Legislature(1999 - 2000)
04/18/2000 03:16 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE HEALTH, EDUCATION AND SOCIAL
SERVICES STANDING COMMITTEE
April 18, 2000
3:16 p.m.
MEMBERS PRESENT
Representative Fred Dyson, Chairman
Representative Carl Morgan
Representative Tom Brice
Representative Allen Kemplen
Representative John Coghill
MEMBERS ABSENT
Representative Jim Whitaker
Representative Joe Green
COMMITTEE CALENDAR
HOUSE CONCURRENT RESOLUTION NO. 24
Creating the Alaska Health Care Commission.
- MOVED CSHCR 24(HES) OUT OF COMMITTEE
PREVIOUS ACTION
BILL: HCR 24
SHORT TITLE: ALASKA HEALTH CARE COMMISSION
Jrn-Date Jrn-Page Action
4/14/00 3136 (H) READ THE FIRST TIME - REFERRALS
4/14/00 3136 (H) HES
4/18/00 (H) HES AT 3:00 PM CAPITOL 106
WITNESS REGISTER
WES KELLER, Staff
to Representative Fred Dyson
Alaska State Legislature
Capitol Building, Room 104
Juneau, Alaska 99801
POSITION STATEMENT: Presented HCR 24.
JERRY NEAR
Drawer 448
Soldotna, Alaska 99669
POSITION STATEMENT: Testified on HCR 24.
GARY B. SCHWARTZ, MPH
PO Box 73178
Fairbanks, Alaska 99707
ACTION NARRATIVE: Testified in support of HCR 24.
KAREN PERDUE, Commissioner
Department of Health & Social Services
PO Box 110601
Juneau, Alaska 99811
POSITION STATEMENT: Testified on HCR 24.
TAPE 00-48, SIDE A
Number 0001
CHAIRMAN FRED DYSON called the House Health, Education and Social
Services Standing Committee meeting to order at 3:16 p.m. Members
present at the call to order were Representatives Dyson, Brice,
Kemplen and Coghill. Representative Morgan arrived as the meeting
was in progress.
HCR 24 - ALASKA HEALTH CARE COMMISSION
Number 0083
CHAIRMAN DYSON announced the first order of business as House
Concurrent Resolution No. 24, Creating the Alaska Health Care
Commission.
Number 0155
WES KELLER, Staff to Representative Fred Dyson, Alaska State
Legislature, came forward to present HCR 24. He reminded the
committee that Jerry Near and Gary Schwartz had made a presentation
to this committee and asked for a resolution to form a health care
commission that looks at the overall health care provisions in the
state of Alaska. He said the heart of the bill is on page 3, lines
3-12 which lists what the health care commission is supposed to
accomplish. The commission is supposed to evaluate options
concerning those six items and bring them back to the legislature
and governor and make recommendations in a preliminary report next
January 2001. At that time, it would be reevaluated and go for the
final plan that would be due March 30, 2002.
Number 0283
JERRY NEAR testified via teleconference from Soldotna. He noted
that he was with the original task force that worked on this issue
in 1992 - 1993, and that task force made recommendations to the
legislature then. Since that time, access to health care and the
cost of health insurance have continued to escalate. A private
group formed about a year and a half ago to try to move this thing
along in another fashion. A preliminary document was submitted
last March. The group got concurrence to continue, and it did, but
the group realized it wasn't the only thing that could develop a
plan. Looking at the limitations of a private body, the group
decided to ask the legislature to consider setting up a commission
that would have authority to take on this challenge in earnest to
see if this system can work for everybody better than it is now.
The ranks of the uninsured have increased markedly in Alaska and
nationally.
MR. NEAR has information on a program set up by the federal
government to help fund states to develop programs whereby this
whole issue of health care and access can be addressed.
MR. NEAR noted the 40 percent figure in the bill is a composite
figure that also includes insurance premiums and the retainer that
companies need to have to operate on and the exodus of health care
that goes out of Alaska. The group should see what it could do to
retain more of the health care resources within the state and also
the jobs that are associated with that industry. It is one of the
major (indisc.) industries in the state. Anything that can be
retained should be to make this more efficient.
CHAIRMAN DYSON asked Mr. Near if he had any problems, on page 2,
with the composition of the commission.
MR. NEAR said no, he believes there needs to be expertise in the
broad spectrum of the whole industry. One of the questions is how
to develop the industry without falling into the pockets of the
vested interest. It is structured to bring in a broad band of
players. He submitted a list of people who he would consider
qualified to serve on the commission.
Number 0564
CHAIRMAN DYSON said he is concerned about tactics at this point in
time. There may be an amendment to allow the members to be
eligible for travel and per diem, and he is worried about a fiscal
note killing the bill this late in the session and getting a
Finance Committee referral. He asked Mr. Near for any thoughts on
that.
MR. NEAR said it can be quite a costly endeavor for the private
citizen. He hopes the federal program can help, but that needs to
be applied for.
CHAIRMAN DYSON asked Mr. Near if he had any problems with the list
of six items on page 3 or if he saw anything that should be changed
or added.
MR. NEAR suggested changing "report" to "plan" on page 3, line 2.
On page 3, line 7 (3) he believes that "plans" would be more
definitive than "options." He wasn't sure about number (5) on page
3, line 10. The medical savings accounts have been expanded and
there are some things at the federal level in this whole arena of
health care and insurance. It is a great idea, but it gives the
providers a bit of heartburn because it takes the amount of money
that's out there following all the goods and services and health
care and puts it into a private account so it does withdraw a lot
of capital out of the system. That will be met with mixed review.
CHAIRMAN DYSON said that one probably cuts both ways.
MR. NEAR said he personally feels the medical savings account is a
good idea because it brings the consumer into the equation. Those
monies will be used to pay for what he believes is the most
efficient way of paying medical bills: pay a dollar for a dollar
instead of using the vehicle of insurance which does not pay a
dollar for a dollar because of the operating costs.
MR. NEAR has proposed to a number of employers that they set an
employee expense medical reimbursement account.
Number 0840
CHAIRMAN DYSON asked Mr. Near if inserting "plans and" after
"includes" on page 3, line 2 would be fine.
MR. NEAR noted that "plans" is more definitive and will challenge
the committee to look seriously at what kinds of structures would
be developed and would have a chance of making it work better.
MR. NEAR referred to page 3, line 18, and asked if the authorizing
of temporary support staff would be more appropriate towards the
front of the bill.
CHAIRMAN DYSON said the committee would look at that.
MR. NEAR said somebody from the administration needs to be down
there for a pre-application conference on April 26 if the federal
grant is going to be applied for.
Number 0996
GARY SCHWARTZ testified via teleconference from Fairbanks. He said
he is pleased with what has been done so far. He has no issues
with the language. He agreed with what Mr. Near pointed out: the
staff support is needed early on with the creation of the
commission rather than waiting a year. He is concerned it will
lose its momentum if it's done in that manner. The federal grant
would very well address it. That grant is almost written for the
creation of this commission for the state to undertake the study of
access, multiple programs and uniform payment related to insurance
costs. In terms of the composition of the commission, he is
concerned about the general health care provider industry as well
as the health insurance industry. He would like to see practicing
physicians and some insurance executives, as opposed to a broker,
involved in it. He supports HCR 24.
Number 1117
KAREN PERDUE, Commissioner, Department of Health & Social Services,
came forward to testify. She shared several pages from the Health
Resources and Access Task Force report with the committee. That
task force finished its work in 1993, and it was a very rigorous,
exhaustive process. The task force spent two years with a
full-time staff person and a hefty budget, and the legislators who
were on the task force spent one to two days a month in meetings on
this subject. The task force came up with some recommendations and
two are attached that are similar to option (1) on page 3, line
3-4: ... a single administrative entity to oversee the state's
health care cost containment and access initiatives. This was
probably the pure solution that would have done most to deal with
cost of the uninsured. It was probably the most controversial
recommendation the task force could have made. She noted this was
being made at the time when health care reform had a lot of
national momentum, which was prior to the collapse of the reform
movement after the Clinton plan.
COMMISSIONER PERDUE said while option (1), page 3, line 3, may be
the most efficient way to wring money out of the system, it is also
a very difficult task to create a publicly held trust with
administrative powers to oversee Alaska's health care delivery
system. She pointed out that staff would definitely be needed to
explore this option. She called this area "heavy seas." She
doesn't believe there is currently anything barring employers from
having a privately held trust today with their own money. There
has been some movement toward that, but the key is whoever is
running this system has power over other people's money. It is not
a light task.
COMMISSIONER PERDUE noted that option (3), page 3, line 7, is going
in the opposite direction from where the health care industry is
moving, and this would be a tricky issue to look at. She pointed
those things out to remind the committee that this is a substantial
undertaking. She referred to page 3, line 5, option (2) having to
do with telemedicine and said that is somewhat of a duplicate task
to another group. Senator Ted Stevens asked her to convene a group
of public and private individuals to look at telemedicine
development in Alaska. She chairs the Alaska Telehealth Advisory
Commission and the members are Doug Bruce from Providence Hospital,
the Regulatory Commission of Alaska, Ron Duncan of GCI, Mark
Hamilton of the University of Alaska, Jerome List of the State
Medical Society, a representative from the federal Indian Health
Services, the Chief Executive Officer of Alaska Regional Hospital,
Tom Posey of AT&T Alascom, Paul Sherry of the Tribal Health
Consortium, the head of the Veterans Administration in Alaska and
Representative Gary Davis. This commission is working very hard on
this particular task.
CHAIRMAN DYSON asked Mr. Near if he was comfortable that the Alaska
Telehealth Advisory Commission is doing a reasonable job in
telemedicine and what he has going doesn't get swamped or
duplicated.
MR. NEAR said right now his is shelved because of the resources.
It would not make a lot of sense to have two separate systems
taking care of two different groups, public and private. He is
hoping to have one unified system.
Number 1397
COMMISSIONER PERDUE indicated that the Alaska Telehealth Advisory
Commission created a set of technical standards that allow for
inter-operability between public and private investment. These are
voluntary standards but having representatives from the
telecommunication companies and the Regulatory Commission of Alaska
at the table has helped a great deal in allowing everyone to adopt
these standards. The commission is building a railroad track. If
it agrees on the width of the railroad track, then everybody can
hook on to it. She urged that the committee drop option (2) on
page 3, line 5 in HCR 24.
Number 1425
CHAIRMAN DYSON asked Mr. Near how he felt about that.
MR. NEAR said he had no problem with that.
COMMISSIONER PERDUE said there is one glaring missing group that
she found very useful, and that is the business community. She
doesn't believe this can be planned without inviting employers to
come in and talk about how their money is going to be used.
Employers pay most of the premiums in the private system, and she
definitely recommended that employers be involved. The task force
invited both labor and private business to the table.
COMMISSIONER PERDUE told the committee that she has read the
federal register announcement for the grant. There are ten states
that would receive these grants. The grants are sizeable, but she
warned the committee that ways are being looked at to expand
insurance to low income individuals through Medicaid or SCHIP
[State Children's Health Insurance Plan] or other government
programs. There was a conference that came up with eight major
categories of solutions for dealing with the uninsured population,
and seven of those related to expanding government coverage. She
would expect that a successful application to this grant would have
to include how the state would address that issue. She assumed
that may be addressed in option (6), page 3, line 11.
CHAIRMAN DYSON asked Commissioner Perdue what she thought the
chances would be for Alaska to get a grant.
COMMISSIONER PERDUE said she believed Alaska would have at least a
fighting chance if Senator Stevens endorsed it, and people from
Alaska have been working with Dr. Fox at HRSA [federal Health
Resources and Services Association]. There are ten states that
will receive these funds. Alaska would have to put together a heck
of an application, and it would have to fit with what the federal
government wants to fund.
Number 1570
CHAIRMAN DYSON asked if something like the health commission needs
to be in place in order to be able to apply for the grant.
COMMISSIONER PERDUE answered no.
CHAIRMAN DYSON asked if she is planning on applying for this grant.
COMMISSIONER PERDUE answered that a decision hasn't been made. A
sizeable amount of money was received from the Robert Wood Johnson
Foundation for the last four years. That was used to pull some
information together on market base solutions. There has to be the
political will to take the next step. In the uninsured situation,
there are simplistically three or four ways to go: expand
government coverage, require employers to pay through some kind of
pool or subsidy, bring in even more health care dollars into a big
pool which would be Alaska's problem. A good deal of Alaska's
coverage is being financed by federal sources: Veterans
Administration (VA), military, Coast Guard, Medicare and Indian
Health Service. She reported that those groups have never ever
successfully been brought to the table and said what they are
willing, in terms of health care dollars, to put into Alaska.
Those groups make their referral patterns to their tertiary care
centers like the Pacific Command in Hawaii, or the VA has a whole
other set of referral patterns so it is a gargantuan task to bring
those federal agencies to the table.
CHAIRMAN DYSON asked the commissioner how that would be done.
Number 1556
COMMISSIONER PERDUE said it would take a tremendous amount of joint
effort by the leadership of the legislature, the governor and the
delegation. Every system is trying to create economies and
efficiencies. To every system, efficiency is the referral to its
existing fixed-cost hospitals out of state. There are competing
demands there.
CHAIRMAN DYSON commented that the committee is eager to be helpful
to facilitate that process.
COMMISSIONER PERDUE said she hasn't seen a lot of activity in the
state or national legislature around health care reform in the last
several years. It has been incremental reform as opposed to big
picture reform where everything is restructured. The people who
are frustrated that the uninsured population continues to grow,
want to look at the bigger picture. Once the product is done,
something has to be done with it. This effort would really bring
out some fundamental questions, and then the legislature would have
to decide whether it wanted to deal with those questions.
CHAIRMAN DYSON asked Commissioner Perdue if an employer in Alaska
was put on the commission, which position would she recommend
eliminating.
COMMISSIONER PERDUE answered she didn't know at this point. She
noted that in talking about the health care industry, that is not
just one kind of provider. She indicated that the doctors and
hospitals were fundamental in rounding out the full provider
perspective. It is always a problem trying to squeeze everybody
in.
CHAIRMAN DYSON asked where this bill goes next.
MR. KELLER explained if the bill gets a fiscal note, it will go to
the Finance Committee first. There is only a fiscal note if the
original version is passed. The CS doesn't have a fiscal note
because it doesn't pay per diem or travel.
Number 1832
COMMISSIONER PERDUE summarized that this is a big job. She can't
disagree with Mr. Near on the issue that there hasn't been the
needed work into this, but she would not set this commission up
without adequate staff resources and the adequate amount of support
so people can participate from across the state.
REPRESENTATIVE COGHILL asked if anything developed along these
lines in Alaska would be driven by what happens nationally.
COMMISSIONER PERDUE said some of the national issues don't speak
directly to the issue of the market in Alaska. Alaska is about
five steps behind or ahead of dealing with the issue of managed
care. Alaska has 600,000 people, and that is the size a hospital
in Seattle serves. Alaska has an inefficient health care system,
but that's the way it is. People live in small communities in
Alaska so it is difficult to organize this market in a way to get
a lot of purchase power. There probably are some national
solutions that could be looked at. One issue is what is the tax
treatment of self-employed individuals and their premiums. There
have been a number of movements in Congress to allow self-employed
people to write off their premiums. Other questions include:
Should we create different pools? We have a high risk pool, is it
working? We have small market reform, is it working? Medicare in
Alaska does not pay its full way in Alaska and thus there is a
great amount of work to be done in that area. Those are all
individual payment sources as opposed to the big picture and how
one would redistribute the money?
The committee took an at-ease from 3:53 p.m. to 4:18 p.m.
REPRESENTATIVE KEMPLEN commented that one approach could be to cut
down the scope of this health care commission. He referred to page
3 and suggested keeping the second "further resolved" and the last
two so this health care commission just presents, on January 1,
2001, a preliminary report to the legislature that outlines options
being evaluated; describes an action plan, including a public
participation process and proposes legislation to extend the final
report date and starts it up June 15, 2000. Then the health care
commission's task is a lot narrower than originally proposed.
Number 2058
REPRESENTATIVE KEMPLEN made a motion to adopt the proposed
committee substitute (CS) for HCR 24, version LS1616\D, Lauterbach,
4/15/00, as a work draft. There being no objection, Version D was
before the committee.
Number 2070
REPRESENTATIVE KEMPLEN made a motion to adopt Amendment 1 which
would delete on page 3, lines 5-6. There being no objection,
Amendment 1 was adopted.
Number 2086
REPRESENTATIVE BRICE made a motion to adopt Amendment 2 which would
delete on page 3, lines 7-8.
REPRESENTATIVE COGHILL objected.
A roll call vote was taken. Representatives Brice, Kemplen and
Morgan voted for the adoption of Amendment 2. Representatives
Coghill and Dyson voted against the adoption of Amendment 2.
Representatives Whitaker and Green were absent. Therefore,
Amendment 2 was adopted by a vote of 3-2.
Number 2163
REPRESENTATIVE BRICE made a motion to adopt Amendment 3 which read:
Page 2, line 20
Delete: "and without"
Insert: "but will be eligible for"
CHAIRMAN DYSON asked whether there was any objection. There being
none, Amendment 3 was adopted.
Number 2219
REPRESENTATIVE COGHILL made a motion to adopt Amendment 4 which
read:
Page 1, line 4
Delete: "cannot afford either"
Insert: "have difficulty affording"
REPRESENTATIVE BRICE objected and offered a friendly conceptual
amendment that would maintain "cannot afford" and insert "or have
difficulty affording".
REPRESENTATIVE COGHILL agreed to that change.
CHAIRMAN DYSON asked whether there was any further objection.
There being none, Amendment 4 was adopted.
Number 2300
CHAIRMAN DYSON made a motion to adopt Amendment 5 which would
insert "insurance premiums, and" on page 1, line 8, after the
phrase "40 percent of the". There were no objections, therefore,
Amendment 5 was adopted.
TAPE 00-48, SIDE B
Number 2323
REPRESENTATIVE BRICE made a motion to adopt a conceptual amendment.
He suggested:
Page 3
Delete lines 20-22
Page 3, line 28
Delete: "March 30, 2002"
Insert: "January 8, 2001"
The committee took a brief at-ease at 4:30 p.m. - 4:31 p.m.
REPRESENTATIVE BRICE continued with Amendment 6:
Page 3, line 14
Delete the word "preliminary"
Delete: Page 3, Lines 18-19
Insert: "(3) the commission may as part of its
recommendations request an extension to January 2002."
CHAIRMAN DYSON asked whether there was any objection. There being
none, Amendment 6 was adopted.
CHAIRMAN DYSON made a motion to adopt Amendment 7 which read:
Page 3, line 2
Insert "plans and" after "report that includes"
CHAIRMAN DYSON asked whether there was any objection. There being
none, Amendment 7 was adopted.
REPRESENTATIVE KEMPLEN made a motion to adopt Amendment 8 which
read:
Page 2, line 9
Delete: "the insurance industry"
Insert: "Alaska employers'
CHAIRMAN DYSON asked whether there was any objection. There being
none, Amendment 8 was adopted.
Number 2110
REPRESENTATIVE BRICE made a motion to move CSHCR 24, version
LS1616\D, Lauterbach, 4/15/00, as amended, out of committee with
individual recommendations and fiscal note. There being no
objection, CSHCR 24(HES) moved from the House Health, Education and
Social Services Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Health, Education and Social Services Standing Committee meeting
was adjourned at 4:35 p.m.
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