strains of T.B.  He                 
  said that both the Juneau and Anchorage health labs were in                  
  office buildings.  He continued to describe the services                     
  offered in Alaska public health labs.  He said there were                    
  currently 37 FTE (full time equivalents) working in the                      
  three lab locations.                                                         
                                                                               
  MR. SELLKREGG stated that, in comparison to three other                      
  states (Arizona, Delaware, and Tennessee) efficiency was                     
  looked at from the standpoint of overall productivity of                     
  staff (administrative and technical).  The overall                           
  productivity of administration was average and technical                     
  productivity was above average in the state of Alaska.                       
                                                                               
  MR. SELLKREGG discussed privatization of public health labs.                 
  He said that Arizona, the most privatized state for public                   
  services, determined as the result of a state study that it                  
  is not appropriate to privatize public health labs.  He                      
  stated that advocacy for public health, who raises concerns                  
  in the public interest and who is alert to solving                           
  previously unseen problems, are difficult concerns to                        
  privatize.  He said that privatization would run the risk of                 
  losing vital information fundamental for epidemiology.  He                   
  said that public health labs out-source to private labs,                     
  citing pap smears, western blood tests, and blood lead                       
  tests.  He said that public health labs are the cutting edge                 
  for disease control and that as solutions to managing                        
  disease are discovered, they inevitably move on and often                    
  leave the testing to the private sector.  He also said that                  
  the practice of fee-for-service reduces state government                     
  financial participation and it allows the public sector to                   
  compete for lab services.                                                    
                                                                               
  MR. SELLKREGG stated that the consolidation option that                      
  would combine the three public health facilities into only                   
  two facilities would provide an opportunity for improving                    
  efficiency in service and in cost.  He stated that to                        
  consolidate it would mean the renovation of the Fairbanks                    
  lab and the combining of Juneau and Anchorage labs into one                  
  brand new facility.                                                          
                                                                               
  Number 921                                                                   
                                                                               
  REP. BUNDE asked if a new facility meant building one from                   
  the ground up.                                                               
                                                                               
  Number 926                                                                   
                                                                               
  MR. SELLKREGG said, "part of the problem that we have today                  
  is that we have labs existing in converted office buildings.                 
  That is really the wrong way to approach putting a public                    
  health lab operation into operation.  It's different than a                  
  private lab, which is shipping many of their more complex                    
  tests out of state to a specialized lab facility and keeping                 
  their drawing services in an office building.  We have a                     
  very high degree of air-handling, isolation, and materials                   
  have to be of a very high specification for the type of                      
  tests that are being done.  You can only do that properly,                   
  efficiently, and probably cost-effectively if you build a                    
  new facility.  If you go to renovate or convert, the numbers                 
  will show you that you spend as much if not more money                       
  trying to convert an office building into a public health                    
  lab than if you were to build it from the ground up."                        
                                                                               
  MR. SELLKREGG said the advantages of consolidation were more                 
  efficient use of equipment, facility space, computers,                       
  office and technical supplies and staff reduction.                           
                                                                               
  MR. SELLKREGG stated that centralization would provide the                   
  greatest opportunity to improve efficiency in service and                    
  cost.  The advantages would be a reduction in FTEs, office                   
  and technical supplies, and most importantly there would be                  
  a centralized lab facility that would meet all regulatory,                   
  biological, fire, and other safety standards.  He said that                  
  was not the case for the existing public health labs.  He                    
  said the state is at high risk, for millions of dollars,                     
  from a potential claim from a staff person, a tenant of an                   
  existing structure, or the public being exposed (to harmful                  
  disease or physical conditions of existing structures).                      
                                                                               
  TAPE 94-05, SIDE B                                                           
  Number 000                                                                   
                                                                               
  CHAIR TOOHEY asked for the combined square footage of the                    
  three facilities.                                                            
                                                                               
  Number 012                                                                   
                                                                               
  MR. SELLKREGG said, after some discussion, that it was                       
  approximately 18,000 square feet.  He went on to say that                    
  the centralization option costs included construction,                       
  equipment, consultants, project administration, and project                  
  contingency, approximately totalling $13.6 million.  He                      
  listed the projected savings over 20 years if the                            
  centralization option were utilized.  He said that in net                    
  savings compared to the status quo, in 20 years the                          
  consolidation option would save $1.9 million and the                         
  centralization option would save $7.7 million.                               
                                                                               
  Number 074                                                                   
                                                                               
  REP. BUNDE said, "and that's a savings on what total                         
  operating costs?"                                                            
                                                                               
  Number 076                                                                   
                                                                               
  MR. SELLKREGG replied that it was "on the total operating                    
  costs, if you were to take your status quo and project it                    
  forward into 1998... if you keep operating in your existing                  
  facilities... you will spend in 1998, these will be the net                  
  savings on that comparison."                                                 
                                                                               
  (Note:  Mr. Sellkregg was pointing to numbers on a chart                     
  contained in Attachment 1.)                                                  
                                                                               
  Number 081                                                                   
                                                                               
  CHAIR TOOHEY said, "conversely, you'd be spending that if                    
  you saved status quo."                                                       
                                                                               
  Number 083                                                                   
                                                                               
  REP. BUNDE said he understood that but asked, "what's it                     
  going to cost to operate the lab to save that much money?"                   
                                                                               
  Number 085                                                                   
                                                                               
  MR. SELLKREGG said $3.9 million would be spent in 1998 on                    
  status quo and referred to his demonstration chart to show                   
  the annual net savings.                                                      
                                                                               
  Number 101                                                                   
                                                                               
  REP. BUNDE said, for clarification, that "you are                            
  anticipating the operating cost of 4.6 and 4.2 (million                      
  dollars) in 1998 dollars."                                                   
                                                                               
  Number 105                                                                   
                                                                               
  MR. SELLKREGG said the total annual cost in 1998 dollars,                    
  including operating and capital costs, would be $4.8 million                 
  for status quo, and $4.6 million for the consolidation                       
  option, and $4.2 for the centralized.  He referred to Mr.                    
  Michael Press to help support those figures.                                 
                                                                               
  Number 124                                                                   
                                                                               
  MICHAEL PRESS, Representative, Coopers & Lybrand, said that,                 
  "in forecasting forward, we use things like the consumer                     
  price index (CPI) forecasts by Wharton and Conametrics, and                  
  we used a medical component for that, as well as a general                   
  component for that.  And, we divided each of the objects up                  
  into two groupings.  A grouping that was most appropriate to                 
  use the medical inflation rate and then another grouping,                    
  which was everything else, for instance, the courier                         
  service; we use just a general CPI forecast for that,                        
  whereas others were in the medical category.  Forecasting                    
  those forward and adding them up in 1998, when it's (we're)                  
  basically saying that we would have the first fully                          
  operating year under any of the scenarios, so we could do an                 
  apples to apples comparison in that year.  We come out with                  
  these numbers for annual cost differentials.  And as far as                  
  the total number here, that is displayed, this has to do                     
  with accumulation of costs over the full span up to the year                 
  2012."                                                                       
                                                                               
  Number 050                                                                   
                                                                               
  MR. SELLKREGG felt that an interesting point was that the                    
  state was going to spend $75,000,000 over the next 20 years                  
  in our public health labs.  He said there are opportunities                  
  to reduce that number and, at the same time, address serious                 
  safety and facility risks.                                                   
                                                                               
  MR. SELLKREGG mentioned other state agencies with laboratory                 
  operations.  He stated that there were two other lab                         
  facilities with compatible lab functions:  the Department of                 
  Environmental Conservation (DEC), which does environmental                   
  testing in Palmer and Juneau; and Public Safety's Crime lab,                 
  which does forensic testing in Anchorage.  He said that                      
  neither of the aforementioned would facilitate biological                    
  testing that takes place in public health labs.  He also                     
  mentioned that the universities had labs for teaching but                    
  not for analysis.                                                            
                                                                               
  Number 073                                                                   
                                                                               
  CHAIR TOOHEY asked if any of the aforementioned labs                         
  volunteered to add on and let the public health labs use                     
  their facilities.                                                            
                                                                               
  Number 077                                                                   
                                                                               
  MR. SELLKREGG said none have said that specifically.  He                     
  stated that some were in serious states of disrepair.  He                    
  again said that for various reasons none of the other state                  
  agencies' health labs were compatible.                                       
                                                                               
  MR. SELLKREGG stated that the state morgue was designed for                  
  a capacity of 70 bodies and it now is projecting a need to                   
  deal with 750 bodies a year, indicating serious health and                   
  safety issues.  He felt the state morgue should co-locate                    
  with the new proposed facility.                                              
                                                                               
  MR. SELLKREGG urged that immediate action should be taken to                 
  address the serious conditions of public health labs.  He                    
  stated that the options have been identified that would save                 
  the state millions of dollars over 20 years, and the final                   
  report would support all the recommendations mentioned.                      
                                                                               
  Number 188                                                                   
                                                                               
  CHAIR TOOHEY asked if there were any questions.                              
                                                                               
  Number 091                                                                   
                                                                               
  REP. VEZEY asked Mr. Sellkregg if population growth or                       
  demand services growth factor into the projected status quo                  
  over 20 years.                                                               
                                                                               
  Number 212                                                                   
                                                                               
  MR. SELLKREGG said they projected two percent per annum,                     
  which he felt was realistic.  He said they did not increase                  
  staff.                                                                       
                                                                               
  Number 223                                                                   
                                                                               
  REP. VEZEY said he noticed that.  Prefacing his next                         
  question by saying he had worked in the agricultural area of                 
  health, Rep. Vezey asked Mr. Sellkregg why one industry                      
  would prefer to go through the public sector and another                     
  would prefer to go through the private sector for testing.                   
                                                                               
  Number 263                                                                   
                                                                               
  MR. SELLKREGG said that no states were found that were                       
  totally privatized.  Almost all states are looking for                       
  privatization opportunities, and wherever possible, specific                 
  tests are going to the private sector where it can be                        
  determined that there are real cost savings associated with                  
  that process.  He said that it does not threaten the core                    
  function of public health labs.  He speculated that the                      
  responsibility of national health could not be delegated to                  
  the private sector; it resides with state government.                        
                                                                               
  Number 304                                                                   
                                                                               
  DR. KATHERINE KELLY, Representative, Center of Disease                       
  Control, Atlanta, Georgia, said she agreed with Mr.                          
  Sellkregg.  She stated that most states are charging their                   
  state government with the responsibility for community                       
  health.  She offered, as an example, that there were persons                 
  within the population who could not afford the type of care                  
  that would provide them and everyone around them protection                  
  from disease.                                                                
                                                                               
  Number 371                                                                   
                                                                               
  CHAIR TOOHEY stated that the outcomes from the testings                      
  would be the charge of the state, not the physical "petri                    
  dish" result.                                                                
                                                                               
  Number 383                                                                   
                                                                               
  REP. VEZEY said, "I couldn't follow, you didn't state, to                    
  the extent of what percent of lab services or public health                  
  laboratory work had been privatized in Arizona or anything                   
  else.  And, I didn't see anywhere in your numbers where you                  
  were talking about current expenditure levels, what portion,                 
  if any, of that was going out to the private sector for                      
  private services.  And so, I couldn't extrapolate into that                  
  into the future.  Could you elaborate?"                                      
                                                                               
  Number 399                                                                   
                                                                               
  MR. SELLKREGG said he did not know what the total volume of                  
  testing by private labs was.  He stated that Smith/Klein (a                  
  private lab) told him they processed 80,000 specimens last                   
  year.  He compared that with a total of 120,000 performed by                 
  the public health labs last year.  He suspected that the                     
  private sector was providing more tests in the state than                    
  the public health labs.                                                      
                                                                               
  Number 451                                                                   
                                                                               
  REP. VEZEY asked Mr. Sellkregg, "where do those reflect in                   
  the numbers that you're showing us about operating the                       
  public health labs?  Are they not in there at all?"                          
  Number 454                                                                   
                                                                               
  MR. SELLKREGG said that they were not, and that the public                   
  health labs were not in competition with private health labs                 
  for testing.                                                                 
                                                                               
  Number 469                                                                   
                                                                               
  REP. VEZEY, for clarification, stated that the numbers that                  
  were being reviewed are strictly the cost of operating the                   
  public health labs and not the total public health labs                      
  services the state was providing or paying for.                              
                                                                               
  Number 475                                                                   
                                                                               
  MR. SELLKREGG disagreed, saying that those numbers were the                  
  total costs for the public health labs services, not the                     
  total costs of all lab services going on in the state.  He                   
  said private labs do not publicize those numbers.                            
                                                                               
  Number 486                                                                   
                                                                               
  REP. VEZEY asked how the state would pay the bill if private                 
  labs did not give numbers.                                                   
                                                                               
  Number 490                                                                   
                                                                               
  DR. NAKAMURA answered by saying that it would be difficult                   
  if not impossible to track the tests being done privately by                 
  request of the public health labs.  He referred to a                         
  community that sent out all their tests to another state.                    
  Tests that showed for hepatitis came back to the community                   
  but never were reported to the public health labs.  It was a                 
  hepatitis epidemic.                                                          
                                                                               
  Number 527                                                                   
                                                                               
  REP. B. DAVIS asked if there were reporting procedures for                   
  those types of test results.                                                 
                                                                               
  Number 532                                                                   
                                                                               
  DR. KELLY stated that there is no legal requirement on a lab                 
  that is outside the jurisdiction of the state to report back                 
  to the state.                                                                
                                                                               
  Number 540                                                                   
                                                                               
  REP. B. DAVIS asked if that information is, indeed, sent                     
  back to the state.                                                           
                                                                               
  Number 545                                                                   
                                                                               
  MR. SELLKREGG said only if requested do they return that                     
  information to the state.                                                    
                                                                               
  Number 547                                                                   
                                                                               
  REP. B. DAVIS, stating her confusion, questioned if the test                 
  done in another state would come back to the state or the                    
  doctor.                                                                      
                                                                               
  Number 552                                                                   
                                                                               
  CHAIR TOOHEY said it would return to the private doctor.                     
  Number 553                                                                   
                                                                               
  REP. B. DAVIS said the private doctor should have the                        
  responsibility to report that to public health.                              
                                                                               
  Number 558                                                                   
                                                                               
  DR. KELLY said that is the way it should happen, but it                      
  rarely does.                                                                 
                                                                               
  Number 559                                                                   
                                                                               
  REP. B. DAVIS asked, if indeed core functions were being                     
  maintained by the public health labs, could the remaining                    
  testing be done by private labs?                                             
                                                                               
  Number 579                                                                   
                                                                               
  MR. SELLKREGG said that there is a difference in the way                     
  that a private lab and a public health lab look at                           
  performing a test.  He said the private lab's job is to come                 
  up with the result as efficiently as possible, citing that                   
  they look for what they are asked to look for, but nothing                   
  more.  The public health labs look for what was asked for                    
  but they also look for other critical diseases that may be                   
  there.  He stated it was the extra effort taken by the                       
  public health labs to protect the population that was                        
  impossible to privatize.                                                     
                                                                               
  Number 603                                                                   
                                                                               
  CHAIR TOOHEY said, "but, if there were checklists on T.B.                    
  (bacillus), then you would check that off.  And that could                   
  also be the function of the private lab, or you would find                   
  another private lab to do it."                                               
                                                                               
  Number 607                                                                   
                                                                               
  MR. SELLKREGG asserted that it would be difficult to create                  
  a document that would articulate carefully enough to the                     
  private sector all the things that they would have to do to                  
  perform a public health lab service.  The challenge of                       
  developing that contractual relationship would be close to                   
  impossible.  He said an example of privatization of a public                 
  service was trash pick-up.  He said that the private sector                  
  would be contracted to pick up three cans, throw them in the                 
  back of a truck and drive off.  He said it was very straight                 
  forward contractual agreement.  But, he felt the checklist                   
  approach did not cover the entire spectrum of services that                  
  public health labs provide.                                                  
                                                                               
  Number 646                                                                   
                                                                               
  MARTHA ROBBINS, Representative, Coopers & Lybrand, said that                 
  the way commercial labs make their money is by providing a                   
  very specific service at the quickest, automated rate.  If                   
  further tests needed to be done on that specimen, additional                 
  fees would be added for each different test.                                 
                                                                               
  Number 681                                                                   
                                                                               
  MR. SELLKREGG said that the state has an active program of                   
  identifying tests that should not be performed within the                    
  public health lab and finding more cost-effective ways of                    
  getting the tests done.                                                      
  Number 701                                                                   
                                                                               
  CHAIR TOOHEY asked if Mr. Sellkregg was finished with the                    
  presentation.                                                                
                                                                               
  Number 709                                                                   
                                                                               
  COMMISSIONER MARGARET LOWE, Commissioner, Department of                      
  Health and Social Services (DHSS), said that she wanted to                   
  call the committee's attention to the urgency of the public                  
  health labs situation, which she felt was the most                           
  "terrifying" to the DHSS.  She said the state was on the                     
  edge of very serious health hazards.  She encouraged                         
  immediate action to address those health problems.                           
                                                                               
  Number 730                                                                   
                                                                               
  REP. B. DAVIS asked if the anticipated full report would                     
  include recommendations to the legislature.                                  
                                                                               
  Number 741                                                                   
                                                                               
  MR. CHASE responded yes.                                                     
                                                                               
  Number 747                                                                   
                                                                               
  REP. BRICE asked what the state's liability would be if in                   
  some type of natural disaster, some airborne diseases, were                  
  to escape into the general population.                                       
                                                                               
  Number 764                                                                   
                                                                               
  DR. NAKAMURA said that if the power went out at a facility                   
  that was working with specimens with T.B., the organisms                     
  would circulate throughout the building, exposing others in                  
  the building.  The liability is there.                                       
                                                                               
  Number 793                                                                   
                                                                               
  CHAIR TOOHEY asked if the military had any shared labs that                  
  the state could use.  She then asked what were the short-                    
  term plans for public health labs.                                           
                                                                               
  Number 803                                                                   
                                                                               
  MR. SELLKREGG said the military does have labs, but they are                 
  not available to the state.  He referred to Nolan Watson to                  
  answer questions about short-term plans.                                     
                                                                               
  Number 834                                                                   
                                                                               
  NOLAN WATSON, Representative, McLellan & Copenhagen,                         
  Seattle, Washington, said that an office building that has                   
  been converted into a public health lab cannot respond to                    
  modern technical requirements.  He said a prioritized report                 
  would list the short-term goals.                                             
                                                                               
  Number 876                                                                   
                                                                               
  REP. BRICE stated that he not only had concerns for the                      
  general public at risk from health labs in poor states of                    
  repair, but he was also concerned for the employees working                  
  in public health labs.  He suggested that it may be a cost                   
  saving measure to update and/or build new facilities than to                 
  undergo costly liable suits and then be ordered to make the                  
  proposed changes as well.                                                    
                                                                               
  Number 896                                                                   
                                                                               
  MR. SELLKREGG mentioned, "that we've had discussions with                    
  risk management.  We are trying to help the state become                     
  aware of what it means to have a staff person contract T.B.                  
  through the work place, and what dollar number (exposure),                   
  and we're not in any way inflating numbers when we talk in                   
  terms of millions."                                                          
                                                                               
  Number 904                                                                   
                                                                               
  CHAIR TOOHEY said that one could get T.B. down on Fourth                     
  Avenue in Anchorage or in your neighborhood.                                 
                                                                               
  Number 906                                                                   
                                                                               
  REP. BRICE indicated that there was a difference between                     
  contracting T.B. on Fourth Avenue than contracting it the                    
  work place.                                                                  
                                                                               
  Number 909                                                                   
                                                                               
  CHAIR TOOHEY addressed Rep. Brice's comment by stating that                  
  people who work in labs take a somewhat inherent risk to                     
  exposure.                                                                    
                                                                               
  Number 914                                                                   
                                                                               
  MR. PRESS said that because the state facilities are below                   
  standard, there would be great legal difficulty in defending                 
  the state in the cases of accidental exposure.                               
                                                                               
  Number 922                                                                   
                                                                               
  CHAIR TOOHEY said, "let me state, right now, that if that is                 
  the case, that I will recommend that the state labs be shut,                 
  right now!  If they are in such bad condition that they are                  
  damaging the workers, then we will put out the word and we                   
  will close the state labs.  And we will privatize,                           
  privatize, until those labs are brought up to task.  Because                 
  I cannot see that if those workers are in that much danger,                  
  that they should remain in the work place."                                  
                                                                               
  Number 931                                                                   
                                                                               
  REP. B. DAVIS remarked that, as she understood Mr. Press, it                 
  was more the possibility than inevitability for those health                 
  risks to become reality due to poor conditions at public                     
  health labs.                                                                 
                                                                               
  Number 937                                                                   
                                                                               
  REP. VEZEY asked about the liability of the public school                    
  system in regards to approximately two dozen cases of                        
  exposure to T.B. in the Fairbanks/North Shore Borough School                 
  District.                                                                    
                                                                               
  Number 947                                                                   
                                                                               
  MR. CHASE said that if a person is working with T.B. in a                    
  lab situation, liability of the state would be easier to                     
  prove.  But, if a person who works, or attends, in the                       
  school system were to contract T.B., it would be difficult                   
  to say where it was contracted.                                              
  Number 960                                                                   
                                                                               
  CHAIR TOOHEY said she had much faith in Commissioner Lowe                    
  and Dr. Nakamura that if they felt there was a health hazard                 
  in a public health lab, they would immediately address the                   
  problem.                                                                     
                                                                               
  Number 971                                                                   
                                                                               
  DR. KELLY asserted that lab managers and DHSS have done                      
  everything possible to ensure employee protection.                           
                                                                               
  TAPE 94-06, SIDE A                                                           
  Number 000                                                                   
                                                                               
  MR. CHASE reiterated that the issues brought up by the                       
  committee will be addressed in the upcoming final report.                    
                                                                               
  Number 016                                                                   
                                                                               
  CHAIR TOOHEY thanked all those present.                                      
                                                                               
  Seeing no further business before the committee, CHAIR                       
  TOOHEY adjourned the meeting at 4:25 p.m.                                    

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