01/31/2008 03:00 PM House HEALTH, EDUCATION & SOCIAL SERVICES
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| HB337 | |
| Adjourn |
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| += | HB 337 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE
January 31, 2008
3:01 p.m.
MEMBERS PRESENT
Representative Peggy Wilson, Chair
Representative Bob Roses, Vice Chair
Representative Anna Fairclough
Representative Wes Keller
Representative Paul Seaton
Representative Sharon Cissna
Representative Berta Gardner
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 337
"An Act establishing the Alaska Health Care Commission and the
Alaska health care information office; relating to health care
planning and information; repealing the certificate of need
program for certain health care facilities and relating to the
repeal; annulling certain regulations required for
implementation of the certificate of need program for certain
health care facilities; and providing for an effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 337
SHORT TITLE: HEALTH CARE: PLAN/COMMISSION/FACILITIES
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/22/08 (H) READ THE FIRST TIME - REFERRALS
01/22/08 (H) HES, FIN
01/24/08 (H) HES AT 3:00 PM CAPITOL 106
01/24/08 (H) Heard & Held
01/24/08 (H) MINUTE(HES)
01/31/08 (H) HES AT 3:00 PM CAPITOL 106
WITNESS REGISTER
KARLEEN JACKSON, Commissioner
Department of Health & Social Services (DHSS)
Juneau, Alaska
POSITION STATEMENT: Introduced Committee Substitute for HB 337.
JAY BUTLER, M. D.; Chief Medical Officer
Office of the Commissioner
Department of Health & Social Services (DHSS)
Anchorage, Alaska
POSITION STATEMENT: Participated in the introduction of
Committee Substitute for HB 337.
SHAWN MORROW, Chief Executive Officer
Bartlett Regional Hospital
Juneau, Alaska
POSITION STATEMENT: Testified during the hearing on HB 337.
JOHN COTTER, Pharmacy Director
Fairbanks Memorial Hospital
Fairbanks, Alaska
POSITION STATEMENT: Testified during the hearing on HB 337.
MARY RAYMOND
Homer, Alaska
POSITION STATEMENT: Testified during the hearing on HB 337.
JAMES SHILL, Chief Executive Officer
North Star Behavioral Health System
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 337.
BRUCE JAYNE, Representative
Alaska Surgery Center
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HB 337.
SUSAN MCLEAN, Director of Surgical Services
Fairbanks Memorial Hospital
Fairbanks, Alaska
POSITION STATEMENT: Speaking as a citizen and as the Director
of Surgical Services at Fairbanks Memorial Hospital, testified
during the hearing on HB 337.
RYAN SMITH, Chief Executive Officer
Central Peninsula General Hospital (CPGH)
Soldotna, Alaska
POSITION STATEMENT: Testified in opposition to HB 337.
JOE MILLER, Assistant Chief Attorney
Litigation I Section
Antitrust Division
U.S. Department of Justice
Washington, D. C.
POSITION STATEMENT: Testified during the hearing on HB 337.
STEPHEN SUTLEY, Physician
Fairbanks, Alaska
POSITION STATEMENT: Testified during the hearing on HB 337.
ROBERT JAMES CIMASI, President
Health Capital Consultants
St. Louis, Missouri
POSITION STATEMENT: Testified during the hearing on HB 337.
JENNIFER HOUSE, Comptroller
Fairbanks Memorial Hospital and Denali Center
Fairbanks, Alaska
POSITION STATEMENT: Testified during the hearing on HB 337.
NORMAN STEPHENS, Chief Executive Officer
Mat-Su Regional Medical Center
Palmer, Alaska
POSITION STATEMENT: Testified during the hearing on HB 337.
ACTION NARRATIVE
CHAIR PEGGY WILSON called the House Health, Education and Social
Services Standing Committee meeting to order at 3:01:08 PM.
Representatives Keller, Fairclough, Seaton, Gardner, Roses, and
Wilson were present at the call to order. Representative Cissna
arrived as the meeting was in progress.
HB 337-HEALTH CARE: PLAN/COMMISSION/FACILITIES
3:01:31 PM
CHAIR WILSON announced that the only order of business would be
HOUSE BILL NO. 337, "An Act establishing the Alaska Health Care
Commission and the Alaska health care information office;
relating to health care planning and information; repealing the
certificate of need program for certain health care facilities
and relating to the repeal; annulling certain regulations
required for implementation of the certificate of need program
for certain health care facilities; and providing for an
effective date."
3:02:24 PM
REPRESENTATIVE GARDNER moved that the committee adopt proposed
committee substitute (CS) for HB 337, Version 25-GH2050\E,
Mischel, 1/30/08, as the working document. Hearing no
objection, Version E was before the committee.
3:04:01 PM
KARLEEN JACKSON, Commissioner, Department of Health & Social
Services (DHSS), introduced the committee substitute (CS). She
stated that the first change to the bill addresses the
composition of the health care commission on page 3, line 22.
The number of public members of the commission has been
increased from three to six, and the ex-officio member from the
governor's office has been deleted. In addition, the ex-officio
status of the representatives from the House and Senate has been
removed; this change has caused some concern from the Department
of Law (DOL).
3:05:31 PM
CHAIR WILSON relayed advice that she had received from the DOL
indicating that, when representatives are in an advisory role,
representation from the House and Senate on the council is
acceptable.
3:07:01 PM
COMMISSIONER JACKSON referred to page 6, line 12 through 26,
and opined that the changes that have been made direct the focus
of the health care information database to: access to health
care; cost of health care; and quality of health care.
3:08:00 PM
REPRESENTATIVE SEATON asked whether the reporting requirements
on page 6, line 16, will create a huge matrix of reported fees
from insurance providers. He suggested that the DHSS should
only report the costs paid by the primary insurance providers
from the previous year. The consumer is only interested in the
negotiated prices that the largest insurer is paying for
services, he opined.
3:09:53 PM
JAY BUTLER, M. D.; Chief Medical Officer, Office of the
Commissioner, advised that there is a lot of information being
requested that consumers may not want, or that is not available,
given the resources needed to gather these details.
3:11:13 PM
REPRESENTATIVE SEATON observed that the purpose of providing the
information is so that consumers can make choices, and
consumers will be looking for data on providers that they deal
with most often. However, the wording in the bill seems to ask
for hospitals to provide costs for every procedure, and
reimbursement allowances from every provider. Representative
Seaton asked the sponsor to review the validity of this
requirement.
3:12:29 PM
REPRESENTATIVE GARDNER expressed her understanding that the
function of the database is that consumers can identify the
prices and costs in their area so that they can decide where to
fill a prescription or have a treatment. She asked whether the
negotiated price for all insurers is helpful, when in fact, the
consumer can evaluate and compare the list prices. The
inclusion of negotiated prices will be burdensome and may be a
breach of confidentiality, she opined.
3:13:48 PM
DR. BUTLER agreed. He added that the web site needs to be
relatively simple to be useful, and should only include what
people really need.
3:14:14 PM
REPRESENTATIVE GARDNER stated that she did not need to know the
cost of workman's compensation. She asked Dr. Butler to explain
"cash price and negotiated price" and "available hospital
ratings of infection and mortality."
3:14:54 PM
DR. BUTLER responded that hospital infection rates are not
currently reported in Alaska and to do so would require creating
a surveillance and reporting system.
3:15:34 PM
REPRESENTATIVE GARDNER observed that, if this information is not
currently reported, the requirements of the bill to collect the
information will be a cost to hospitals.
3:15:57 PM
CHAIR WILSON opined that hospitals keep these records; however,
hospital administrators will not be happy to make this
information public.
3:16:33 PM
REPRESENTATIVE ROSES asked whether the states with health
information web sites have seen decreasing medical costs.
DR. BUTLER said that he was not aware of published results that
connect the web sites to lower medical costs. He will research
this question.
3:17:39 PM
REPRESENTATIVE ROSES assumed that the posting of prices on the
web site should make costs more competitive. The rational is
patient choice and this is the side effect. On the other hand,
a large self-insured company is in the position to negotiate
according to its size and get a better rate than may be
available to a smaller insurer. This difference in rate could
be confusing to consumers who may not understand the comparison
of apples to oranges. He cautioned that there may be
consequences to insurance providers that will result in the
elimination of negotiated rates, which will cause all prices to
go up.
3:21:05 PM
REPRESENTATIVE KELLER shared that negotiated prices to insurers
can be extremely low.
3:21:19 PM
CHAIR WILSON recalled last summer's testimony.
3:21:40 PM
REPRESENTATIVE ROSES related his personal experience negotiating
for a large health trust.
3:22:35 PM
COMMISSIONER JACKSON cautioned against writing too much detail
in the statute and re-stated that the purpose of the bill is to
lower costs and provide transparency for consumers.
3:22:55 PM
CHAIR WILSON expressed her concern about the requirement to
update prices annually. She suggested that price changes should
be posted monthly, if possible.
3:24:09 PM
DR. BUTLER opined that it is a challenge to see how data comes
and from where it comes. He explained that many of the existing
web sites post claims data that is derived from what has been
charged for past procedures. The data is not a master price
list from a hospital.
3:25:23 PM
REPRESENTATIVE CISSNA recommended that the DHSS talk with United
Way in Anchorage for information on how to collect data. United
Way has been collecting data for the 211 information phone line
and there may similarities in the process, in fact, some of the
same information may be applicable to the web site.
3:26:12 PM
COMMISSIONER JACKSON turned to the section of the bill regarding
Certificates of Need (CON). She reminded the committee that the
original bill repealed the CON program; however, the CS does not
repeal the CON for nursing homes, residential psychiatric
treatment centers, and for critical access hospitals. The
language in the CS will need to be corrected to refer to
"communities that have critical access hospitals." She
emphasized that the CS incorporates the exceptions, rather than
the delayed repeal that was previously considered.
3:27:40 PM
REPRESENTATIVE ROSES stated his philosophical problem with
charging a committee to search for solutions and compromises,
and then ignoring its work. He opined that the industry needs
to come up with a compromise, not the House Health, Education
and Social Services Standing Committee. He said that well
meaning people worked very hard, and if the DHSS can not accept
some of the process or results, the committee can be re-convened
for further work. Representative Roses expressed his reluctance
to support the bill in its present form.
3:31:04 PM
REPRESENTATIVE GARDNER noted her same feelings about the health
care task force that issued many recommendations; the
legislature and the DHSS have not begun to fully examine its
findings, yet this legislation forms a new commission.
3:31:44 PM
CHAIR WILSON reminded the committee that recommendations from
the task force are available for each member to review.
3:32:25 PM
REPRESENTATIVE CISSNA related her search for the legislative
history on this subject. She offered a report from Legislative
Legal and Research Services, Legislative Affairs Agency, that
contains information on the state's past efforts from 1999, and
also contains analysis of the work done by the task force this
summer.
3:34:31 PM
COMMISSIONER JACKSON acknowledged that the state lacks an
ongoing health planning unit. The task force recommendations
were presented to the governor, and this bill contains
recommendations from the negotiated rule making committee. She
pointed out that the work of the negotiated rule making
committee has not been lost, even though there was not unanimity
by the members.
3:36:23 PM
REPRESENTATIVE GARDNER called the committee's attention to page
5, line 30, and asked whether the language should say "health
care services or health care facilities." In addition, on page
7, beginning at line 15, the bill states the consequence of a
health care facility's failure to report the information
requested by the DHSS. She asked whether this is the entire
consequence for failure.
COMMISSIONER JACKSON answered yes to both questions.
3:38:01 PM
REPRESENTATIVE ROSES asked whether "an adverse action taken,"
indicated on page 7, line 24, is the correct intent. He pointed
out that the mere filing of a lawsuit is considered an adverse
action, whether an entity is subsequently found guilty or
innocent.
COMMISSIONER JACKSON assured the committee that she will get
clarity on this issue.
3:41:27 PM
SHAWN MORROW, Chief Executive Officer, Bartlett Regional
Hospital, stated that he was a member of the negotiated rule
making committee and that 90 percent of the participants said
that the CON should not be repealed, especially for communities
of less than 60,000 residents. His related his experience in
Oklahoma, which does not have a current CON law, and said that
13 hospitals closed during the time period from 1992 to 2005.
He cited the proliferation of specialty hospitals, ambulatory
surgery centers, and imaging centers that caused the financial
decline of hospitals in smaller communities. The hospitals
suffered from the loss of higher priced services that previously
funded emergency and indigent care. Mr. Morrow concluded that
the CON program should not be repealed.
3:43:35 PM
REPRESENTATIVE ROSES asked for the composition of the negotiated
rule making team.
MR. MORROW said that members included hospital administrators,
investors, and physicians. He estimated that 60 percent of the
members were affiliated with hospitals.
3:44:27 PM
REPRESENTATIVE ROSES further asked whether a private provider
would have felt that the committee was balanced and fair.
MR. MORROW said yes. He added that there was a lot of
compromise and negotiation.
3:45:24 PM
JOHN COTTER, Pharmacy Director, Fairbanks Memorial Hospital,
stated that he does not want the CON repealed and believes that
CON regulation provides consistent health care to the community.
Allowing clinics to skim off the top takes away the funding that
the hospital needs to provide ancillary services to those who
can not afford to pay. He warned that Medicare patients will
not be accepted by the clinics and will require services at the
hospital.
3:47:04 PM
REPRESENTATIVE FAIRCLOUGH asked for Mr. Cotter's opinion of the
component of the bill that allows for the posting of
pharmaceutical costs on the state web site.
MR. COTTER opined that it would be easy for him to provide the
prices of drugs from a list. However, posting contracts with
the different payers would be extremely difficult.
3:48:09 PM
REPRESENTATIVE ROSES asked for Fairbanks Memorial Hospital's
write-off for non collectibles from last year.
MR. COTTER said he would provide that amount.
3:48:43 PM
MARY RAYMOND of Homer expressed her concern about the lack of
affordable health care. She appreciated the serious
consideration of the problem by the legislature and encouraged
the committee to review her written testimony.
3:50:45 PM
JAMES SHILL, Chief Executive Officer, North Star Behavioral
Health System, informed the committee that North Star Behavioral
Health System provides psychiatric acute care hospitalization
and residential treatment to children and adolescents. He
stated his opposition to the bill and the committee substitute
(CS). Even though residential psychiatric treatment centers are
an exception in the CS, psychiatric hospitals are not. In
Alaska, the mental health community has agreed that the state
needs a balanced approach for the delivery of mental health
care. Mr. Shill pointed out that there has been a 100 percent
reduction in the number of children placed out-of state for
treatment. His experience has been at every level of mental
health care in Alaska and he asked that the plan for balanced
care not be removed. He was also a member of the negotiated
rule making committee and concluded that consensus was reached,
and that the CON is a worthwhile program to prevent over
saturation of unneeded facilities in mental health and all areas
of health.
3:54:06 PM
REPRESENTATIVE FAIRCLOUGH asked whether Mr. Shill was also
opposed to the other components of the bill.
MR. SHILL said that he could not comment.
3:54:43 PM
REPRESENTATIVE SEATON asked which facilities are not protected
by the bill.
MR. SHILL responded that the CS does not protect psychiatric
hospitalization.
3:55:48 PM
BRUCE JAYNE, Representative, Alaska Surgery Center, stated that
he was a member of the negotiated rule making committee and
concurs with Mr. Morrow's testimony. He stated that he
represents 26 physicians whose patients are 30 percent
governmental payers, and who come from all areas of the state.
He opined that many strip mall centers do not always provide the
regulation that is needed, resulting in substandard care. Mr.
Jayne acknowledged that CON laws may need modification; however,
the CON program serves a gate keeping function. He concluded
that one problem is the nationwide shortage of nurses, and this
shortage drives up the cost of health care.
3:59:11 PM
SUSAN MCLEAN, Director of Surgical Services, Fairbanks Memorial
Hospital, stated that she was speaking as a citizen and as the
Director of Surgical Services at Fairbanks Memorial Hospital.
She expressed her opposition to the repeal of the CON and noted
the value of putting the principal parties together to work on
community solutions. She urged the committee to review the work
of the negotiated rulemaking committee as it is a thoughtful
process that looks out for the best interest of everybody
involved.
4:00:51 PM
RYAN SMITH, Chief Executive Officer, Central Peninsula General
Hospital (CPGH), expressed his opposition to the bill and the
repeal of the CON program. He stated that Central Peninsula
General Hospital (CPGH) is a sole provider community provider,
not a critical access hospital, and the CPGH risks financial
instability and irreparable harm if the state does not ensure
that there is a need for more health care infrastructure before
it is introduced into a community. He related that residents
have approved a bond project for expansion of the hospital and
have supported the hospital with their taxes. As a member of
the certificate of need negotiated regulations committee, he
emphasized that the committee voted 16 to 2 that the CON not be
fully eliminated. Furthermore, there was agreement on the
imaging issues that would address lingering litigation. Mr.
Smith encouraged the committee to eliminate Sec. 2 and Sec. 3
of HB 337 and to consider HB 345 instead. He provided a
breakdown of the members of the negotiated regulations
committee, and in answer to a previous question, said that CPGH
provides $8.6 million in charity and bad debt write-off
annually.
4:04:20 PM
CHAIR WILSON asked for the population.
MR. SMITH answered that there are approximately 35,000 residents
living in the service area of CPGH.
4:04:55 PM
REPRESENTATIVE ROSES asked why the negotiated regulations
committee could not address all of the pending litigation.
MR. SMITH advised that the majority of the remaining lawsuits
were related to imaging and the committee drafted language that
would have eliminated the appeals associated with imaging. He
stated that that language was in HB 345.
4:06:13 PM
REPRESENTATIVE GARDNER asked Mr. Smith to explain his objection
to the manner of the introduction of the legislation.
MR. SMITH explained that he was surprised when legislation to
repeal the CON program was introduced after the committee had
spent five days in Anchorage working on their recommendations.
4:07:21 PM
REPRESENTATIVE FAIRCLOUGH asked Mr. Smith to explain why the
state should spend money and human resources in an attempt to
referee what some believe should be a competitive market. In
fact, the recommendations from the negotiated rule making
committee are very cumbersome and may draw additional
litigation.
MR. SMITH stated that, if the recommendations from the committee
were incomplete, the committee should be allowed to continue to
work together and resolve the issue.
4:09:21 PM
REPRESENTATIVE FAIRCLOUGH related that, when she was informed of
the state's decision to eliminate the CON, "my response was not
pleasant." She further explained that she has also questioned
the state's estimate of the cost of the future liability and
asked whether there was anyone who could help clarify this
estimate.
4:10:12 PM
REPRESENTATIVE GARDNER asked whether Mr. Smith believes that
HB 345 covers the suggestions of the negotiated rule making
committee.
MR. SMITH said yes.
4:10:50 PM
CHAIR WILSON reminded the committee to not talk about other
bills.
4:11:02 PM
JOE MILLER, Assistant Chief Attorney, Litigation I Section,
Antitrust Division, stated that he was speaking on behalf of the
antitrust division as part of its ongoing competition advocacy
initiative to promote the benefits of competitive markets to
state legislatures, Congressional bodies, and regulatory bodies.
His division also advises federal agencies on rule making and
policy matters. Mr. Miller opined that CON laws are anti-
competitive; however, he said that he will not take a position
on the bill. He asked the committee to review his written
remarks and explained that the underlying principle is that
market forces improve quality and lower costs of health care
services; in fact, government intervention can undermine market
forces to the detriment of consumer welfare. Mr. Miller
continued to explain that CON laws are designed to impede the
proper functioning of the market process. One argument of CON
proponents is that hospitals need this protection so that they
can continue to subsidize uncompensated care. He stressed that
this goal needs to be addressed without using CON laws as a
funding mechanism. Furthermore, CON laws hurt consumers who
would benefit from choosing lower priced care, impose costs
without evidence, and slow hospitals from improving services.
4:15:00 PM
REPRESENTATIVE ROSES asked whether Mr. Miller was aware of the
compromises reached by the working group.
MR. MILLER said no.
4:15:30 PM
REPRESENTATIVE ROSES expressed his interest in Mr. Miller's
opinion as to whether the compromises mitigated some of his
concerns about the lack of free market competition.
MR. MILLER stated that he would review the information.
4:15:55 PM
REPRESENTATIVE GARDNER asked whether health care really is a
free market industry when hospitals are required to provide care
without compensation.
MR. MILLER agreed; however, the point is whether CON laws are
justified in the cost that they impose to provide that care.
The evidence is that the goal of providing charity is not
undermined by new entry.
4:17:44 PM
REPRESENTATIVE GARDNER referred to studies of the empirical
evidence that compares apples to oranges. She asked for any
further evidence that Mr. Miller could provide.
4:18:23 PM
REPRESENTATIVE ROSES assumed that Mr. Miller would support the
other components of the bill.
MR. MILLER said that he is not authorized to talk about
particular legislation.
4:19:31 PM
REPRESENTATIVE ROSES referred to earlier testimony about 13
smaller hospitals that were closed in Oklahoma, and asked
whether Mr. Miller had a response.
MR. MILLER pointed out the need to look at each instance to
determine the relationship between the repeal of a law and the
failure of a hospital. He said that he did not have any
information on the situation, or the impact on consumers.
4:20:57 PM
STEPHEN SUTLEY, Physician, informed the committee that he is a
private practitioner. He expressed his belief in the common
goal to ensure and improve patient access to medical care and to
lower the costs of medical care. A segment of medical patients
can benefit from a surgery out-patient center; however, this
service is not open to patients in Fairbanks, due to the CON
program. Some patients cannot afford the hospital and end up in
the emergency room. He read from a report that said that
entrepreneurs and innovators are developing new ways to deliver
health care in a more convenient, high quality, and less costly
manner. Great breakthroughs and discoveries in health care are
expected over the next 25 years but, unfortunately, bureaucratic
relics will stand in the way. Dr. Sutley stated his support of
the anti-trust issue as described in the testimony of Mr.
Miller.
4:25:09 PM
CHAIR WILSON asked for the population of Fairbanks.
DR. SUTLEY said that Fairbanks, North Star Borough, and the
outlying area have a population of 100,000 residents.
4:25:35 PM
REPRESENTATIVE ROSES asked whether Dr. Sutley was aware of the
compromises recommended by the committee.
DR. SUTLEY said that he was not aware of the recommendations.
REPRESENTATIVE ROSES stated his interest in Dr. Sutley's
opinion.
4:26:43 PM
ROBERT JAMES CIMASI, President, Health Capital Consultants,
stated that his company studies this issue nationwide and has a
significant background in aspects of delivery systems in Alaska,
including primary research on utilization demand, challenges of
the geographic proximately to service, and physician manpower
and supply. In addition, his company has been conducting
intense research into certificate of need health policy that
culminated into the publication of a source handbook in 2005.
He referred to his written testimony that cites policy and case
law on this subject. Mr. Cimasi explained that CON policy was
imposed on the states by the federal government in the 1970's
because health care was paid for on a cost plus basis. In the
1980's, the federal government developed the prospective payment
system and providers were told in advance what would be paid for
procedures. This change eliminated the need for the CON program
to reduce costs; in fact, evidence shows that CON laws raise
costs. He opined that it is a failed health policy that has
been renounced by the federal government and by most of the
established health policy research community. In answer to a
question, he stated that there is no statistical valid evidence
that in Oklahoma, or any other state, there is a causation link
between the repeal of CON law and the closure of any health care
facility.
4:32:02 PM
CHAIR WILSON asked for proof.
4:32:22 PM
MR. CIMASI stated that his company has addressed this issue
through its ongoing research. In addition to preventing
innovation, CON legislation is anti-physician. He offered that
there are other ways, currently in use by federal and state
governments, to protect community hospitals.
4:33:39 PM
CHAIR WILSON observed that some states prohibit an owner-doctor
from referring patients to his or her clinic.
MR. CIMASI stressed that CON regulation does not address this
issue.
4:35:07 PM
REPRESENTATIVE GARDNER asked Mr. Cimasi to repeat the regulation
regarding physician self-referral.
MR. CIMASI answered that the regulation used by many states is
the Stark Act, 42 U. S. C. (section) 1395nn.
4:35:44 PM
JENNIFER HOUSE, Comptroller, Fairbanks Memorial Hospital and
Denali Center, stated that she was opposed to repeal of CON laws
and was amazed to see the bill appear after all of the time and
efforts of the negotiated rule making committee. She expressed
her concern for community hospitals and shared that Fairbanks
Memorial Hospital provided $15 million in uncompensated care in
2007. Ms. House also noted that Section 18.09.110 was drafted
without regard to the burden being placed on facilities.
Problems she anticipates concern contract negotiations, how
timely and accurate the information will be, and whether the
information will be misinterpreted by the public. She concluded
that the state is stepping into an inappropriate role and
suggested that consumers should contact facilities directly for
pricing information.
4:39:41 PM
REPRESENTATIVE GARDNER asked how a hospital can stay in business
while providing $15 million in uncompensated care.
MS. HOUSE stated that that amount was written off as charity or
bad debt; other charges are set at a level to cover
uncompensated care.
4:40:57 PM
REPRESENTATIVE GARDNER asked whether the higher costs are
attacks on those who pay their own way.
MS. HOUSE agreed. She added that Medicare payments create a
hidden tax, as well.
4:41:31 PM
REPRESENTATIVE GARDNER opined that Ms. House's testimony makes
the case that CON laws do not control the cost of care.
MS. HOUSE disagreed. She said that the CON program allows
others to make money on lucrative services.
4:42:31 PM
REPRESENTATIVE ROSES assured the committee that all businesses
have losses, and lost income is built into the price structure.
4:43:36 PM
REPRESENTATIVE SEATON surmised that hospitals do not want to
report costs. He then asked how much would the charity care
have been worth if billed to an insurance company instead of a
cash payor.
MS. HOUSE said that the average discount at Fairbanks Memorial
Hospital is about 5 percent.
4:45:14 PM
REPRESENTATIVE SEATON related that there has been testimony that
charges to insurance companies are sometimes double. He asked
for confirmation that Ms. House said that the difference in
price is five percent less than self pay.
MS. HOUSE said correct.
4:46:05 PM
NORMAN STEPHENS, Chief Executive Officer, Mat-Su Regional
Medical Center, stated that he was a member of the CON task
force. He stressed that the task force was quite a bit of work
and 89 percent of the participants felt that the process was
very effective. Members worked out a compromise and he was
disillusioned by the governor's bill. He encouraged the
committee to look at the recommendations of the task force. In
addition, he explained that the composition of the group was
balanced and members came to terms with each other.
4:49:11 PM
REPRESENTATIVE ROSES expressed his hope that there will be
future testimony by negotiating rules committee members who
represent the imaging or surgery centers.
[HB 337 was held over.]
4:50:14 PM
ADJOURNMENT
There being no further business before the committee, the House
Health, Education and Social Services Standing Committee meeting
was adjourned at 4:50 p.m.
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