Legislature(2013 - 2014)CAPITOL 106
02/28/2013 03:00 PM House HEALTH & SOCIAL SERVICES
| Audio | Topic |
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| Start | |
| Presentation: Alaska Health Care Commission | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE
February 28, 2013
3:03 p.m.
MEMBERS PRESENT
Representative Pete Higgins, Chair
Representative Wes Keller, Vice Chair
Representative Benjamin Nageak
Representative Lora Reinbold
Representative Paul Seaton
Representative Geran Tarr
MEMBERS ABSENT
Representative Lance Pruitt
COMMITTEE CALENDAR
PRESENTATION: ALASKA HEALTH CARE COMMISSION
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
DEBORAH ERICKSON, Executive Director
Alaska Health Care Commission
Anchorage, Alaska
POSITION STATEMENT: Presented a PowerPoint titled "Alaska
Health Care Commission."
WARD HURLBURT, M.D., Chair
Alaska Health Care Commission
Chief Medical Officer/Director
Division of Public Health
Office of the Commissioner
Department of Health and Social Services
Anchorage, Alaska
POSITION STATEMENT: Testified and answered questions during the
presentation by the Alaska Health Care Commission.
ACTION NARRATIVE
3:03:06 PM
CHAIR PETE HIGGINS called the House Health and Social Services
Standing Committee meeting to order at 3:03 p.m.
Representatives Higgins, Nageak, Keller, Tarr, and Seaton were
present at the call to order. Representative Reinbold arrived
as the meeting was in progress.
^Presentation: Alaska Health Care Commission
Presentation: Alaska Health Care Commission
3:04:11 PM
CHAIR HIGGINS announced that the only order of business would be
a presentation by the Alaska Health Care Commission.
3:05:01 PM
DEBORAH ERICKSON, Executive Director, Alaska Health Care
Commission, stated that the commission had been first
established by a governor's administrative order from Governor
Palin, and then in statute in 2010. She stated that its purpose
was to provide recommendations to the governor and the
legislature on issues related to cost, quality, and
affordability of health care in Alaska, and to recommend
strategies related to improvement of health status, slide 2,
"Statutory Authority." She noted that the commission provided
an annual report each year, in January. She said that the
voting members were appointed by the Governor for three year
terms, slide 3, "Membership." She pointed out that there were
ex-officio members from the house, the governor's office, and
the senate. She talked about slide 4, "Planning Process," which
identified the vision for the future of health care in Alaska,
and the strategies to move toward the vision.
3:07:33 PM
MS. ERICKSON moved on to slide 5, "Commission's Vision," which
read: "By 2025 Alaskans will be the healthiest people in the
nation and have access to the highest quality most affordable
health care." She affirmed that this was the vision to aspire.
She identified life expectancy, percentage of population with
access to primary care, and per capita health care spending as
the measures for success.
3:08:15 PM
MS. ERICKSON discussed slide 6, "Commission Studies of Alaska's
Current Health Care System," which listed the studies to date.
She said that concerns for both cost and affordability for care
were big challenges to access to health care. She noted that
the commission was working to better understand what was driving
the increases in health care costs.
3:09:15 PM
MS. ERICKSON shared that the commission had focused on value and
improvement to the system by increasing quality in health care
services, and improving efficiency and effectiveness of
services, slide 7, "Value in Alaska's Health System." She
stated that although nationally Alaska had the second highest
per capita spending for health insurance, behind Massachusetts,
Massachusetts had the highest percentage of population with
insurance coverage, whereas Alaska was 39th. Regarding quality,
Alaska was 38th nationally, and for health outcomes, the health
of the population, Alaska was 34th nationally.
3:11:12 PM
CHAIR HIGGINS asked about the percentage of uninsured.
MS. ERICKSON explained that the census bureau conducted an
annual survey that did not consider beneficiaries of the Indian
Health Service (IHS) as having insurance coverage. If the IHS
beneficiaries were included, then 14 percent of Alaskans did not
have coverage; however, if they were not included, then 18
percent of Alaskans were considered not to have coverage.
3:12:03 PM
WARD HURLBURT, M.D., Chair, Alaska Health Care Commission, Chief
Medical Officer/Director, Division of Public Health, Office of
the Commissioner, Department of Health and Social Services,
stated that there would not be a health care commission if not
for the high cost issues, and many believed that this was the
dominant economic issue for the nation. He directed attention
to slide 8, "International Comparison of Spending on Health,
1980-2009," and said that the average per capita spending on
health care was over $9,000, and that total expenditures on
health care was about 17 percent of the gross domestic product.
He pointed out that, although the health care industry had been
adding jobs during the recent recession, a Rand Study had
connected this increase for each health care job with a loss of
0.85 jobs in manufacturing.
3:14:12 PM
DR. HURLBURT moved on to slide 9, "International Comparison of
Health Status: Life Expectancy at Birth, 2010," which depicted
that the U.S. had a lower life expectancy at birth than the
international average. He spoke about slide 10, "Comparative
Health Outcomes," and noted that infant mortality rates were
higher and average life expectancy was lower in the United
States than many other industrialized countries. He shared
slide 11, "Affordability-U.S. Cost vs. Inflation, Earnings,"
which showed that overall inflation since 1999 had only been 38
percent, while health insurance premiums had risen 172 percent
and workers' contributions to these premiums had risen 180
percent.
3:15:21 PM
DR. HURLBURT read from slide 10, "Affordability- U.S. Families:
If health insurance premiums and national wages continue to grow
at recent rates and the U.S. health system makes no major
structural changes, the average cost of a family health
insurance premium will equal 50% of household income by the year
2021 and surpass the average household income by the year 2033.
If out of pocket costs are added, the 50% threshold is crossed
in 2018 and exceeds household income by 2030."
3:16:15 PM
DR. HURLBURT presented slide 13, "Cost of Health Care in
Alaska," which was currently almost $8 billion annually, and was
projected to be $14 billion by 2020. Commenting on slide 14,
"Affordability - Alaskan Families & Employers," he declared
that, since 1982, housing costs had increased 75 percent, the
cost of living had increased 195 percent, energy had increased
260 percent, and medical care had increased 419 percent. He
observed that large and small Alaska employers were dropping
provisions of health insurance, slide 15, "Affordability-Alaskan
Employers."
3:17:36 PM
DR. HURLBURT furnished slide 16, "Sample comparisons between
States," which compared commercial insurance payments to
physician services for a sample of codes in Alaska and similar
northwest states. The costs reflected that Alaska had the
highest cost for each of the procedures. He moved on to slide
17, "Sample comparisons between States:" which compared other
services, in which Alaska was again the most expensive.
3:19:07 PM
DR. HURLBURT indicated slides 18 and 19, "Sample comparisons
within Alaska: by Payer," which listed payments through various
payers, indicating that although Medicaid was the lowest payer
in most states, Medicare was billed at the lowest rate in
Alaska, and Workman's Comp was billed at the highest rate.
3:20:45 PM
MS. ERICKSON offered slide 21, "5% of the U.S. population
required 50% of health care spending in 2009," and shared that,
nationally, a small proportion of the population used the
majority of health care service. She added that 50 percent of
the population was responsible for only 3 percent of health care
spending. She stated that this had not been specifically
investigated for spending in Alaska. She pointed out that the
Department of Administration had stated that 70 percent of
Alaska Care plan members were responsible for 6 percent of
spending, whereas 5 percent of the population was responsible
for 59 percent of the total spending. She noted that this
information was important when developing policies for keeping
people healthy, slide 22, "Focus on Health & Value." She said
this would also lead to high quality, effective care for the
mild to moderate conditions.
3:22:59 PM
REPRESENTATIVE SEATON asked if the use by 5 percent of the
population was for an annual or lifetime basis.
MS. ERICKSON replied that this percentage reflected an analysis
for health care spending in a given year.
REPRESENTATIVE SEATON asked to clarify that in any one year,
money was spent on those who were sick; however, the statistic
lead to the impression that there was one group of people who
were very expensive, when in fact, it could be anyone in any
given year.
3:24:39 PM
DR. HURLBURT agreed that this was an important observation;
however, he offered his belief from dealing with populations,
that there was a relatively small segment of the population that
had repeated costs. He opined that half of the population could
be ignored as they were users of minimal resources, but that a
smaller segment of the population did have ongoing medical
interventions.
3:25:48 PM
[Chair Higgins passed the gavel to Vice Chair Keller]
3:26:27 PM
REPRESENTATIVE SEATON expressed his desire for the information
to be presented with a separation for those who had continual
issues from those who simply had an annual, not ongoing, issue.
DR. HURLBURT expressed his agreement.
3:27:12 PM
MS. ERICKSON continued with slide 23, "Sources of $750 Billion
Annual Waste in U.S. Health Care System," which identified the
opportunities for efficiency. She said that 30 percent of
health care spending was waste, about $750 billion annually.
She identified these waste areas as unnecessary services,
inefficient care delivery, excess administrative cost, and
inflated prices.
3:28:32 PM
MS. ERICKSON said that the commission had identified some
recommendations, slide 24, "Recommended Strategies," which were
listed in eight areas.
REPRESENTATIVE REINBOLD, referring back to slide 23, asked about
the cost of waste in Alaska.
MS. ERICKSON said that it was not known if that applied in
Alaska, but if applied at the same percentage, it would be about
$2.5 billion. She returned attention to slide 24, and said the
commission wanted to ensure use of the best available evidence
for making clinical decisions, to increase the transparency for
price and quality, to review the strategy to pay for outcomes
rather than for services, to engage employers to improve
employee wellness plans, to enhance quality and efficiency of
care early in the care process, and to increase the dignity and
quality of care for terminally ill patients. She stated that a
focus on prevention and the cost cutting systems was also
important.
3:30:21 PM
REPRESENTATIVE REINBOLD asked what the specific focus on
prevention was.
MS. ERICKSON replied that she would address this.
3:31:09 PM
DR. HURLBURT addressed slide 25, "Ensure the best available
evidence is used for making decisions" and stated that the cost
of health care was about $8 billion in private sector payroll.
He reported that the State of Alaska paid about $2.3 billion for
Medicaid and state employee health insurance. He declared that
about 30 percent of provided health care was not necessary. He
offered an anecdote comparing what was medically available now
and 40 years ago. He pointed out that new equipment was used
routinely, even though often not necessary. He declared the
necessity to apply evidence to make medical coverage decisions.
He opined that, as the physician was now an educator, primary
care physicians needed to discuss the risks and the benefits
with the patient, before a collaborative decision was made.
3:37:16 PM
MS. ERICKSON declared that the next core strategy would increase
consumer and patient engagement in making their own health care
decisions if there was more access to information for price and
quality for services, slide 26, "Increase price and quality
transparency."
3:38:08 PM
REPRESENTATIVE SEATON asked if it made a difference to supply
price information as, given the current health care system in
Alaska, there was not a choice.
MS. ERICKSON affirmed that an upfront understanding of the out-
of-pocket expenses was necessary. She shared an anecdote for
having a procedure without understanding the cost or the
necessity prior to the procedure.
3:42:03 PM
REPRESENTATIVE SEATON, remarking that the majority of the
population in Alaska had insurance with preferred providers,
asked if there is really any choice for the consumer.
DR. HURLBURT, in response, stated that a goal was for more
transparency of pricing. He noted that, although health care
insurance premiums were going up, the out of pocket costs were
increasing even more. He stated that employers were often
shifting costs to keep their expenses down.
The committee took an at-ease from 3:44 p.m. to 3:54 p.m.
3:54:29 PM
[Representative Reinbold brought the committee back to order]
REPRESENTATIVE SEATON, commenting on the suggestion that costs
could better be controlled if they were provided to the
consumers, pointed out that it was more expensive for the
consumer to access facilities outside the preferred provider
networks.
DR. HURLBURT replied that there could be a variety of prices,
even within a network. The insurance company could get a lower
rate by contracting with a provider, which reduced the cost. He
offered his belief that the quality of the provider could be
assured by a large insurance company. He offered an anecdote
about the large selection of providers within a group health
program, which helped to assure quality while controlling costs.
3:58:34 PM
REPRESENTATIVE SEATON replied that he had no objection to the
preferred provider networks, but he questioned how insured
consumers could choose by price within this type of network.
DR. HURLBURT pointed out that even prices within a preferred
provider network would not be totally uniform. He acknowledged
that individuals could go out of the network for service, but
would have to pay a larger deductible and co-pay.
4:00:55 PM
MS. ERICKSON moved on to slide 27, "Pay for Value," and spoke
about the redesign of payment structures to incentivize quality,
efficiency, and effectiveness. She suggested combining a
variety of health plans in order to better leverage purchasing
power. She endorsed retention of the fee for service system,
and then the addition of payment enhancements to move toward
increased quality and efficiency.
MS. ERICKSON indicated slide 28, "Engage employers to improve
health plans and employee wellness." She recommended the
importance of price and quality transparency. She identified
the essential elements of a successful employee health
management program: support for healthy life styles, and price
sensitivity.
4:06:11 PM
The committee took a brief at-ease.
[Representative Reinbold returned the gavel to Chair Higgins]
4:06:49 PM
MS. ERICKSON continued to discuss the elements of a successful
program: proactive primary care, support for payment reform,
and price and quality transparency. She declared support for
employers in Alaska with price sensitivity, and noted that
employee wellness and health plan improvement were important
aspects for the health programs. She emphasized the need for
primary care to be easily available, in order to improve quality
and cost. She continued with slide 29, "Enhance quality and
efficiency of care on the front end," and declared the need to
recognize the value of primary care. She said that the many
countries which had lower health care spending and higher health
outcomes had a greater investment in primary health care and
more of an emphasis on generalists, as opposed to specialists
and specialty care, which drives up the health care cost. She
stated that it was necessary to promote the relationship between
patients and clinicians. She recommended that it was necessary
to support a high quality, comprehensive, coordinated trauma
care system.
4:09:52 PM
MS. ERICKSON provided another solution for improvement in health
care, slide 30, "Increase dignity and quality of care for
seriously and terminally ill patients." She said that patients
had a much greater chance of having their decisions honored if
they engaged in the early planning for end of life issues. She
indicated there was a need to improve clinician training in
palliative care and pain management. She discussed the Comfort
One program, which had a mechanism for terminally ill patients
to document their end of life wishes for first responders. She
spoke about a similar program called POLST (Physician Orders for
Life Sustaining Treatment) which was a standardized mechanism
for clinicians and patients to share decision making for
treatment, and to document those wishes. She recommended that
advance directives be made more easily accessible and available
to clinicians through an electronic registry. She offered a
suggestion for the state to pilot a project for making
palliative care more accessible to underserved populations. She
mentioned the possibility for a re-design of payment structures.
4:12:16 PM
REPRESENTATIVE SEATON asked if the commission supported the
proposed HB 44 regarding the Advance Health Care Directive
Registry.
MS. ERICKSON replied that the commission did not take a position
on legislation, either federal or state, although they would
often study issues and put out recommendations related to them.
REPRESENTATIVE SEATON asked if the commission had identified
areas that needed to be improved in proposed HB 44.
4:13:50 PM
CHAIR HIGGINS asked if the commission would respond in writing.
MS. ERICKSON offered to respond.
4:14:06 PM
MS. ERICKSON directed attention to slide 31, "Focus on
Prevention" and reported that the recommendations from the
commission included population based prevention programs for
obesity, to fund and support an increase to immunization rates,
to integrate behavioral health and primary care services, and to
support screening for a history of adverse childhood events,
substance abuse, and depression.
4:15:21 PM
REPRESENTATIVE SEATON asked if there was more data on the
history of adverse childhood experiences (ACE), other than
general knowledge, which lead to the support for screening.
DR. HURLBURT replied that he was not aware of the ACE studies
until recently. He offered his belief that the studies
originated in San Diego, although it was more of an issue for
behavioral health than for public health.
4:16:54 PM
REPRESENTATIVE SEATON expressed his concern that an assessment
for the quality of data was assumed, and not documented.
DR. HURLBURT offered for Melissa Stone, Director of Division of
Behavioral Health, to present a written response.
4:18:43 PM
MS. ERICKSON reviewed slide 32, "Build the foundation of a
sustainable health care system," declaring that this foundation
was necessary for a strong health information infrastructure and
a sustainable health workforce. She encouraged the
participation in telemedicine to increase access to care, a
hospital discharge data base, and an all-payer claims data base.
She said that care models, health care delivery systems, and
primary care were evolving, so that workforce development had
become a high priority.
CHAIR HIGGINS expressed the need for a model to encourage local
youth into the health care delivery system.
4:21:43 PM
REPRESENTATIVE SEATON asked to clarify that the community mental
health aides could not get paid under Medicaid provisions, and
if so, was there any resolution pending.
MS. ERICKSON replied that the commission had not been involved
with this. She offered her belief that one of the more advanced
levels of behavioral health aides was being reimbursed. She
offered to follow up and report back to the committee.
4:22:51 PM
CHAIR HIGGINS said that Medicaid reimbursement was based on
training, and that more training was necessary for these aides.
4:23:37 PM
MS. ERICKSON directed attention to slide 33, "Update on
Affordable Care Act," and said that, although the commission was
not prepared to evaluate the policies of the federal program, it
was necessary to understand the implications of its
implementation.
4:24:44 PM
MS. ERICKSON concluded with slide 34, "Next Steps," and
established that the commission plans for 2013 included the
continuance of study for the current health care delivery and
finance system. She declared that there would be a focus on
health insurance, cost and cost drivers, health care accounting
and pricing, hospital readmission rates, and oral health status
in Alaska. She stated that the commission would delve deeper on
price and transparency through legislation.
MS. ERICKSON, in response to Chair Higgins, said that the
commission had not done a detailed analysis of the Affordable
Care and Patient Protection Act, as the commission had only been
established shortly after the act was passed. She stated that
the commission had hired the Institute of Social and Economic
Research (ISER) for a high level impact analysis of the act.
She noted that Department of Health and Social Services was
conducting a more detailed, more current analysis. She affirmed
that the commission had done a "high level summary overview of
the different provisions in the act," which was included as a
narrative description of the major components in its 2010
report.
4:28:44 PM
CHAIR HIGGINS asked if Ms. Erickson would return and present an
overview of the Patient Protection and Affordable Care Act.
4:29:11 PM
REPRESENTATIVE SEATON referred to page 8 of the "Core Strategies
& Policy Recommendations," [Included in members' packets] and
asked about the "Focus on Prevention." Noting that there was
one recommendation from 2009, and four recommendations from
2011, he asked if there would be more recommendations going
forward.
MS. ERICKSON replied that all of the commission's
recommendations were still considered current, although some had
been implemented. She explained that this current commission
had been established in statute, and had voted to adopt the 2009
recommendations of the previously appointed commission. She
pointed out that each of these recommendations could be
referenced in the annual report of the same date.
4:31:27 PM
REPRESENTATIVE SEATON asked to clarify that there had not been
any Focus on Prevention recommendations in 2012.
MS. ERICKSON replied "that's correct."
4:32:17 PM
ADJOURNMENT
There being no further business before the committee, the House
Health and Social Services Standing Committee meeting was
adjourned at 4:32 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Alaska Health Care Commission.pdf |
HHSS 2/28/2013 3:00:00 PM |
Alaska Health Care Commission |
| H HSS 02-28-13 FINAL.pdf |
HHSS 2/28/2013 3:00:00 PM |
Alaska Health Care Commission |
| HC Commission Strategies & Recommendations thru 2012.pdf |
HHSS 2/28/2013 3:00:00 PM |
Alaska Health Care Commission |