Legislature(2011 - 2012)CAPITOL 106

03/01/2012 03:00 PM House HEALTH & SOCIAL SERVICES


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03:05:19 PM Start
03:06:52 PM Presentation: Alaska State Hospital and Nursing Home Association
04:43:32 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentations from Alaska State Hospital and TELECONFERENCED
Nursing Home Association by:
- Mike Powers, Fairbanks Memorial Hospital
- Robert F. Letson, South Peninsula Hospital,
Homer
- Elizabeth Woodyard, Petersburg Medical Center
- Rick Davis, Central Peninsula General Hospital,
Soldotna
- Millie Duncan, Wildflower Court, Juneau
                    ALASKA STATE LEGISLATURE                                                                                  
      HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE                                                                     
                         March 1, 2012                                                                                          
                           3:05 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Wes Keller, Chair                                                                                                
Representative Alan Dick, Vice Chair                                                                                            
Representative Bob Herron                                                                                                       
Representative Paul Seaton                                                                                                      
Representative Beth Kerttula                                                                                                    
Representative Bob Miller                                                                                                       
Representative Charisse Millett                                                                                                 
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION: ALASKA STATE HOSPITAL AND NURSING HOME ASSOCIATION                                                                
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
MIKE POWERS                                                                                                                     
Fairbanks Memorial Hospital                                                                                                     
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified and answered questions during a                                                                
PowerPoint presentation titled "Overview of Alaska's Hospitals                                                                  
and Nursing Homes."                                                                                                             
                                                                                                                                
RICK DAVIS, CEO                                                                                                                 
Central Peninsula Hospital                                                                                                      
Soldotna, Alaska                                                                                                                
POSITION STATEMENT:  Testified and answered questions during a                                                                
PowerPoint presentation titled "Overview of Alaska's Hospitals                                                                  
and Nursing Homes."                                                                                                             
                                                                                                                                
ROBERT LETSON, CEO                                                                                                              
South Peninsula Hospital                                                                                                        
Homer, Alaska                                                                                                                   
POSITION  STATEMENT:  Testified  and answered  questions  during a                                                            
PowerPoint  presentation titled  "Overview  of Alaska's  Hospitals                                                              
and Nursing Homes."                                                                                                             
                                                                                                                                
LIZ WOODYARD, CEO                                                                                                               
Petersburg Medical Center                                                                                                       
Petersburg, Alaska                                                                                                              
POSITION  STATEMENT:  Testified  and answered  questions  during a                                                            
PowerPoint  presentation titled  "Overview  of Alaska's  Hospitals                                                              
and Nursing Homes."                                                                                                             
                                                                                                                                
MILLIE DUNCAN, Administrator                                                                                                    
Wildflower Court                                                                                                                
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:  Testified  and answered  questions  during a                                                            
PowerPoint  presentation titled  "Overview  of Alaska's  Hospitals                                                              
and Nursing Homes."                                                                                                             
                                                                                                                                
KAREN PERDUE, President/CEO                                                                                                     
Alaska State Hospital & Nursing Home Association (ASHNHA)                                                                       
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:  Answered  questions  during the overview  of                                                            
Alaska's Hospitals and Nursing Homes.                                                                                           
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:05:19 PM                                                                                                                    
                                                                                                                                
CHAIR  WES KELLER  called  the House  Health  and Social  Services                                                            
Standing    Committee   meeting    to   order    at   3:05    p.m.                                                              
Representatives Keller,  Miller, Seaton, and Dick  were present at                                                              
the  call  to   order.    Representatives  Millett,   Herron,  and                                                              
Kerttula arrived as the meeting was in progress.                                                                                
                                                                                                                                
^Presentation:   Alaska   State    Hospital   and   Nursing   Home                                                            
Association                                                                                                                   
 Presentation: Alaska State Hospital and Nursing Home Association                                                           
                                                                                                                              
3:06:52 PM                                                                                                                    
                                                                                                                                
CHAIR KELLER  announced that the  only order of business  would be                                                              
a  presentation by  the  Alaska State  Hospital  and Nursing  Home                                                              
Association (ASHNHA).                                                                                                           
                                                                                                                                
3:06:58 PM                                                                                                                    
                                                                                                                                
MIKE  POWERS,   Fairbanks  Memorial  Hospital,   established  that                                                              
hospitals  and   nursing  homes   were  economic  anchors   for  a                                                              
community, as they  were a recession proof industry.   He directed                                                              
attention to the  Silver Tsunami, the population over  65 years of                                                              
age,  and noted  that  this group  will  increase  127 percent  by                                                              
2034.   He affirmed that hospitals  were also education  partners,                                                              
and  he reported  that  an earlier  17  percent  vacancy rate  for                                                              
nurses  had  almost  been  filled  by  the  University  of  Alaska                                                              
nursing program.   In  Fairbanks, more than  1000 students  had an                                                              
educational   experience  through   the   Area  Health   Education                                                              
Centers.  He  confirmed that major life passages  occurred between                                                              
the walls  of the  hospital.   He directed  attention to  slide 1,                                                              
"Alaska  is  Beyond Rural  when  compared  to other  States,"  and                                                              
observed that Alaska  was very unique, as it was  still a frontier                                                              
state.                                                                                                                          
                                                                                                                                
3:10:56 PM                                                                                                                    
                                                                                                                                
MR.  POWERS  indicated  slide  2, "78%  of  Health  Facilities  in                                                              
Alaska have  Special Federal  Designation,"  and pointed  out that                                                              
almost 80  percent of the health  care facilities in Alaska  had a                                                              
federal designation,  which allowed  flexibility in  reimbursement                                                              
and regulation relative  to the uniqueness of the  critical access                                                              
hospitals in rural areas.                                                                                                       
                                                                                                                                
3:11:21 PM                                                                                                                    
                                                                                                                                
MR. POWERS moved  on to slide 3, "Health Care is  a Major Employer                                                              
in Alaska,"  and reported that  almost 1 out  of every 10  jobs in                                                              
Alaska was health care related, with a payroll of $1.5 billion.                                                                 
                                                                                                                                
3:11:34 PM                                                                                                                    
                                                                                                                                
MR. POWERS supplied  slide 4, "Half of all Health  Care Employment                                                              
is  in Hospitals  &  Nursing Homes,"  and  stated that  hospitals,                                                              
nursing homes, and  physician clinics accounted for  80 percent of                                                              
health care jobs.                                                                                                               
                                                                                                                                
3:11:50 PM                                                                                                                    
                                                                                                                                
MR.  POWERS  moved on  to  slide  5, "Health  Care  Employment  is                                                              
throughout  the   State,"  noting  that  health   care  employment                                                              
followed the  population patterns of  the state.  He  shared slide                                                              
6, "Health Facilities  are Impacted by Higher Costs,"  pointing to                                                              
the  cost of  living  index and  various  costs  within the  major                                                              
cities of Alaska.                                                                                                               
                                                                                                                                
3:12:43 PM                                                                                                                    
                                                                                                                                
MR. POWERS  stated  that, compared  to other  states, the  cost of                                                              
living  in Alaska was  about 30  percent higher  and the  hospital                                                              
costs  were  about  38 percent  higher,  slide  7,  "Alaska  Costs                                                              
Compared to Comparison States."                                                                                                 
                                                                                                                                
MR.  POWERS,  showing  the  pictures on  slide  8,  "Cost  Drivers                                                              
Impacting  the Cost  of  Care in  Alaska,"  stated  that the  cost                                                              
drivers for  health care tended  to be recruiting,  retaining, and                                                              
training the work force.                                                                                                        
                                                                                                                                
MR.  POWERS pointing  to slide  9,  "Alaska Pays  More for  Health                                                              
Care  Practitioners than  8 Comparison  States,"  shared that  the                                                              
high hourly  annual salary in Alaska  allowed many people  to stay                                                              
in their community to work in health care.                                                                                      
                                                                                                                                
3:13:25 PM                                                                                                                    
                                                                                                                                
MR.  POWERS   directing  attention   to  slide  10,   "The  Silver                                                              
Tsunami,"  stated  that the  increase  of  Alaska seniors  was  "a                                                              
freight  train headed  our way  and we  need to  address...."   He                                                              
declared hospitals and  long term care to be an  important part of                                                              
the solution.                                                                                                                   
                                                                                                                                
3:13:56 PM                                                                                                                    
                                                                                                                                
MR.  POWERS   confirmed  that   more  than   36  percent   of  the                                                              
transportation for  trauma care was  in excess of 60  miles, slide                                                              
11, "Patients Must Travel to Receive Care."                                                                                     
                                                                                                                                
3:14:25 PM                                                                                                                    
                                                                                                                                
MR. POWERS,  slide 12, "Hospitals  Must Serve All Who  Need Care,"                                                              
reported  that  uncompensated  care  in Alaska,  $178  million  in                                                              
2009, was a driver of costs.                                                                                                    
                                                                                                                                
CHAIR KELLER  asked for an  explanation to the difference  between                                                              
lost revenue and uncompensated care.                                                                                            
                                                                                                                                
MR. POWERS said that he would look into the answer.                                                                             
                                                                                                                                
3:15:11 PM                                                                                                                    
                                                                                                                                
MR. POWERS  declared that Alaska  communities were defined  by the                                                              
rural  health  care  facilities,  the  sole  community  providers,                                                              
whose  service   included  normal  birth  deliveries,   psychoses,                                                              
alcohol abuse,  and pneumonia,  slide 14, "Who  Do We Serve."   He                                                              
described  the   unique  relationship   between  the   native  and                                                              
military health care communities in Fairbanks.                                                                                  
                                                                                                                                
3:16:18 PM                                                                                                                    
                                                                                                                                
MR. POWERS  indicated slide  15, "Economic  Impact," and  detailed                                                              
that Fairbanks  Memorial Hospital  had 1350 employees,  spent $107                                                              
million  for salaries  and  benefits, and  had  gross revenues  of                                                              
$360 million.   He shared that sufficient capital  was an on-going                                                              
issue,  and  explained  the  upcoming 10  year  campaign  of  fund                                                              
raising.                                                                                                                        
                                                                                                                                
MR.  POWERS,   slide  16,  described   the  key   "Challenges"  at                                                              
Fairbanks Memorial  Hospital which included  adolescent behavioral                                                              
health  services and  the  contracts with  Boys  and Girls  homes,                                                              
community behavioral  health centers, and counseling  centers.  He                                                              
cited community  ownership, physician  recruitment, and  the focus                                                              
on nursing programs as "Sources of Pride."                                                                                      
                                                                                                                                
3:18:14 PM                                                                                                                    
                                                                                                                                
MR.  POWERS  offered slide  17,  "Going  Forward," and  said  that                                                              
physician  integration  with  the  Tanana  Valley  clinic  was  an                                                              
opportunity to co-ordinate care and keep expenses down.                                                                         
                                                                                                                                
3:18:52 PM                                                                                                                    
                                                                                                                                
RICK DAVIS,  CEO, Central  Peninsula Hospital, directed  attention                                                              
to slide  18, "Central  Peninsula Hospital,"  and summarized  that                                                              
Central  Peninsula  was a  49  bed  acute  care hospital,  with  8                                                              
outpatient  clinics, and a  60 bed  long term  care facility.   He                                                              
noted that  there were 720  employees, with 25  MDs.  He  moved on                                                              
to slide  19, "Who Do  We Serve," and  listed the primary  service                                                              
area to  be the 37,000  residents from  Cooper Landing  to Nikiski                                                              
to Kenai to Clam  Gulch.  He listed the secondary  service area of                                                              
50,000 residents  to include Seward,  Homer, and the  entire Kenai                                                              
Peninsula.  He reported  that the hospital was owned  by the Kenai                                                              
Peninsula   Borough  and   managed  through   a  lease   operating                                                              
agreement.                                                                                                                      
                                                                                                                                
3:20:31 PM                                                                                                                    
                                                                                                                                
MR. DAVIS  stated that  Central Peninsula  Hospital was  community                                                              
owned, with 25  staff and 25 independent physicians,  and a strong                                                              
ownership   culture,   slide   20,   "Sources   of   Pride/Special                                                              
Challenges."   He  pointed  to  competing entities  attempting  to                                                              
take  over the  profitable services  as the  biggest challenge  to                                                              
the hospital.                                                                                                                   
                                                                                                                                
3:21:29 PM                                                                                                                    
                                                                                                                                
MR. DAVIS  directed attention  to slide  21, "Going Forward,"  and                                                              
discussed  each of  the following:   preparation  for the  federal                                                              
health   care  reform,   hardwiring   the   quality  and   patient                                                              
satisfaction   process,   implementing   the   Electronic   Health                                                              
records,  and  exploring  contracting   possibilities  beyond  the                                                              
hospital services.                                                                                                              
                                                                                                                                
3:22:41 PM                                                                                                                    
                                                                                                                                
MR. DAVIS  addressed slide 23,  "Two Specific Categories  of Value                                                              
Based Purchasing,"  and detailed that quality of  care and patient                                                              
satisfaction would  determine the reimbursement from  Medicaid and                                                              
Medicare.  He  explained that this was designed  to shift hospital                                                              
care delivery  from  a quantity  base to a  quality service  base.                                                              
He  stated  that  there  were  17   process-of-care  measures  for                                                              
quality service included in the five core measure categories.                                                                   
                                                                                                                                
3:24:55 PM                                                                                                                    
                                                                                                                                
MR.  DAVIS detailed  slides 24  and 25,  "Core Measures,"  listing                                                              
the five core  measures:  heart failure, heart  attack, pneumonia,                                                              
health   care    associated   infections,   and    surgical   care                                                              
improvement.    He  clarified  that   these  core  measures  would                                                              
account for  70 percent of  the hospital's value  based purchasing                                                              
payment.  He shared  that the remaining 30 percent  would be based                                                              
on  eight  patient  satisfaction  measures.    He  stated  that  1                                                              
percent  of the  Medicare  payment would  be  based on  compliance                                                              
with these  two measures.   He reported  that these  measures were                                                              
evidence  based,  best  demonstrated   practices  which  had  been                                                              
proven to lower  infections and hospital medication  errors, while                                                              
increasing quality outcomes.                                                                                                    
                                                                                                                                
3:26:51 PM                                                                                                                    
                                                                                                                                
MR. DAVIS  pointed to  the graph on  slide 27, "Central  Peninsula                                                              
Hospital Perfect  Care Scores,"  depicting the quarterly  hospital                                                              
scores  for  patient  care.   He  stated  that  the goal  for  the                                                              
hospital  had  been  for  a 95  percent  rating,  which  had  been                                                              
consistently maintained for the past three years.                                                                               
                                                                                                                                
MR. DAVIS  listed the eight  measures for patient  satisfaction on                                                              
slide 28, "Patient  Experience," and stated that  this information                                                              
was  available on-line.   Referring  to slide  29, "Strategies  to                                                              
Improve the  Patient Experience,"  he affirmed  that the  hospital                                                              
administration  reviewed every patient  satisfaction survey,  with                                                              
follow  up  phone calls  to  address  any  patient concerns.    He                                                              
shared that hourly  nursing rounds had been implemented,  and that                                                              
the management team also made rounds.                                                                                           
                                                                                                                                
3:28:37 PM                                                                                                                    
                                                                                                                                
MR. DAVIS  moved on  to slide 30,  "Percentage of Patients  Rating                                                              
the Hospital  9 or  10," a bar  graph comparing Central  Peninsula                                                              
Hospital with the U.S. and Alaska averages.                                                                                     
                                                                                                                                
3:29:10 PM                                                                                                                    
                                                                                                                                
MR. DAVIS  furnished slide 31,  "Awards and Recognition,"  calling                                                              
it the  "bragging awards  and recognitions  slide."  He  confirmed                                                              
that Central Peninsula  Hospital had been named a  top hospital in                                                              
core  measure compliance  in  the State  of  Alaska in  2011.   He                                                              
opined that  the Patient  Protection and  Affordable Care  Act was                                                              
refocusing delivery systems toward good quality service.                                                                        
                                                                                                                                
3:30:27 PM                                                                                                                    
                                                                                                                                
ROBERT LETSON,  CEO, South Peninsula  Hospital, confirmed  that he                                                              
had been  in hospital administration  for 35 years, with  the last                                                              
4 years  as  the CEO  at South  Peninsula Hospital.   He  directed                                                              
attention to slide  32, "South Peninsula Hospital  Homer, Alaska,"                                                              
summarizing that the  hospital had 22 acute beds  and 28 long-term                                                              
beds, was a non-profit  owned by the Kenai Peninsula  Borough, and                                                              
had 285  employees with an  annual payroll  of $16.5 million.   He                                                              
shared that  there were  22 active physicians  working in  the two                                                              
family  practice  clinics,  the   two  surgery  clinics,  and  the                                                              
orthopedic clinic.   He reported that there were an  average of 10                                                              
patients daily in  the acute care, 26 patients daily  in the long-                                                              
term care, and  more than 29,000 outpatients annually.   Moving on                                                              
to slide  33, "Who  Do We  Serve," he  explained that  the service                                                              
for 12,700  residents covered  an area of  8317 square miles.   He                                                              
noted  that it was  75 miles  to the  next closest  hospital.   He                                                              
relayed that  the senior population  was growing  at a rate  of 25                                                              
percent,  faster  than  the  state   and  national  average.    He                                                              
detailed  the  payer  mix  to be  33  percent  from  Medicare,  32                                                              
percent by  commercial insurance,  24 percent  from Medicaid,  and                                                              
11 percent from either charity or self pay.                                                                                     
                                                                                                                                
3:33:47 PM                                                                                                                    
                                                                                                                                
MR. LETSON  stated that South  Peninsula Hospital was  the largest                                                              
employer  on the southern  peninsula and  its economic  multiplier                                                              
translated to a  $96 million impact in the local  community, slide                                                              
34,  "Economic Impact."   He  reported  on a  recent Alaska  State                                                              
Hospital and  Nursing Home  Association (ASHNA) community  benefit                                                              
study which found  that Alaska hospitals supplied  $151 million in                                                              
community  benefits.    He  stated  that, in  2011,  the  cost  of                                                              
charity care at the hospital had been $789,000.                                                                                 
                                                                                                                                
3:35:26 PM                                                                                                                    
                                                                                                                                
MR.  LETSON introduced  slide  35, "Special  Challenges,"  listing                                                              
recruitment  and   staffing  for  pharmacists,   nurses,  physical                                                              
therapists,  lab technicians, psychiatrists,  and family  practice                                                              
physicians  as   ongoing  major  hurdles.     He  stated   that  a                                                              
psychiatric  residency program  would  be a  boon, as  psychiatric                                                              
issues were  15 percent of the  emergency room visits.   He stated                                                              
that the mandatory  requirement for electronic health  records was                                                              
burdensome for small  hospitals.  He pointed to  the stress placed                                                              
on  the  long term  care  facility  by  an aging  population  with                                                              
multiple  complex  diagnoses.    He  discussed  the  challenge  of                                                              
rising energy  costs, and  reported that a  change to  natural gas                                                              
power would save  $300,000 annually for South  Peninsula Hospital.                                                              
He  shared that  inconsistent patient  volume  in small  hospitals                                                              
resulted in  a drop in  revenue, while  costs remained fixed.   He                                                              
called attention  to the community  support for the hospital  as a                                                              
major source of pride.                                                                                                          
                                                                                                                                
3:39:00 PM                                                                                                                    
                                                                                                                                
MR. LETSON  reviewed slide  36, "Going  Forward," stating  "change                                                              
is the new  norm" due to health  care reform.  He  emphasized that                                                              
this was  the only  way that  hospitals would  survive in  the new                                                              
climate  of "more  service for  less reimbursement."   He  pointed                                                              
out that  reimbursement would  now be  based on quality  measures,                                                              
and not just on  a provided service and that it  was essential for                                                              
alignment  between physicians  and providers.   He projected  that                                                              
there would  be an increase in  outpatient clinics and  a decrease                                                              
for  in-patient services,  observing  that the  growing number  of                                                              
seniors could alter that trend.                                                                                                 
                                                                                                                                
3:40:07 PM                                                                                                                    
                                                                                                                                
MR. LETSON  offered slides 37  and 38, "Critical  Access Hospital-                                                              
CAH,"  and  disclosed   that  there  were  1300   critical  access                                                              
hospitals in the  U.S.  Noting that CAHs were  designated in 1997,                                                              
he listed  the requirements,  which included  location in  a rural                                                              
area, more than  35 miles from another hospital; and,  25 or fewer                                                              
beds, with an  average length of stay  of less than 96  hours.  It                                                              
must also have  24 hour emergency service, participate  in a rural                                                              
health   network,   and  establish   credentialing   and   quality                                                              
assurance agreements  with a larger  hospital.  He  confirmed that                                                              
CAHs were  paid 101  percent of reasonable  costs, instead  of the                                                              
usual prospective  payment system  which reimbursed  by diagnosis.                                                              
He reported  that most  CAHs had a  low operating margin,  usually                                                              
2-3 percent, although in Alaska this could be 5 percent.                                                                        
                                                                                                                                
3:42:15 PM                                                                                                                    
                                                                                                                                
MR.  LETSON shared  that, in  2011, South  Peninsula Hospital  was                                                              
recognized  as one  of  the "Top  100 Critical  Access  Hospitals"                                                              
nationwide  by the  National Rural  Health Care  Association.   He                                                              
declared the  CAH to be an  economic engine in  small communities,                                                              
as they  offered a broad  scope of health  care to  many citizens.                                                              
He opined  that any reduction for  reimbursement to CAHs  could be                                                              
disastrous for the local economy and rural health care.                                                                         
                                                                                                                                
3:44:22 PM                                                                                                                    
                                                                                                                                
LIZ  WOODYARD,  CEO, Petersburg  Medical  Center,  explained  that                                                              
Petersburg  Medical Center was  not similar  to other  CAHs, slide                                                              
40,  "Petersburg Medical  Center,"  as there  were  many areas  of                                                              
challenge.   She explained that  the hospital was  non-profit, and                                                              
although  it  was owned  by  the  city,  it  did not  receive  any                                                              
financial support  from the city.   She stated that 70  percent of                                                              
the  operating  budget was  for  labor,  and that  recruitment  of                                                              
physicians  was  a  challenge.    She  noted  that  there  were  4                                                              
physicians,  as   it  was  necessary  for  cycled   time,  and  95                                                              
employees.    She  reported  that the  acute  daily  care  patient                                                              
average  was less than  1, but  the long-term  care daily  patient                                                              
average was 13.   She explained that the swing  care daily average                                                              
for those  patients who  were not  long term  care, but  not quite                                                              
ready to go home, was 3 patients.                                                                                               
                                                                                                                                
3:48:32 PM                                                                                                                    
                                                                                                                                
MS. WOODYARD,  discussing slide  41, "Who  Do We Serve,"  reported                                                              
that although  the population of  the Petersburg region  was 3000,                                                              
there  had been  an 8  percent population  decline  in the  region                                                              
since  2000, with  a corresponding  27 percent  decline in  school                                                              
enrollment.    She  stated  that  there were  not  as  many  young                                                              
families  staying in  Petersburg.   She  declared that  commercial                                                              
fishing  was the biggest  industry.   She noted  that the  medical                                                              
center had 12 acute  care and 15 long term care  beds.  She stated                                                              
that  long term  care  financially  supported the  other  hospital                                                              
services.                                                                                                                       
                                                                                                                                
3:49:41 PM                                                                                                                    
                                                                                                                                
MS.  WOODYARD  described  the  services  offered  by  the  medical                                                              
center to  include physical  therapy, wound  care, home  health in                                                              
the  community, and  chemotherapy, slide  42, "Petersburg  Medical                                                              
Center."   She explained the  difficulty of not  offering services                                                              
in ICU,  OB deliveries, and  anesthesia, declaring that  this lack                                                              
of service  affected whether young  families moved  to Petersburg.                                                              
She noted  that a  lack of  patients in  OB, OR,  and ICU  did not                                                              
allow nurses to gain the necessary competencies.                                                                                
                                                                                                                                
3:53:44 PM                                                                                                                    
                                                                                                                                
MS. WOODYARD  declared that  although Petersburg  was a  wonderful                                                              
community,  the  financial  stability   of  the  hospital  was  in                                                              
jeopardy,  slide  43, "Special  Challenges."   She  announced  the                                                              
financial loss to  be $800,000 in the last year.   She shared that                                                              
there was  a reserve of $3.7  million, but that  financials needed                                                              
to turn  around.  She  noted that the key  was for an  increase of                                                              
patients.  She declared  the need for a new roof  on the long term                                                              
care  facility, as  it was  more than  50 years  old, leaked,  and                                                              
could not  be patched.  She  stated that the  architectural design                                                              
would cost  $70,000.   She confirmed another  challenge to  be for                                                              
replacement  of broken  equipment,  as shipping  and  installation                                                              
schedules could often  delay these projects.  She  emphasized that                                                              
all the employees were proud to be working at the hospital.                                                                     
                                                                                                                                
3:56:06 PM                                                                                                                    
                                                                                                                                
MILLIE   DUNCAN,   Administrator,   Wildflower   Court,   directed                                                              
attention  to  slide  44, "Wildflower  Court,"  stating  that  the                                                              
nursing home was  a non-profit organization, was  not connected to                                                              
Bartlett Hospital,  and had  opened in 1977.   Moving on  to slide                                                              
45, "Who  Do We  Serve," she  reported  that, as  this was one  of                                                              
only two assisted  living programs in Juneau, there  was a younger                                                              
population at Wildflower  Court, and more physically  capable than                                                              
the state and national averages.                                                                                                
                                                                                                                                
3:57:56 PM                                                                                                                    
                                                                                                                                
MS. DUNCAN  addressing slide  46, "Who Do  We Serve,"  shared that                                                              
66  percent of  admissions were  for  rehabilitation services  and                                                              
wound care, with  55 percent of the residents  being discharged to                                                              
home  care after  2  months at  Wildflower  Court.   Referring  to                                                              
slide 47,  "Economic Impact," she  reported that  Wildflower Court                                                              
employed 105  staff with  a payroll,  including benefits,  of $6.7                                                              
million.   She  stated  that $172,000  was  paid for  professional                                                              
contract  services, and  that  $1 million  was  spent locally  for                                                              
supplies and  equipment.  She  declared that Wildflower  Court had                                                              
57  beds  and  could  provide  services  for  an  average  of  100                                                              
individuals each year.                                                                                                          
                                                                                                                                
3:59:05 PM                                                                                                                    
                                                                                                                                
MS. DUNCAN  summarized slide  48, "Special Challenges,"  declaring                                                              
that the  complexity of  the residents'  conditions and  diagnosis                                                              
was increasing,  and pointing to  the growing number  of residents                                                              
with mental  health diagnosis, including dementia,  schizophrenia,                                                              
and depression.   She  established that the  majority of  staff at                                                              
Wildflower Court  were certified nursing assistants,  with only 13                                                              
weeks  of training  for  dealing with  these  complex medical  and                                                              
mental health  issues.  She  affirmed the necessity  for providing                                                              
a  quality of  life  for a  relatively young  population,  sharing                                                              
that "trying  to do bingo  or big band  sing along  for activities                                                              
just doesn't cut it for our population."                                                                                        
                                                                                                                                
4:01:52 PM                                                                                                                    
                                                                                                                                
MS.  DUNCAN proudly  stated  that Wildflower  Court  had, for  two                                                              
years, received  the Bronze Quality  Award by the  American Health                                                              
Care  Association,  and  was  nationally  ranked  in  the  top  10                                                              
percent  for  staff,  resident,  and  family  satisfaction.    She                                                              
mentioned  that  the  program had  twice  received  the  Mountain-                                                              
Pacific Quality  award and  also participated  in a program,  "The                                                              
Eden Alternative,"  which  developed a community,  rather  than an                                                              
institution,  within  a  nursing   home,  slide  49,  "Sources  of                                                              
Pride."  She observed  that the ultimate, long term  goals were to                                                              
receive the  Malcolm Baldridge Quality  Award, the  Well Workplace                                                              
Award, and  the Employer of  Choice Award,  as shown on  slide 50,                                                              
"Going Forward."   She  stated that the  journey was  important to                                                              
both the staff and the residents of Wildlife Court.                                                                             
                                                                                                                                
4:03:26 PM                                                                                                                    
                                                                                                                                
MS. DUNCAN shared a definition for nursing homes:                                                                               
                                                                                                                                
     The  nursing homes  of the  past  may once  have been  a                                                                   
     retirement  home for the unhealthy  but today  they have                                                                   
     evolved into  highly skilled  medical centers serving  a                                                                   
       very different population with complicated medical                                                                       
     issues needing treatment for longer periods than what                                                                      
     is practical in a hospital.                                                                                                
                                                                                                                                
MS.  DUNCAN, directing  attention  to  slide 52,  "Nursing  Homes:                                                              
Confronting  Today's Challenges,"  stated  that, as  one in  seven                                                              
residents  of  nursing  homes  is  under 65,  an  increase  of  22                                                              
percent  in the  last eight  years, the  psychological and  social                                                              
needs  were a  greater challenge  than  the physical  needs.   She                                                              
stated that  half of the residents  had dementia,  Alzheimer's, or                                                              
a related disorder,  while one third had behavior  disorders.  She                                                              
shared that  research studies showed  that nursing  homes provided                                                              
better  care for  individuals with  pneumonia  or infections,  and                                                              
that  nursing  home   residents,  when  admitted   to  acute  care                                                              
hospitals, often  returned to the nursing home  "more functionally                                                              
and cognitively impaired."                                                                                                      
                                                                                                                                
CHAIR KELLER asked the panel to state the most immediate needs.                                                                 
                                                                                                                                
4:07:09 PM                                                                                                                    
                                                                                                                                
MR. POWERS,  in response,  stated that  typically health  care was                                                              
thought of  in terms  of cost,  quality and  access.   He directed                                                              
attention  toward  two  small,  specific  programs,  perioperative                                                              
nursing   and  psychiatric   residency.     Explaining  that   the                                                              
perioperative  nursing program  was an  effort to  train the  next                                                              
generation  of  nurses  in  Operating  Room  (OR)  procedures,  he                                                              
declared  a  need  for  an additional  $85,000  in  funding.    He                                                              
pointed  out  that  the hospital  industry  had  already  supplied                                                              
$375,000  toward  the  program.    He  explained  that  the  three                                                              
Anchorage medical  centers had  set up the  program for  the "best                                                              
and the brightest  from the facilities to come in,  train, go back                                                              
to the  communities, and train  for an  additional 27 weeks."   He                                                              
cited that the  University of Alaska nursing program  was "a great                                                              
process,  but now  what  happens is,  within  the hospital,  these                                                              
specialty  areas ...  need special  training."   He declared  "the                                                              
WWAMI  [Washington,  Wyoming,  Alaska,  Montana,  and  Idaho  Area                                                              
Health Education  Center] program  had been a wonderful  workforce                                                              
engine"  as residents  were returning  to  their communities,  but                                                              
that  psychiatry was  needed  for many  vulnerable  patients.   He                                                              
declared  that this  request  for  $75,000 would  allow  residency                                                              
sites, through  the WWAMI  program, to  be established  throughout                                                              
Alaska.                                                                                                                         
                                                                                                                                
4:10:07 PM                                                                                                                    
                                                                                                                                
MS.  DUNCAN agreed  with  the need  for  the psychiatric  program,                                                              
explaining  that it  was essential,  though  often difficult,  for                                                              
Wildflower   Court  to   receive   psychiatric  consultation   for                                                              
direction to best serve its residents.                                                                                          
                                                                                                                                
4:11:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DICK  observed that this need for  psychiatric help                                                              
was  a  statewide  issue, probably  necessitating  more  than  one                                                              
travelling psychiatrist.                                                                                                        
                                                                                                                                
4:12:48 PM                                                                                                                    
                                                                                                                                
MR. LETSON  observed that  his family  doctors and emergency  room                                                              
staff  had  reported  that  20   percent  of  their  patients  had                                                              
psychiatric  issues in  addition  to their  other  illnesses.   He                                                              
declared  that many  doctors  remained  where they  had  performed                                                              
their medical  residency.  He  suggested that tele-medicine  might                                                              
also provide solutions for remote areas.                                                                                        
                                                                                                                                
4:13:`57 PM                                                                                                                   
                                                                                                                                
MR.  POWERS  agreed   with  Representative  Dick   that  this  was                                                              
critical  for all  the  hospitals, especially  for  the long  term                                                              
care facilities.   He  agreed that a  psychiatric residency  was a                                                              
good  idea,   explaining  that  Bartlett  Memorial   Hospital,  in                                                              
Juneau,  had   hired  psychiatrists  and  then   contracted  their                                                              
services  with  outpatient agencies.    He  pointed out  that  the                                                              
hospital  could offer  a  better benefit  package  than a  smaller                                                              
agency, with a more flexible schedule.                                                                                          
                                                                                                                                
4:15:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MILLER  asked what was driving this  cost explosion                                                              
in  every aspect  of  health care  over  the last  30  years.   He                                                              
declared that  this cost increase  was much greater than  the rate                                                              
of inflation.  He asked what could be done to control this.                                                                     
                                                                                                                                
4:17:13 PM                                                                                                                    
                                                                                                                                
MR. POWERS  replied that labor  and capital depreciation  were the                                                              
most  expensive   issues.    He   stated  that  an   alignment  of                                                              
physicians  and hospitals  would  bring a  co-ordination of  care,                                                              
and efficiencies  for recruitment and retention.   This would have                                                              
a  significant  impact  on  costs,   and  would  "help  bend  that                                                              
exorbitant  cost curve."    He declared  that  the embracement  of                                                              
technology would  lower costs, but  that some older  staff members                                                              
were threatened by the new technology.                                                                                          
                                                                                                                                
4:19:22 PM                                                                                                                    
                                                                                                                                
MR. LETSON stated  that the salaries and benefits  were 60 percent                                                              
of the costs  at South Peninsula  Hospital.  He declared  that the                                                              
medical home concept,  when a family doctor was  the gatekeeper to                                                              
procedures  and  had  incentive  to keep  the  patient  well,  was                                                              
necessary to  get control of the  costs.  He stated,  "Health care                                                              
is  insatiable.   There's  all kinds  of  health  care needs,  and                                                              
unless someone's  trying to keep  people well, it will  never slow                                                              
down  enough...."   He reported  that conditions  such as  obesity                                                              
and diabetes  were getting  worse, and,  instead of just  treating                                                              
the episode, incentives were needed to stay healthy.                                                                            
                                                                                                                                
4:22:04 PM                                                                                                                    
                                                                                                                                
KAREN  PERDUE,  President/CEO,  Alaska State  Hospital  &  Nursing                                                              
Home  Association  (ASHNHA), in  response  to Chair  Keller,  said                                                              
that  ASHNA represented  all the  hospitals and  nursing homes  in                                                              
Alaska, except two in Barrow.                                                                                                   
                                                                                                                                
4:22:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DICK  asked if the  proposed Indian  Health Service                                                              
(IHS) facility would affect Central Peninsula Hospital.                                                                         
                                                                                                                                
4:22:39 PM                                                                                                                    
                                                                                                                                
MR.  DAVIS, in  response,  said  that he  had  heard the  facility                                                              
would  not be  available  for  non-beneficiary participants.    He                                                              
agreed   to   keep   the  committee   apprised   of   any   future                                                              
developments.                                                                                                                   
                                                                                                                                
4:23:19 PM                                                                                                                    
                                                                                                                                
CHAIR KELLER expressed  concern with the short term  costs for the                                                              
perioperative  nurses  program.    He declared  a  need  for  more                                                              
competition.                                                                                                                    
                                                                                                                                
4:24:58 PM                                                                                                                    
                                                                                                                                
MR. LETSON emphasized  the importance for the Certificate  of Need                                                              
program.   He explained that hospitals  did not function  under an                                                              
economic  model of  "more  competition  is better."    He gave  an                                                              
example of  a competing specialty  center, pointing out  that only                                                              
a few  departments created  revenue for a  hospital.   "If someone                                                              
cherry  picks   those  services   away  from  the   hospital,  the                                                              
hospital's left  with the  charity care, bad  debt, and  they lose                                                              
the paying  services, and  they either lose  their hospital  or it                                                              
becomes a band-aid  station or the taxes go up  for the citizens."                                                              
He  stressed   the  importance   for  Certificate   of  Need,   as                                                              
duplication  of  the  most profitable  services  could  destroy  a                                                              
local health  care system.   He opined  that smaller  hospitals in                                                              
Alaska would be destroyed without the Certificate of Need.                                                                      
                                                                                                                                
4:27:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON,  reflecting on  the long term  solution for                                                              
preventive  medicine,  referred  to  House  Concurrent  Resolution                                                              
(HCR) 5,  which passed unanimously  during 2011.  He  relayed that                                                              
the  resolution  calls on  the  State of  Alaska  to  embark on  a                                                              
prevention of disease  model for health care.  He  shared that the                                                              
resolution  also provides  awareness for  the benefits of  Vitamin                                                              
D.    He   directed  attention  to  the  Fraser   Health  [British                                                              
Columbia]  health care  residential  provider  program, which  had                                                              
adopted  a protocol  of 20,000  IU  of Vitamin  D each  week.   He                                                              
noted that the goal  of this protocol was to reduce  the number of                                                              
fractures by  10 -  25 percent, pointing  out that the  prevention                                                              
of one fracture  would pay the annual cost for  the entire Vitamin                                                              
D program.    He asked  if the  nursing homes  and hospitals  were                                                              
aware of HCR 5  and the Vitamin D studies.  He listed  some of the                                                              
attributes  cited  for Vitamin  D,  which  included a  30  percent                                                              
decrease  for Type  2 diabetes,  and  significant improvement  for                                                              
seasonal  affective  disorder.     He  offered  an  example  of  a                                                              
required regimen of  10,000 IU of Vitamin D for the  10 days prior                                                              
to elective  orthopedic surgery,  which resulted  in a  50 percent                                                              
reduction in infection.                                                                                                         
                                                                                                                                
4:31:55 PM                                                                                                                    
                                                                                                                                
MS.   DUNCAN  reported   that,  although   the  Wildflower   Court                                                              
dietician, medical  director, and staff  were in agreement  to the                                                              
benefits  of Vitamin D  use, and  a regimen  had been started  for                                                              
all the  residents, she could not  substantiate any results.   She                                                              
opined that  a reduction  in the need  for psychoactive  drugs was                                                              
attributable,  in part,  to Vitamin  D.   She  offered her  belief                                                              
that most  of the patient  falls were a  result of  poor judgment,                                                              
caused when residents leaned too far.                                                                                           
                                                                                                                                
4:34:04 PM                                                                                                                    
                                                                                                                                
CHAIR KELLER  asked for a prediction  to the determination  by the                                                              
U.S.  Supreme Court  for  the  Patient Protection  and  Affordable                                                              
Care Act.                                                                                                                       
                                                                                                                                
4:34:44 PM                                                                                                                    
                                                                                                                                
MR.  POWERS,   in  response,  predicted   that,  except   for  the                                                              
individual mandate, the act would pass.                                                                                         
                                                                                                                                
MR. LETSON emphasized  that health care was not  sustainable as it                                                              
is, so  a course of  action will  need to be  taken.   He declared                                                              
that the  challenge  was ahead of  us, regardless  of the  Supreme                                                              
Court decision.                                                                                                                 
                                                                                                                                
4:35:39 PM                                                                                                                    
                                                                                                                                
MR.  DAVIS offered  his  belief that  the  incentives driving  the                                                              
Patient  Protection  and Affordable  Care  Act  were the  same  as                                                              
those  issues  just  discussed.     He  opined  that  the  quality                                                              
initiatives  in  the  act  would   "provide  better  outcomes  for                                                              
everyone."   He shared  that the  concepts might need  adjustment,                                                              
but that  it was necessary  to clinically integrate  the physician                                                              
and the  hospital.  He referenced  an earlier presentation  he had                                                              
attended by Commissioner  Streur (Department of Health  and Social                                                              
Services)    and    Commissioner     Hultberg    (Department    of                                                              
Administration)  which  compared  the  significant  difference  in                                                              
charges  by physicians  in Alaska  to those by  physicians  in the                                                              
State of  Washington.   He declared a  need for motivation  toward                                                              
change, and he expressed his agreement that the act would pass.                                                                 
                                                                                                                                
4:37:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON,  returning to  discussion of HCR  5, stated                                                              
that  the main  purpose of  the resolution  was to  move toward  a                                                              
prevention  model  for health  care.    He directed  attention  to                                                              
national studies  for the use of  check lists in  hospitals, which                                                              
resulted in  a dramatic lowering of  infections.  He asked  if the                                                              
hospitals  and  nursing  homes  in Alaska  used  check  lists  for                                                              
procedures.                                                                                                                     
                                                                                                                                
4:38:15 PM                                                                                                                    
                                                                                                                                
MR. LETSON,  in response,  said that  hospitals used check  lists,                                                              
with many surgeries  scheduling a time out prior  to the procedure                                                              
in  order  to  double  check.    He  shared  that  evidence  based                                                              
medicine  had check  lists  for complex  procedures.   He  allowed                                                              
that although  this  standard was  not yet complete,  it was  more                                                              
prevalent for complex procedures.                                                                                               
                                                                                                                                
4:39:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON referenced  a study  which determined  that                                                              
infection  rates were  lower  when check  lists  were used  during                                                              
catheter  procedures.    He  expressed   a  desire  for  the  full                                                              
integration of check lists and other preventive methods.                                                                        
                                                                                                                                
4:40:31 PM                                                                                                                    
                                                                                                                                
CHAIR KELLER,  offering a  final thought  on the upcoming  [health                                                              
care]  crisis,  referred  to  an ISER  [Institute  of  Social  and                                                              
Economic Research]  study which compared the spending  [for health                                                              
care]  to the cumulative  wages  for all Alaskans,  and stated  "I                                                              
know I don't spend  half my income on health care,  and I do spend                                                              
some,  so  the  point  that  hit home  with  me  because  of  that                                                              
comparison is  that the difference,  all that money that  is being                                                              
spent, is evident  throughout our society, construction,  spin off                                                              
jobs,  whatever..."   He  declared  that  the U.S.  Supreme  Court                                                              
decision  did  not   matter,  as  there  was  a   greater  crisis,                                                              
especially for those with the least ability to pay.                                                                             
                                                                                                                                
4:42:06 PM                                                                                                                    
                                                                                                                                
MR.   POWERS  paraphrased   comments   by  Commissioner   Hultberg                                                              
(Department of Administration) during an earlier presentation:                                                                  
                                                                                                                                
     don't tell  me about all  these jobs you're  creating, I                                                                   
     consider   that  an  opportunity   cost.    What   about                                                                   
     everything  else we've  gotta  do.   We're putting  this                                                                   
     money into health  care and we could be  doing something                                                                   
     else.                                                                                                                      
                                                                                                                                
MR.  POWERS  offered  his  belief  that  this  was  "an  excellent                                                              
philosophic suggestion."   He questioned the point  of balance for                                                              
health  care  spending  in  Alaska and  keeping  services  in  the                                                              
state, noting  that Commissioner  Hultberg had responded  to "keep                                                              
the  dialogue  going."    He  expressed   his  gratitude  for  the                                                              
opportunity  to present with  the committee,  and in reference  to                                                              
the current  health care  spending, he declared  "we know  this is                                                              
unsustainable."                                                                                                                 
                                                                                                                                
4:43:32 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Health and Social Services Standing Committee meeting was                                                                       
adjourned at 4:43 p.m.                                                                                                          

Document Name Date/Time Subjects
PP_House_2-24-12 Final ASHNA.pptx HHSS 3/1/2012 3:00:00 PM