Legislature(2011 - 2012)CAPITOL 106

02/07/2012 03:00 PM House HEALTH & SOCIAL SERVICES


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03:06:06 PM Start
03:08:04 PM Presentation: Alaska Health Care Commission
04:35:46 PM Presentation: Citizen Review Panel
05:07:33 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentations: TELECONFERENCED
- Alaska Health Care Commission Report Update by
Deborah Erickson, Executive Director and
Dr. Ward Hurlburt, Chair
- Citizen Review Panel by Christy Lawton,
Director, Office of Children's Services
                    ALASKA STATE LEGISLATURE                                                                                  
      HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE                                                                     
                        February 7, 2012                                                                                        
                           3:06 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Wes Keller, Chair                                                                                                
Representative Alan Dick, Vice Chair                                                                                            
Representative Bob Herron                                                                                                       
Representative Paul Seaton                                                                                                      
Representative Bob Miller                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Beth Kerttula                                                                                                    
Representative Charisse Millett                                                                                                 
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION:  ALASKA HEALTH CARE COMMISSION                                                                                    
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PRESENTATION:  CITIZEN REVIEW PANEL                                                                                             
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
WARD HURLBURT, M.D.                                                                                                             
Chief Medical Officer                                                                                                           
Director                                                                                                                        
Division of Public Health                                                                                                       
Office of the Commissioner                                                                                                      
Department of Health and Social Services                                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Presented a PowerPoint, "Alaska's Approach                                                               
to Increasing Value in Health Care."                                                                                            
                                                                                                                                
DEBORAH ERICKSON, Executive Director                                                                                            
Alaska Health Care Commission                                                                                                   
Office of the Commissioner                                                                                                      
Department of Health and Social Services                                                                                        
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   Answered questions  during the  PowerPoint                                                             
presentation.                                                                                                                   
                                                                                                                                
SUSAN HEUER, Chair                                                                                                              
Citizen Review Panel (CRP)                                                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Presented  a PowerPoint,  "Alaska's Citizen                                                             
Review Panel."                                                                                                                  
                                                                                                                                
PAT HEFLEY                                                                                                                      
Citizen Review Panel                                                                                                            
Juneau, Alaska                                                                                                                  
POSITION   STATEMENT:     Answered  questions   during  the   CRP                                                             
PowerPoint presentation.                                                                                                        
                                                                                                                                
CHRISTY LAWTON, Director                                                                                                        
Central Office                                                                                                                  
Office of Children's Services                                                                                                   
Department of Health and Social Services                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Answered questions during  the presentation                                                             
by the Citizen Review Panel.                                                                                                    
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:06:06 PM                                                                                                                    
                                                                                                                                
CHAIR  WES KELLER  called the  House Health  and Social  Services                                                             
Standing   Committee    meeting   to    order   at    3:06   p.m.                                                               
Representatives Keller, Dick, Miller,  and Herron were present at                                                               
the call to order.   Representative Seaton arrived as the meeting                                                               
was in progress.                                                                                                                
                                                                                                                                
^Presentation:  Alaska Health Care Commission                                                                                   
          Presentation:  Alaska Health Care Commission                                                                      
                                                                                                                                
CHAIR KELLER announced that the  first order of business would be                                                               
a presentation by the Alaska Health Care Commission.                                                                            
                                                                                                                                
3:08:04 PM                                                                                                                    
                                                                                                                                
WARD HURLBURT,  M.D., Chief  Medical Officer,  Director, Division                                                               
of  Public  Health, Office  of  the  Commissioner, Department  of                                                               
Health and  Social Services, introduced  himself as the  Chair of                                                               
the  Alaska  Health Care  Commission,  and  mentioned that  Chair                                                               
Keller was also on the commission.   He stated that one important                                                               
reason  for  the Alaska  Health  Care  Commission was  to  better                                                               
understand the  increasing cost of  health care.  He  presented a                                                               
PowerPoint,  "Alaska's Approach  to  Increasing  Value in  Health                                                               
Care:"  and pointed  to  slide 2,  "Presentation  Overview."   He                                                               
listed  the  PowerPoint topics  to  include  the background,  the                                                               
process and  strategy, the findings to  date, the recommendations                                                               
and the next steps to take.                                                                                                     
                                                                                                                                
3:10:09 PM                                                                                                                    
                                                                                                                                
DR.  HURLBURT,  directing  attention   to  slide  3,  "Commission                                                               
Background," stated  that the purpose  of the commission  was "to                                                               
provide  recommendations  for and  foster  the  development of  a                                                               
statewide  plan   to  address  the  quality,   accessibility  and                                                               
availability of health  care for all citizens of the  state."  He                                                               
pointed  out that  the commission  was  advisory, established  in                                                               
2009 with 14  members appointed by the  Governor, and represented                                                               
the needs of all Alaska.                                                                                                        
                                                                                                                                
3:12:13 PM                                                                                                                    
                                                                                                                                
DR. HURLBURT  moved on to  slide 4, "International  Comparison of                                                               
Spending on  Health, 1980 - 2009,"  pointing to the graph  on the                                                               
left, which  depicted the average  per capita spending  on health                                                               
care.   He affirmed  that the  U.S. had  the highest  average per                                                               
capita spending and  the highest spending on health  as a percent                                                               
of  the national  Gross  Domestic  Product (GDP)  of  any of  the                                                               
industrialized countries.  He pointed  out that U.S. spending was                                                               
50  - 100  percent more  than  any of  the other  countries.   He                                                               
surmised that,  as the  average life  expectancy for  an American                                                               
was lower  and the infant  mortality rate was higher  than almost                                                               
all  the other  industrialized  countries, the  U.S. health  care                                                               
expenses  did not  guarantee a  better  product.   He noted  that                                                               
almost 18 percent of the  current U.S. gross domestic product was                                                               
spent on  health care, and  the Center for Medicare  and Medicaid                                                               
Services was  predicting this to reach  21 percent by the  end of                                                               
the decade.  He recognized the dilemma of where to fund.                                                                        
                                                                                                                                
3:16:22 PM                                                                                                                    
                                                                                                                                
DR. HURLBURT furnished slide 5,  "Cost of Health Care in Alaska,"                                                               
which  projected the  Institute of  Social and  Economic Research                                                               
(ISER)  analysis for  the  cost of  health care  in  Alaska.   He                                                               
declared that  costs will double in  the next ten years,  and the                                                               
cost  of health  care  in  Alaska will  equal  the  value of  the                                                               
extracted oil.                                                                                                                  
                                                                                                                                
CHAIR KELLER declared his concern  that current health care costs                                                               
were half of the cumulative wages of all Alaskans.                                                                              
                                                                                                                                
3:19:12 PM                                                                                                                    
                                                                                                                                
DR. HURLBURT  expressed his concerns  that this business  was too                                                               
important  not  to  be  dealt  with, and  that,  as  these  costs                                                               
increased,  they  would  need  to be  addressed  by  the  medical                                                               
community or there  would be "a slash and  burn" response because                                                               
the costs would become unsustainable.   He opined that this was a                                                               
mission of the Alaska Health Care Commission.                                                                                   
                                                                                                                                
3:20:37 PM                                                                                                                    
                                                                                                                                
DR.  HURLBURT moved  on to  slide  6, "Affordability  - Cost  vs.                                                               
Inflation,  Earnings," which  viewed  national workers'  earnings                                                               
and costs  from 1999 to  the present.   He reported  that, during                                                               
this  time period,  inflation had  increased  38 percent,  worker                                                               
earnings had increased 50 percent,  health insurance premiums had                                                               
increased 160  percent, and workers  contribution to  health care                                                               
premiums had increased 168 percent.                                                                                             
                                                                                                                                
3:22:25 PM                                                                                                                    
                                                                                                                                
DR. HURLBURT  provided slide 7, "Affordability  - U.S. Families,"                                                               
which  stated  that,  although   the  median  family  income  had                                                               
increased by  $23,000 between  1999 and 2009,  the out  of pocket                                                               
costs for health care had increased by the same amount.                                                                         
                                                                                                                                
DR.  HURLBURT   addressed  slide  8,  "Affordability   -  Alaskan                                                               
Families," which reflected cost increases  from 1982 to 2010.  He                                                               
assessed  that housing  had increased  about 76  percent, overall                                                               
costs   had  increased   96   percent,   energy  had   increased,                                                               
specifically in the  last six years, by 280  percent, and medical                                                               
care had increased by almost 420 percent.                                                                                       
                                                                                                                                
3:25:59 PM                                                                                                                    
                                                                                                                                
DR.  HURLBURT   presented  slide  9,  "Affordability   -  Alaskan                                                               
Employers," and  stated that Alaskan employers,  especially small                                                               
employers,  were offering  fewer  health benefits.   He  observed                                                               
that commercial insurance premiums in  Alaska were the highest in                                                               
the  United States,  30 percent  higher  than comparable  states,                                                               
with an  average cost of  almost $12,000 per employee.   Employee                                                               
cost  for family  coverage had  increased from  17 percent  to 22                                                               
percent from  2003 to  2010.  He  reported that  although Premera                                                               
[Blue  Cross] had  60  percent  of the  health  care business  in                                                               
Alaska, its profit  margin had been less than 1  percent over the                                                               
last ten years.                                                                                                                 
                                                                                                                                
3:28:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MILLER asked for  clarification to the profit that                                                               
Premera [Blue Cross] showed.                                                                                                    
                                                                                                                                
DR. HURLBURT  offered his  belief that  the profit  was reflected                                                               
after paying all expenses, including shareholders.                                                                              
                                                                                                                                
REPRESENTATIVE  MILLER  asked what  costs  were  the drivers  for                                                               
these increases.                                                                                                                
                                                                                                                                
DR. HURLBURT replied that he would address that.                                                                                
                                                                                                                                
3:29:49 PM                                                                                                                    
                                                                                                                                
DR.  HURLBURT summarizing  slide  10, "Value  in Alaska's  Health                                                               
System," stated that  Alaska had about 14  percent uninsured, and                                                               
that its per capita health  care expenditures were second only to                                                               
Massachusetts, and its health care  reform program.  However, for                                                               
all this  expenditure, Alaska  only ranked  38th for  health care                                                               
quality, and was only the 35th healthiest state.                                                                                
                                                                                                                                
3:31:09 PM                                                                                                                    
                                                                                                                                
DR. HURLBURT indicated slide 11,  "What System?" and asked how to                                                               
redesign the system  to deliver the best possible  health care at                                                               
the  lowest  possible cost.    He  clarified  that this  did  not                                                               
include rationing  or denying care,  but that full value  for the                                                               
expenditure  was necessary.   He  declared that  the goal  was to                                                               
prudently and  responsibly provide  the best  health care  in the                                                               
world for Alaskans.                                                                                                             
                                                                                                                                
3:32:00 PM                                                                                                                    
                                                                                                                                
DR. HURLBURT quoted  slide 12, "The Conundrum," "If  we don't cut                                                               
costs, we'll have to cut care."                                                                                                 
                                                                                                                                
DEBORAH   ERICKSON,  Executive   Director,  Alaska   Health  Care                                                               
Commission, Office of the Commissioner,  Department of Health and                                                               
Social  Services, referring  to  slide 13,  "The Answer,"  stated                                                               
that the question  seeking an answer was "How can  we make health                                                               
care  less  expensive  by  making   it  better."    She  directed                                                               
attention to  slide 14,  "5 -  Year Strategic  Planning Process,"                                                               
which  detailed  that process  for  the  Commission:   develop  a                                                               
vision  for the  ideal Alaska  health care  system, diagnose  the                                                               
problems for  achievement of the vision,  and identify strategies                                                               
for  movement toward  the  vision.   She  described this  vision,                                                               
slide  15, "The  Future," as  a focus  beyond delivery  of health                                                               
care  services,  to create  a  healthy  Alaska population.    She                                                               
declared an  important component of the  vision was for it  to be                                                               
sustainable   for  the   long  term,   with  high   value,  safe,                                                               
affordable, and accessible care.   She declared the necessity for                                                               
both patients and providers to be satisfied with the system.                                                                    
                                                                                                                                
3:35:10 PM                                                                                                                    
                                                                                                                                
MS. ERICKSON  referred to slide  16, "Health  Care Transformation                                                               
Strategy," which defined the building  blocks for a strong health                                                               
care system in  Alaska.  These included building  a foundation of                                                               
leadership  and health  information  technology, while  designing                                                               
policies to support  healthy life styles with  innovations in the                                                               
delivery of patient centered health  care.  She reviewed slide 17                                                               
and  slide   18,  "Diagnosing  the   Problem,"  and   listed  the                                                               
discussion  of current  challenges to  include the  fragmentation                                                               
and  duplication  in  the  system,   and  the  unique  logistical                                                               
challenges for health care delivery  in Alaska.  She relayed that                                                               
the focus for the past year had  been on the cost of health care.                                                               
She referenced the ISER study  for total health care spending now                                                               
and  in the  future,  which  identified the  payers  and in  what                                                               
service categories  the funds  were spent.   She spoke  about the                                                               
Milliman,  Inc. study  which focused  on health  care pricing  in                                                               
Alaska.   She noted that, of  the $7.5 billion spent  in 2010 for                                                               
health  care, about  60 percent  was for  hospital and  physician                                                               
services, as detailed on slide  19, "What do Alaska's Health Care                                                               
Dollars Buy?"                                                                                                                   
                                                                                                                                
3:38:54 PM                                                                                                                    
                                                                                                                                
MS.  ERICKSON,  indicating slide  20,  "Premiums"  and slide  21,                                                               
"Cost   Drivers:  Utilization,"   noted  that   health  insurance                                                               
premiums,  compared  to  the  national  average,  were  about  30                                                               
percent higher  per member in  Alaska, even though Alaska  had 29                                                               
percent fewer hospital admissions  and 23 percent fewer inpatient                                                               
bed days, with 21 percent more outpatient visits.                                                                               
                                                                                                                                
3:40:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON,  indicating slide  21, asked if  the fewer                                                               
admissions and  inpatient bed  days were  an inverse  cost driver                                                               
for the 30 percent higher health insurance premiums in Alaska.                                                                  
                                                                                                                                
3:41:42 PM                                                                                                                    
                                                                                                                                
DR.  HURLBURT, in  response to  Representative Seaton,  said that                                                               
this  information  was  not  age  adjusted.    He  reported  that                                                               
although  Alaska had  the fastest  growing  senior population  by                                                               
percentage, there was still half  the percentage of seniors as in                                                               
most other states.  He  pointed out that hospital visits increase                                                               
after  the  age  of  65.     Directing  attention  to  slide  22,                                                               
"Utilization -  Milliman's Conclusion,"  he opined  that Alaska's                                                               
utilization did not appear to be driving the high premiums.                                                                     
                                                                                                                                
3:43:17 PM                                                                                                                    
                                                                                                                                
DR.  HURLBURT, in  response to  Representative Seaton,  clarified                                                               
that  the rate  of  increase to  seniors over  65  in Alaska  was                                                               
higher  than any  other state,  but the  relative percent  to the                                                               
absolute population of Alaska was still much lower.                                                                             
                                                                                                                                
3:43:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DICK gave  an example  of  personal health  costs                                                               
which he questioned.                                                                                                            
                                                                                                                                
3:45:02 PM                                                                                                                    
                                                                                                                                
DR.  HURLBURT  moved   on  to  slide  23,   "Alaska  prices*  are                                                               
significantly higher than comparison  states," and explained that                                                               
physician services  were 69 percent higher  for commercial payers                                                               
and 60  percent higher for  all other payers,  including Workers'                                                               
Compensation, Medicaid,  Medicare, and Veterans Health  Care.  He                                                               
pointed  out   that  this  varied   by  specialty,   noting  that                                                               
pediatrics were 43  percent higher and cardiology  was 83 percent                                                               
higher in Alaska.  He reported  that the hospital rates in Alaska                                                               
were  37 percent  higher  for commercial  payers  and 36  percent                                                               
higher for Medicare  than in the comparison states.   He declared                                                               
that there were very wide price disparities to each payer.                                                                      
                                                                                                                                
3:47:06 PM                                                                                                                    
                                                                                                                                
DR. HURLBURT  moved on  to slides 24  - 25,  "Sample comparisons:                                                               
Mean commercial  allowed charges non-facility  based professional                                                               
svcs," which compared procedural charges  in Alaska to five other                                                               
states.  He stated that Alaska  charges were often twice those of                                                               
other states.   Directing  attention to slides  26 -  27, "Sample                                                               
Comparisons:  within  Alaska,  by  payer," he  pointed  out  that                                                               
although  the  Medicare  rates  were  the  lowest,  the  Workers'                                                               
Compensation rates were the highest.                                                                                            
                                                                                                                                
3:49:24 PM                                                                                                                    
                                                                                                                                
DR. HURLBURT assessed slide 28,  "Cost (Price) Drivers- Operating                                                               
Costs" and  stated that medical  salaries in  Alaska were 2  - 10                                                               
percent higher in  Alaska; the cost of living in  Alaska was 15 -                                                               
20  percent higher;  and that  hospital operating  costs were  38                                                               
percent  higher than  comparable  states.   He  pointed out  that                                                               
these  higher   hospital  operating  costs  included   the  rural                                                               
hospital  operating  costs  which   were  86  percent  higher  on                                                               
average.                                                                                                                        
                                                                                                                                
3:50:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DICK asked  if this  included  the Alaska  Native                                                               
medical centers.                                                                                                                
                                                                                                                                
3:50:54 PM                                                                                                                    
                                                                                                                                
DR. HURLBURT, in  response to Representative Dick,  said that the                                                               
salary and  wage statistics reflected  the marketplace,  but that                                                               
the comparisons  for operating costs and  profit margins excluded                                                               
tribal and federal hospitals.                                                                                                   
                                                                                                                                
3:51:29 PM                                                                                                                    
                                                                                                                                
DR.  HURLBURT  discussed  slide   29,  "Cost  (Price)  Drivers  -                                                               
Provider  Discounts" which  depicted the  discount percentage  to                                                               
bill charges  that payers negotiated  with providers.   He stated                                                               
that, as bill  charges were not fixed, the health  payers did not                                                               
want to  contract for billed charges;  instead, payers negotiated                                                               
a  case rate  and a  per diem  rate.   He offered  that the  only                                                               
reason for  a payer to contract  for billed charges was  due to a                                                               
lack  of  competition and  a  need  to  have  the provider.    He                                                               
reported that  this precluded the  provider from  balance billing                                                               
the difference to the patient.                                                                                                  
                                                                                                                                
3:53:20 PM                                                                                                                    
                                                                                                                                
DR.  HURLBURT  introduced  slide  30,  "Private  Hospital  Sector                                                               
Average Operating Margins," which  compared the operating margins                                                               
of  comparison  states  and the  nationwide  average  with  those                                                               
margins  in both  urban  and  rural Alaska.    He concluded  that                                                               
Alaska's operating  margins were more  than twice as high  as the                                                               
comparison states, and even higher  when just comparing the urban                                                               
hospitals  with those  of other  states.   He analyzed  slide 31,                                                               
"Milliman's  Cost (Price)  Driver  Conclusions," clarifying  that                                                               
these  conclusions were  just reflecting  private hospitals.   He                                                               
reported that the  operating costs were driving  higher prices in                                                               
rural Alaska,  but that  the operating  margins were  driving the                                                               
higher prices in  urban Alaska hospitals.   Pointing to physician                                                               
services, he stated  that the high prices were driven  by lack of                                                               
competition and by Alaska statute,  which locked payers to pay at                                                               
least 80 percent  of the billed charges.  He  shared that the low                                                               
Medicare rates also created upward pricing to other payers.                                                                     
                                                                                                                                
3:55:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON, referring  to  the aforementioned  Alaska                                                               
statute, asked for further definition  to the 80 percent required                                                               
payment.    He asked  if  the  Department  of Health  and  Social                                                               
Services (DHSS) supported this.                                                                                                 
                                                                                                                                
3:56:09 PM                                                                                                                    
                                                                                                                                
DR. HURLBURT opined that DHSS had  not taken a position, but that                                                               
the Alaska  Health Care  Commission had determined  this to  be a                                                               
driver for higher health care costs.                                                                                            
                                                                                                                                
3:56:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  asked if  there was a  purpose for  the 80                                                               
percent reimbursement.                                                                                                          
                                                                                                                                
DR.  HURLBURT postulated  that historically  the legislature  was                                                               
concerned about  enough health care  for Alaskans,  so incentives                                                               
were created  to attract  the medical community.   He  noted that                                                               
this  had  included legislation  to  limit  malpractice rates  in                                                               
Alaska.                                                                                                                         
                                                                                                                                
3:58:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  asked if  the Certificate of  Need program                                                               
compounded the problem of inadequate competition.                                                                               
                                                                                                                                
3:58:51 PM                                                                                                                    
                                                                                                                                
DR.  HURLBURT  specified   that  the  aforementioned  legislation                                                               
applied  only to  physician charges,  not hospital  charges.   He                                                               
reported that the cost disparity  for hospital charges was not as                                                               
wide as  for individual provider  charges.  He pointed  out that,                                                               
as the  Certificate of  Need applied  to institutions,  it should                                                               
have no effect.                                                                                                                 
                                                                                                                                
3:59:32 PM                                                                                                                    
                                                                                                                                
DR.  HURLBURT  provided slide  33,  "5%  of the  U.S.  population                                                               
required 50% of health care  spending in 2009," and reported that                                                               
"5  percent of  the population  consume about  50 percent  of the                                                               
health  care dollars,"  whereas,  "50 percent  of the  population                                                               
consumes  about  3 percent  of  the  health  care dollars."    He                                                               
observed  that,  narrowing this  down,  about  1 percent  of  the                                                               
population consumed 25  - 30 percent of the  health care dollars.                                                               
He  declared that  it was  necessary to  keep this  in mind  when                                                               
planning to control costs.                                                                                                      
                                                                                                                                
4:00:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON,  referring  to   slide  33,  asked  about                                                               
recommendations for change.                                                                                                     
                                                                                                                                
DR. HURLBURT replied that, philosophically,  it was not worth the                                                               
time to  intervene with  the 50 percent  healthy population.   He                                                               
reflected  on a  prior management  role  he had,  and cited  that                                                               
targeting some groups  to reduce their needs  for hospital visits                                                               
could result in significant savings.                                                                                            
                                                                                                                                
4:02:41 PM                                                                                                                    
                                                                                                                                
DR.  HURLBURT, in  response to  Representative Herron,  suggested                                                               
that improving  the health  of the 5  percent would  decrease the                                                               
health expenditure, as shown on slide 33.                                                                                       
                                                                                                                                
4:03:46 PM                                                                                                                    
                                                                                                                                
DR. HURLBURT,  in response to Representative  Herron, agreed that                                                               
it  could either  lower  the  actual cost  or  the percentage  of                                                               
health care cost to GDP.                                                                                                        
                                                                                                                                
4:04:33 PM                                                                                                                    
                                                                                                                                
DR. HURLBURT  moved on to  slide 34,  "Focus on Health  & Value,"                                                               
and suggested to  focus on prevention for  the healthy population                                                               
in order  to keep them healthy.   He opined that  this generation                                                               
of  kids may  be the  first that  does not  live as  long as  its                                                               
parents.  For  the mild to moderate illnesses  and conditions, he                                                               
suggested  high  quality,  evidence-based,  efficient,  effective                                                               
care  to  prevent  conditions  from worsening.    With  the  most                                                               
complex conditions, the cost increased,  and it becomes necessary                                                               
to provide care coordination and management.                                                                                    
                                                                                                                                
4:05:37 PM                                                                                                                    
                                                                                                                                
DR.  HURLBURT  presented slide  35,  "Ensure  the best  available                                                               
evidence  is used  for making  decisions," stating  that evidence                                                               
based medicine  was a difficult  concept for both the  public and                                                               
medical professionals.   He  touted the use  of evidence  to make                                                               
coverage and  clinical decisions.   He opined that  a randomized,                                                               
blind  study  offered  the  highest   grade  of  evidence,  while                                                               
consensus  conference, or  expert  opinion,  elicited the  lowest                                                               
grade of  evidence.  He  opined that 30  to 40 percent  of health                                                               
care was  not supported by evidence,  and he offered a  number of                                                               
examples.                                                                                                                       
                                                                                                                                
4:09:58 PM                                                                                                                    
                                                                                                                                
DR.  HURLBURT  directed attention  to  slide  36, "The  need  for                                                               
application of  high grade evidence,"  and offered as  an example                                                               
Vioxx, a drug which was used without the high grade evidence.                                                                   
                                                                                                                                
4:10:37 PM                                                                                                                    
                                                                                                                                
MS. ERICKSON presented slide 39,  "Enhance quality and efficiency                                                               
of  care   on  the   front  end,"   and  slide   40,  "Commission                                                               
Recommendations."   She mentioned  both patient  centered primary                                                               
care and  patient centered  medical homes  as ways  which offered                                                               
relationships  and good  access  with primary  care providers  to                                                               
better  manage  early  conditions.     She  said  the  commission                                                               
researched  state  initiatives  regarding successful  models  for                                                               
patient  centered primary  care,  and then  convened  a panel  to                                                               
review  the  challenges  and   opportunities  these  created  for                                                               
Alaska.    She noted  that  the  successful programs  had  strong                                                               
medical  leadership  and management,  a  lot  of flexibility  for                                                               
individual  participating physician  practices,  and  a focus  on                                                               
improving care for  the complex case management  of patients with                                                               
multiple   chronic  conditions.      She   emphasized  that   the                                                               
initiatives were  grounded in the  idea to make the  patient care                                                               
better.    She  pointed  to  the  attributes  for  success  which                                                               
included  upfront  investment  by   the  payer,  shared  learning                                                               
environments, and timely access to patient data.                                                                                
                                                                                                                                
4:15:10 PM                                                                                                                    
                                                                                                                                
MS.   ERICKSON   continued   on    to   slide   41,   "Commission                                                               
Recommendations, Trauma  Systems," and announced support  for the                                                               
continued  implementation  of  the recommendations  by  the  2008                                                               
American College of Surgeons.                                                                                                   
                                                                                                                                
MS.  ERICKSON,  noting  slide  43,  "Commission  Recommendations,                                                               
Preliminary Steps  Toward Transparency," said that  for price and                                                               
quality transparency it was necessary  to have full participation                                                               
in the Hospital Discharge Database,  and to study the feasibility                                                               
of an All-Payers Claims Database.                                                                                               
                                                                                                                                
4:16:18 PM                                                                                                                    
                                                                                                                                
CHAIR  KELLER  opined  that although  other  states  had  already                                                               
passed this  legislation, the complexity of  medical billing made                                                               
it  very difficult  for  the  consumer.   He  identified this  as                                                               
possible  legislation for  the House  Health and  Social Services                                                               
Standing Committee to address.                                                                                                  
                                                                                                                                
4:17:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON asked  about the  feasibility of  an index                                                               
for the patient to find the cost and quality information.                                                                       
                                                                                                                                
4:19:17 PM                                                                                                                    
                                                                                                                                
MS. ERICKSON replied that the  consumer was one step removed from                                                               
price concern  when there was  insurance coverage.   Referring to                                                               
slide  46, "All-Payer  Claims  Databases  (APCDs)," she  declared                                                               
that  some  state models  for  APCDs  required state  legislation                                                               
mandating that  the payer data  be available to  consumers, which                                                               
could incentivize  the consumer to shop  before medical decision.                                                               
She relayed that  the commission would work with  a consultant on                                                               
a feasibility and  needs assessment study.  She  opined that this                                                               
could be  a more simple  approach for transparency than  for each                                                               
provider to supply prices.                                                                                                      
                                                                                                                                
4:22:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  asked  about  a  mechanism  for  decision                                                               
making about hospitals.                                                                                                         
                                                                                                                                
4:23:29 PM                                                                                                                    
                                                                                                                                
DR. HURLBURT  replied that  the quality  rating systems  would be                                                               
adjusted to account for the types of service.                                                                                   
                                                                                                                                
4:23:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DICK asked  if the  cost  of non-paying  patients                                                               
affected the cost of health service.                                                                                            
                                                                                                                                
4:24:11 PM                                                                                                                    
                                                                                                                                
DR.  HURLBURT  replied  that the  hospital  profit  margins  were                                                               
determined after  all expenses,  including the  non-pay patients.                                                               
He  pointed out  that profit  margins  were much  lower in  rural                                                               
areas.                                                                                                                          
                                                                                                                                
4:24:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DICK  asked to clarify  the percentage of  cost to                                                               
the system from non-paying patients.                                                                                            
                                                                                                                                
DR. HURLBURT replied that he would research this.                                                                               
                                                                                                                                
CHAIR  KELLER  expressed his  belief  in  the  free market.    He                                                               
offered his  belief that health  care shopping now  included more                                                               
out of state spending.                                                                                                          
                                                                                                                                
4:26:23 PM                                                                                                                    
                                                                                                                                
MS.  ERICKSON  moved on  to  slide  52, "'Continuum'  of  Payment                                                               
Reform,"  and  declared  that  most  medical  care  was  fee  for                                                               
service.  She  said that the commission was  reviewing reform for                                                               
the  payment of  services  to  better drive  value  and not  just                                                               
delivery  of  individual services.    She  directed attention  to                                                               
slide  53, "Payment  Reform  System  Requirements," which  listed                                                               
various  requirements necessary  to payment  reform.   She stated                                                               
that  both  payers  and  providers   needed  data  and  actuarial                                                               
expertise if providers  were going to assume  more financial risk                                                               
for providing  service.  She  indicated that payment  for outcome                                                               
and  value required  a partnership  between patients,  providers,                                                               
and  payers,  to keep  the  healthy  population healthy,  and  to                                                               
better manage  the sick patients.   She spoke of the  movement to                                                               
better integrate  services, as it  was necessary to  better align                                                               
payment policies.                                                                                                               
                                                                                                                                
4:29:49 PM                                                                                                                    
                                                                                                                                
MS. ERICKSON reviewed slide 58,  "Health Workforce," and referred                                                               
to recommendations from an earlier  report to build a sustainable                                                               
work force and information infrastructure.                                                                                      
                                                                                                                                
4:30:07 PM                                                                                                                    
                                                                                                                                
MS.  ERICKSON mentioned  that obesity  was  the most  significant                                                               
public  health challenge,  immunization programs  needed adequate                                                               
funding,  and  behavioral health  needed  to  be integrated  with                                                               
primary care services, slides 61 - 63.                                                                                          
                                                                                                                                
4:30:33 PM                                                                                                                    
                                                                                                                                
MS.  ERICKSON   mentioned  that   the  commission   would  review                                                               
challenges  that   the  provider  community  had   identified  as                                                               
hampering innovation and driving  increased costs, plans that the                                                               
business community had to improve  employee health plans, patient                                                               
choices for end  of life care decisions, and barriers  to the use                                                               
of telemedicine, slide 65, "Commission's 2012 Agenda."                                                                          
                                                                                                                                
MS.  ERICKSON mentioned  that the  appendix  of the  Commission's                                                               
2011  Annual  Report  included an  update  on  implementation  of                                                               
provisions in the Affordable Care Act.                                                                                          
                                                                                                                                
4:32:07 PM                                                                                                                    
                                                                                                                                
MS. ERICKSON, in response to  Chair Keller, said that the Request                                                               
for  Proposal  (RFP)   for  a  health  plan   consultant  by  the                                                               
Department  of   Administration  (DOA)  said   that  Commissioner                                                               
Hultberg (DOA) and Commissioner  Streur (Department of Health and                                                               
Social  Services) would  work together  on  joint strategies,  to                                                               
redesign  the  employee  health   benefit  plan  and  develop  an                                                               
employee  wellness and  health management  program.   She offered                                                               
her  belief   that  this  would  address   opportunities  for  an                                                               
alignment of strategies for  Medicaid, Workers' Compensation, and                                                               
other state health care programs.                                                                                               
                                                                                                                                
4:34:57 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
^Presentation: Citizen Review Panel                                                                                           
               Presentation: Citizen Review Panel                                                                           
                                                                                                                                
4:35:46 PM                                                                                                                    
                                                                                                                                
CHAIR KELLER announced that the  final order of business would be                                                               
a presentation by the Alaska's Citizen Review Panel.                                                                            
                                                                                                                                
SUSAN  HEUER, Chair,  Citizen Review  Panel  (CRP), presenting  a                                                               
PowerPoint,  "Alaska's Citizen  Review  Panel,"  stated that  the                                                               
mission  was to  provide oversight  to the  Office of  Children's                                                               
Services  (OCS)  and  gather  public  input  on  how  well  child                                                               
protection was being delivered statewide.   She listed the places                                                               
CRP  had   recently  visited   including  Bethel,   Wasilla,  and                                                               
Fairbanks.   She noted  that, nationally, this  was the  only CRP                                                               
funded by a state legislature.                                                                                                  
                                                                                                                                
MS. HEUER, directed attention to  slide 7, "Benefits of CRP," and                                                               
explained that  the eight volunteer members  annually contributed                                                               
250  hours of  active service,  and  had the  unique function  of                                                               
identifying   and   advocating   for   ancillary   services   and                                                               
improvements that OCS could not request.                                                                                        
                                                                                                                                
4:38:48 PM                                                                                                                    
                                                                                                                                
MS. HEUER  shared slide 8,  "Issues CRP is monitoring,"  and said                                                               
that CRP  was focusing  to resolve the  struggles of  the Wasilla                                                               
OCS office,  and to find solutions  for the Bethel OCS  office to                                                               
ensure it was fully staffed and fully functional.                                                                               
                                                                                                                                
4:40:31 PM                                                                                                                    
                                                                                                                                
CHAIR KELLER commented  that the Department of  Health and Social                                                               
Services  and OCS  had  been  very responsive  to  the issues  in                                                               
Wasilla.                                                                                                                        
                                                                                                                                
4:41:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON reported  that  the Bethel  OCS staff  had                                                               
challenges  for  discussion, and  anticipated  a  visit from  the                                                               
Citizen Review Panel.                                                                                                           
                                                                                                                                
4:42:22 PM                                                                                                                    
                                                                                                                                
MS. HEUER,  directing attention back  to slide 8,  explained that                                                               
the third  issue to monitor  was in-home safety, an  OCS strategy                                                               
to determine the safety of  children remaining in the family home                                                               
after a report of crime.   She reported that CRP was working with                                                               
OCS to  acquire data  to monitor  the safety  of the  children in                                                               
this situation.                                                                                                                 
                                                                                                                                
4:43:31 PM                                                                                                                    
                                                                                                                                
MS. HEUER,  referring to  slide 9,  "2012 CRP  Recommendations to                                                               
OCS," presented  input from statewide  communities for OCS.   The                                                               
first recommendation was for OCS to  use the data they collect as                                                               
a management  tool.  She  acknowledged that the  often previously                                                               
maligned ORCA system  now appeared to be improved and  was a good                                                               
tool.  She  suggested that the ORCA data could  offer reasons for                                                               
the high turnover rate in the Wasilla office.                                                                                   
                                                                                                                                
4:45:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  asked  if exit  interviews  would  better                                                               
address the reasons for low staff retention.                                                                                    
                                                                                                                                
4:46:25 PM                                                                                                                    
                                                                                                                                
MS. HEUER  replied that there  were no requests to  improve ORCA.                                                               
She clarified that staff turnover was  merely an example of a use                                                               
for the ORCA data.                                                                                                              
                                                                                                                                
4:47:07 PM                                                                                                                    
                                                                                                                                
PAT HEFLEY, Citizen  Review Panel, confirmed that  there had been                                                               
issues with the  ORCA database, and that it could  be better used                                                               
as a  management tool.   He acknowledged  a challenge  to address                                                               
the key  workforce issues, such  as training needs,  salaries, or                                                               
retention.                                                                                                                      
                                                                                                                                
4:47:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  asked  if   a  requirement  for  an  exit                                                               
interview could be included in staff contracts.                                                                                 
                                                                                                                                
4:48:05 PM                                                                                                                    
                                                                                                                                
MR. HEFLEY replied  that the use and understanding  of why people                                                               
leave was an issue throughout the  state.  He opined that an exit                                                               
interview could only be required through the union contract.                                                                    
                                                                                                                                
4:48:44 PM                                                                                                                    
                                                                                                                                
MS. HEUER  encouraged the statewide  use of data as  a management                                                               
tool.   She moved on  to slide  10, "2012 CRP  Recommendations to                                                               
OCS," and stated  that protective service reports,  or reports of                                                               
harm, should  ensure the safety  of a child  if they remain  in a                                                               
family home.   She declared the difficulty  to obtain information                                                               
regarding  a child's  safety  after  a report  of  harm has  been                                                               
screened in to an "in-home" situation.   She declared that it was                                                               
difficult  to establish  when  OCS staff  initiated  work with  a                                                               
family in an "in-home" situation,  when the referral for services                                                               
for the family  was made, who was monitoring  the child's safety,                                                               
and what happened  at the end of the six  month "in-home" period.                                                               
She  suggested that  this data  could demonstrate  the timeliness                                                               
and  effectiveness  of  referral  and services  to  families  and                                                               
children.   She declared it to  be in a child's  best interest if                                                               
family services could  be received while a child  remained in the                                                               
home.                                                                                                                           
                                                                                                                                
4:53:42 PM                                                                                                                    
                                                                                                                                
MR. HEFLEY  confirmed that OCS was  trying to do a  balancing act                                                               
between keeping  children safely  at home  and having  them taken                                                               
out of homes.                                                                                                                   
                                                                                                                                
4:54:45 PM                                                                                                                    
                                                                                                                                
MS. HEUER reviewed  slide 11, "2012 CRP  Recommendations to OCS,"                                                               
and recommended that  OCS address the licensing  for those foster                                                               
homes where substantiated reports of problems were filed.                                                                       
                                                                                                                                
4:56:02 PM                                                                                                                    
                                                                                                                                
MS. HEUER  concluded with slide  12, "CRP Recommendations  to the                                                               
Legislature," which  listed housing  for OCS  rural workers  as a                                                               
critical issue  for staff retention.   She offered  some examples                                                               
for solutions.   She declared  a need  for more support  staff to                                                               
social  workers, pending  the results  of  the upcoming  workload                                                               
study.  She pointed out that  the Palmer court had struggled with                                                               
the load from  Wasilla OCS cases, and that there  was also a need                                                               
for an additional  Office of Public Advocacy (OPA)  Child In Need                                                               
of Aid (CINA) attorney in the Palmer office.                                                                                    
                                                                                                                                
4:58:55 PM                                                                                                                    
                                                                                                                                
CHRISTY LAWTON,  Director, Central  Office, Office  of Children's                                                               
Services, Department  of Health and Social  Services, in response                                                               
to the  discussion of exit  surveys, stated that OCS  did request                                                               
this  from  employees,  but  that  it  was  not  required.    She                                                               
acknowledged that this data was  collected, and she reported that                                                               
an additional  staff survey was  conducted annually  to ascertain                                                               
factors  behind decisions  to  stay  or leave  the  agency.   She                                                               
acknowledged that some  reasons for departure included  a lack of                                                               
clerical support, as  well as not having the time  for one on one                                                               
work with family members.                                                                                                       
                                                                                                                                
5:02:39 PM                                                                                                                    
                                                                                                                                
MS. LAWTON  respectfully disagreed  with the allegation  that OCS                                                               
was not  using the data  they had  collected.  She  declared that                                                               
the ORCA capacity had increased,  which allowed for collection of                                                               
raw  data,  annual site  reviews  at  each  field office,  and  a                                                               
statewide  analysis  of  workloads and  available  resources  for                                                               
guidance in scheduling.                                                                                                         
                                                                                                                                
5:05:18 PM                                                                                                                    
                                                                                                                                
CHAIR KELLER asked  that Ms. Lawton return to  the next committee                                                               
meeting, February 9, to finish the discussion.                                                                                  
                                                                                                                                
5:05:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON  asked  that   Ms.  Lawton,  at  her  next                                                               
presentation, address the culture within OCS.                                                                                   
                                                                                                                                
5:07:33 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Health  and  Social  Services   Standing  Committee  meeting  was                                                               
adjourned at 5:07 p.m.                                                                                                          

Document Name Date/Time Subjects
H HSS 02-07-12 Alaska Health Care Commission update.pdf HHSS 2/7/2012 3:00:00 PM
Alaska Health Care Commission Presentation
PRINT Presentation 2012 HSS Committee Feb.pptx HHSS 2/7/2012 3:00:00 PM
Citizen's Review Panel Presentation