02/24/2025 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Informational Hearing on Private Equity in Healthcare | |
| HB23 | |
| HB34 | |
| Presentation(s): Informational Hearing on Private Equity in Healthcare | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 23 | TELECONFERENCED | |
| += | HB 34 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
February 24, 2025
3:16 p.m.
DRAFT
MEMBERS PRESENT
Representative Zack Fields, Co-Chair
Representative Carolyn Hall, Co-Chair
Representative Ashley Carrick
Representative Robyn Niayuq Burke
Representative Dan Saddler
Representative Julie Coulombe
Representative David Nelson
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Andrew Gray
COMMITTEE CALENDAR
PRESENTATION(S): INFORMATIONAL HEARING ON PRIVATE EQUITY IN
HEALTHCARE
- HEARD
HOUSE BILL NO. 23
"An Act relating to the definition of 'employer' for the
purposes of the State Commission for Human Rights."
- HEARD & HELD
HOUSE BILL NO. 34
"An Act establishing the Alaska Innovation Council; and relating
to financial disclosures for members of the Alaska Innovation
Council."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 23
SHORT TITLE: APPLICABILITY OF HUMAN RIGHTS COMMISSION
SPONSOR(s): REPRESENTATIVE(s) JOSEPHSON
01/22/25 (H) PREFILE RELEASED 1/10/25
01/22/25 (H) READ THE FIRST TIME - REFERRALS
01/22/25 (H) L&C, FIN
02/19/25 (H) L&C AT 3:15 PM BARNES 124
02/19/25 (H) Heard & Held
02/19/25 (H) MINUTE(L&C)
02/24/25 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 34
SHORT TITLE: AK INNOVATION COUNCIL
SPONSOR(s): REPRESENTATIVE(s) HOLLAND
01/22/25 (H) PREFILE RELEASED 1/10/25
01/22/25 (H) READ THE FIRST TIME - REFERRALS
01/22/25 (H) L&C, FIN
01/29/25 (H) L&C AT 3:15 PM BARNES 124
01/29/25 (H) <Bill Hearing Canceled>
02/10/25 (H) L&C AT 3:15 PM BARNES 124
02/10/25 (H) Heard & Held
02/10/25 (H) MINUTE(L&C)
02/14/25 (H) L&C AT 3:15 PM BARNES 124
02/14/25 (H) Heard & Held
02/14/25 (H) MINUTE(L&C)
02/24/25 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
STEVE COMPTON, MD, Cardiac Electrophysiologist
Alaska Heart and Vascular Institute
Anchorage, Alaska
POSITION STATEMENT: Co-offered the Informational Hearing on
Private Equity in Healthcare presentation.
MARY ANN FOLAND, MD
Orthopedic Physicians of Anchorage Primary Care
Anchorage, Alaska
POSITION STATEMENT: Co-offered the Informational Hearing on
Private Equity in Healthcare presentation.
REPRESENTATIVE ANDY JOSEPHSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, he answered questions
during the hearing on HB 23.
KEN ALPER, Staff
Representative Andy Josephson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
23 on behalf of Representative Josephson, prime sponsor.
ROB CORBISIER, Executive Director
Alaska State Commission for Human Rights
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
23.
CAMERON EBERSOLD, Staff
Representative Ky Holland
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Gave an overview of the summary of changes
from Version N to Version G of HB 34 and answered questions from
committee members on behalf of Representative Holland, prime
sponsor.
HANNAH LAGER, Director
Division of Administrative Services
Department of Commerce, Community & Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
34.
MEG CARLSON-COSENTINO, DO
Alaska Academy of Family Physicians
Anchorage, Alaska
POSITION STATEMENT: Co-offered the Informational Hearing on
Private Equity in Healthcare presentation.
NICHOLAS PAPACOSTAS, MD
Emergency Medicine Specialist
Alaska Chapter, American College of Emergency Physicians
JBER, Alaska
POSITION STATEMENT: Co-offered the Informational Hearing on
Private Equity in Healthcare presentation.
ACTION NARRATIVE
3:16:12 PM
CO-CHAIR ZACK FIELDS called the House Labor and Commerce
Standing Committee meeting to order at 3:16 p.m.
Representatives Burke, Coulombe, Carrick, Fields, Saddler, and
Hall were present at the call to order. Representatives Nelson
arrived as the meeting was in progress. Also present was
Representative Gray.
^PRESENTATION(S): Informational Hearing on Private Equity in
Healthcare
PRESENTATION(S): Informational Hearing on Private Equity in
Healthcare
3:16:30 PM
CO-CHAIR FIELDS announced that the first order of business would
be the Informational Hearing on Private Equity in Healthcare
presentation.
3:17:02 PM
STEVE COMPTON, MD, Cardiac Electrophysiologist, Alaska Heart and
Vascular Institute (AHVI), began the Informational Hearing on
Private Equity in Healthcare presentation with an overview of
his credentials. He stated that in the field of cardiology, the
rate of employment has increased significantly. He shared that
AHVI was approached by Bain Capital [Private Equity], a private
investment company. He explained that Bain Capital [Private
Equity's] success was measured by profit, not by patient quality
of care, survival, outcomes, or accessible care. He explained
that Bain Capital offered to buy his practice and identify ways
to increase the profit margin, then selling the practice to
another company. He asserted that Bain Capital was not
"constrained by ethics ... or quality" and would have liked to
change the "entire focus of the practice to profit."
3:22:16 PM
DR. COMPTON identified specific proposals: increasing
unnecessary and inappropriate testing; pushing work to mid-level
providers; and ignoring survival and quality metrics. He stated
his group opted out of the proposition, commenting that he had
confidence [AHVI] offers patients the "best value for their
dollar and the best possible care." He provided anecdotes about
unhappy colleagues whose practices were bought out by private
equity firms. He shared concerns regarding the recent decision
to drop the 80th percentile rule by the Division of Insurance,
resulting in more practices unable to keep their doors open. He
commented that it was a tenuous time for medicine in Alaska and
practices may be compelled to accept private offers. He
concluded by stating his belief that [private equity] is an
insidious force and a medical system driven fundamentally by
profit does not have the patient's best interest in mind.
3:26:04 PM
CO-CHAIR HALL asked if Dr. Compton's experience was common.
3:26:15 PM
DR. COMPTOM replied that 90 percent of the cardiology practices
in the United States are owned by private equity firms or
hospital chains. He noted that there is secrecy when dealing
with private equity firms.
3:27:10 PM
CO-CHAIR FIELDS gave a personal anecdote about his pediatric
facility selling to a private equity firm. Further, he
commented that an outside investor bought the PeaceHealth
Ketchikan Medical Center, leaving doctors without pay for
months.
3:27:52 PM
REPRESENTATIVE SADDLER asked what makes the field of cardiology
attractive for business.
3:28:10 PM
DR. COMPTON answered that the reasons are political. He
provided an example to answer the question regarding
echocardiograms. He explained that imaging, such as
echocardiograms, generated profit. He stated that federal
regulation regarding Medicare coverage for echocardiograms
changed approximately 15 years ago, where the same study
[echocardiogram], if performed in a hospital, was reimbursed at
a rate that was six to eight times higher than if performed in a
clinic. As a result, Dr. Compton stated, many echocardiograms
were then performed in hospitals, and many physicians were hired
by hospitals as smaller practices closed. He asserted that
doctors are not businessmen or politicians. He asserted that
the smaller a practice is, the more vulnerable it is to closure.
3:30:43 PM
REPRESENTATIVE SADDLER requested an explanation of the impact of
the 80-percent rule.
3:30:58 PM
DR. COMPTON explained the differences between private and public
insurance. He stated that, in determining the cost to the
uninsured or out-of-network patient, private insurers previously
utilized databases to determine prices that were "usual,
customary, and reasonable." He explained that there were
databases that would determine "usual, customary, and
reasonable" payments for a particular service in a particular
community. Further, he explained that United Healthcare bought
the last few remaining databases in the 1990s and would proceed
to fabricate costs without referencing the databases. He stated
that these practices proved fraudulent and that United
Healthcare was fined $400 million for fraudulent practices. He
stated that Alaska was facing the same issues with insurances
and patients were receiving very large balance bills. As a
result, Alaska devised the 80th percentile rule, which required
insurance companies to pay out-of-network claims no lower than
the 80th percentile of the average charges for a particular
medical service in a particular region. He explained that on
January 1, 2024, the [Alaska] Division of Insurance removed the
80th percentile rule. He further explained that this created
two problems: patients receiving large balance bills and
smaller practices shutting down, resulting in important
providers leaving the state.
3:36:10 PM
DR. COMPTON explained that the [Alaska] State Medical
Association (ASMA) is addressing the 80th percentile rule in two
ways. He stated that a coalition of providers in Alaska is
suing the [Alaska] Division of Insurance over dropping the rule
"inappropriately." Further, he stated that Senator Giessel is
introducing legislation to create "backstops" for out-of-network
care.
3:37:03 PM
REPRESENTATIVE CARRICK offered her understanding that the
removal of the 80th percentile mechanism was a statutory change
and further asked whether the rule should have been done through
the legislature.
3:37:28 PM
DR. COMPTON confirmed that it was a statutory change. He
explained that the rule was consumer protection issued by the
Murkowski Administration in 2004. He stated that the Division
of Insurance dropped the 80th percentile rule, claiming that it
raised the cost of healthcare in Alaska and that the No
Surprises Act (NSA), a piece of federal legislation, took care
of the issue of balance billing. He stated that the Division of
Insurance used an inaccurate database called FAIR Health and
stated that he provided data refuting their claim. Further, he
explained that NSA almost exclusively applied to emergency
services and further stated that the majority of care that
patients seek is not because of an emergency situation. He
explained that the basis of the lawsuit against the Division of
Insurance was that the decision to drop the rule was based on
inaccurate information. He referenced Senator Giesel's bill
again, noting that it is a way that the issue is being addressed
through legislation.
3:40:14 PM
The committee took an at-ease from 3:40 p.m. to 3:42 p.m.
3:42:09 PM
MARY ANN FOLAND, MD, Orthopedic Physicians of Anchorage (OPA)
Primary Care, co-offered the Informational Hearing on Private
Equity in Healthcare presentation. She explained that her group
was bought out by a private equity firm. She said that all
companies need a bottom line, but that OPA is locally dedicated
to the community. She asserted that metrics for out-of-state
companies are profit-driven, not quality-driven. She asserted
that it is difficult to recruit doctors in Anchorage, Alaska.
She gave an anecdote about a friend who moved back to Orlando,
[Florida], where she found that most of the private practices
had been purchased and all patients, regardless of risk status,
were allotted only ten to fifteen minutes per appointment.
DR. FOLAND shared her primary concern of physicians leaving
Alaska, making Alaska a healthcare desert. She offered her
belief that physician-led care teams are the best when it comes
to quality patient care.
3:46:37 PM
CO-CHAIR FIELDS invited questions from committee members.
3:46:43 PM
REPRESENTATIVE SADDLER requested data on the costs of hiring
paraprofessionals versus physicians.
DR. FOLAND replied that she would follow up with studies from
the American Medical Association (AMA) for the committee.
3:48:21 PM
The committee took a brief at-ease at 3:48 p.m.
3:49:09 PM
CO-CHAIR FIELDS stated that the committee would return to the
presentation and the last invited testifiers after hearing
legislation.
HB 23-APPLICABILITY OF HUMAN RIGHTS COMMISSION
3:49:35 PM
CO-CHAIR FIELDS announced that the next order of business would
be HOUSE BILL NO. 23, "An Act relating to the definition of
'employer' for the purposes of the State Commission for Human
Rights."
3:50:00 PM
CO-CHAIR HALL moved to adopt the proposed committee substitute
(CS) for HB 23, Version 34-LS0249\I, A. Radford, 2/21/25, as a
working document.
3:50:11 PM
REPRESENTATIVE SADDLER objected.
CO-CHAIR FIELDS clarified the committee was looking at a CS for
HB 23, regarding the applicability of the Alaska State
Commission for Human Rights (ASCHR).
3:50:46 PM
REPRESENTATIVE ANDY JOSEPHSON, Alaska State Legislature, as
prime sponsor of HB 23, stated that the proposed CS would expand
HB 23. He gave a summary of changes from Version A to Version I
[included in the committee file], which read as follows
[original punctuation provided]:
1. Changes the name of the State Commission for Human
Rights to the Alaska State Commission for Civil
Rights. (Sec. 1)
2. Adds a requirement that the governor can only
remove a commissioner for cause. Cause could include
incompetence, neglect, misconduct, or public or
private statements that undermine the commission's
work. In current law, a commissioner
can be removed for any reason. (Sec. 2)
3. Changes the timing and method of the commission's
annual report to the legislature. Instead of the week
before convening, the report would be due on November
15. Also, the report could be delivered electronically
instead of requiring paper copies. (Sec. 3)
4. Adds a defense against a discrimination claim if
the employer is a religious organization and the
employee is hired for a religious purpose. (Sec. 4)
5. Changes the definition of "employer" in the
commission's enabling statutes to include all
employers except for nonprofit social and fraternal
organizations. The change broadens coverage to
employees of other nonprofit employers. (Sec. 7)
6. Makes conforming changes in various statutes to
reflect the commission's name change in Sec. 1. (Sec.
5, 6, 8, 9, 10, 11).
3:52:04 PM
REPRESENTATIVE CARRICK questioned the change regarding the
timing and method of the commission's annual report to the
legislature.
3:52:14 PM
REPRESENTATIVE JOSEPHSON deferred to staff.
3:52:19 PM
KEN ALPER, Staff, Representative Andy Josephson, Alaska State
Legislature, on behalf of Representative Josephson, prime
sponsor of HB 23, responded that currently there is a
requirement for an annual report with 40 paper copies to be made
available through the Legislative Affairs Agency (LAA) before
the convening of an annual legislative session. He explained
that the proposed CS would delay the annual deadline for the
report to November 15, and it would delete the requirement for
physical copies. He noted that these changes were
recommendations from ASCHR.
3:53:14 PM
REPRESENTATIVE JOSEPHSON, in response to a question from
Representative Saddler, stated he did not have objections to
making changes to the original bill. He noted that there is
language in the proposed CS in Section 4 which clarifies that
religious organizations would not be subject to the jurisdiction
of the proposed CS for HB 23. He gave Providence Hospital as an
example, explaining that although it is technically a Catholic
hospital, employees are not hired to engage in religious
activities. He asserted that this change was important
regarding both First Amendment rights and employee rights
against discrimination.
3:55:00 PM
REPRESENTATIVE COULOMBE asked whether the proposed CS would
change the fiscal note.
3:55:09 PM
REPRESENTATIVE JOSEPHSON deferred to Mr. Corbisier. He
suspected that with the passage of the legislation, there would
be more cases for ASCHR.
3:55:48 PM
ROB CORBISIER, Executive Director, Alaska State Commission for
Human Rights, answered that the proposed CS for HB 23 would
still have a zero fiscal note.
CO-CHAIR FIELDS, because of subpar audio during Mr. Corbisier's
response, clarified that he had said there would be a zero
fiscal note and that the only reason the bill is slotted for the
House Finance Standing Committee is for increased receipt
authority.
3:56:41 PM
REPRESENTATIVE SADDLER asked the reason for changing the name of
the commission, from Alaska State Commission on Human Rights to
Alaska State Commission on Civil Rights.
REPRESENTATIVE JOSEPHSON replied that the name change was a
recommendation from ASCHR. He reported that ASCHR receives
calls from prisoners making human rights claims that do not fall
under the jurisdiction of the commission. He offered the belief
that the name change would better reflect the obligations of the
commission. He admitted that he was a little hesitant because
of the historic title of ASCHR but remarked that most other
states call their entities "civil rights commissions."
REPRESENTATIVE SADDLER questioned the distinction between human
rights and civil rights and further asked if the name change
would change the applicability of ASCHR.
REPRESENTATIVE JOSEPHSON described the types of discrimination
that are illegal under existing human rights laws stated that
[the proposed CS for] HB 23 would not change anything except
ASCHR's jurisdiction over non-profits.
3:59:54 PM
MR. CORBISIER replied that the provision of the constitution
that ASCHR enforces is titled "Civil Rights" and the name change
would be more accurately reflective of the agency's role. He
commented that the name change would decrease the number of
frivolous calls received from those wanting ASCHR to take stance
on human rights violations in foreign wars or on environmental
causes. He reiterated that the proposed CS for HB 23 would not
change the jurisdiction of ASCHR; instead, he argued, it would
be a more encompassing term.
4:01:03 PM
REPRESENTATIVE SADDLER noted that the second change adds removal
for cause for the commissioner of ASCHR. He asked whether other
boards have similar provisions for the removal of commissioners
and what warranted the proposed change in the CS.
4:01:27 PM
REPRESENTATIVE JOSEPHSON deferred to Mr. Alper and Mr.
Corbisier.
4:01:47 PM
MR. ALPER stated he does not know which agencies have removal
for cause versus at the will of the governor and would follow up
with the committee. He further commented that his office would
distribute a memorandum ("memo") received from Legislative Legal
Services, a "quasi-judicial agency," stating that ASCHR could
legally change the removal of the commissioner to "for cause"
due to their regulatory role.
4:03:03 PM
MR. CORBISIER stated that he did not know which commissions had
provisions for removal for cause. He explained that a prior
commissioner for ASCHR essentially went missing for about a
year, and at that time, there was no pathway for removal. He
explained that as a result, the commissioners believed that "the
governor should have an explicit, articulated tool to remove a
commissioner."
MR. CORBISIER speculated that in its inception, the legislature
did not consider that a commissioner might need to be removed
from their position. He explained that the commission thought
removal for cause would maintain the apolitical nature of ASCHR.
4:05:59 PM
REPRESENTATIVE SADDLER asked for clarification that the governor
currently has the right to remove the [ASCHR] commissioner with
or without cause.
4:06:13 PM
MR. CORBISIER replied that there is a statute that says if a
commission does not have an explicit removal for cause, then the
removal would be at will. He stated that ASCHR predates that
particular statute and made the argument that ASCHR was not
meant to fall under that particular statute. He referenced the
court case Bradner v. Hammond and noted that ASCHR commissioners
are volunteers.
4:07:22 PM
REPRESENTATIVE SADDLER maintained his objection to adopting CS,
Version I, as the working draft for HB 23.
4:08:17 PM
A roll call vote was taken. Representatives Nelson, Coulombe,
Burke, Carrick, Hall, and Fields voted in favor of the motion to
adopt the proposed CS for HB 23, Version 34-LS0249\I, A.
Radford, 2/21/25, Version I, as a working document.
Representatives Saddler voted against it. Therefore, Version I
was before the House Labor and Commerce Standing Committee as a
working document by a vote of 6-1.
CO-CHAIR FIELDS announced that HB 23, Version I, was held over.
CO-CHAIR FIELDS set a tentative amendment deadline for HB 23.
HB 34-AK INNOVATION COUNCIL
4:08:53 PM
CO-CHAIR FIELDS announced that the next order of business would
be HOUSE BILL NO. 34, "An Act establishing the Alaska Innovation
Council; and relating to financial disclosures for members of
the Alaska Innovation Council."
4:09:13 PM
CO-CHAIR HALL moved to adopt the proposed CS for HB 34, Version
34-LS0353\G, Gunther, 2/24/25, ("Version G") as a working
document.
CO-CHAIR FIELDS objected for the purpose of discussion.
4:09:44 PM
CAMERON EBERSOLD, Staff, Representative Ky Holland, Alaska State
Legislature, on behalf of Representative Holland, prime sponsor,
explained that the changes proposed under the proposed CS to HB
34 incorporate feedback from committee members from the previous
two hearings. He noted that the most substantial change is the
reduction of members of the proposed Alaska Innovation Council
from 19 to 15. He spoke to one other change, noting that the
council shall "identify gaps in Alaska capital markets." He
stated that all of the specific changes were distributed to
committee members in a document, titled "House Bill 34: Alaska
Innovation Council Explanation of Changes" [available in
committee file].
4:10:54 PM
CO-CHAIR FIELDS invited questions from committee members.
4:10:59 PM
REPRESENTATIVE COULOMBE questioned the need for an organized
labor group, citing one proposed CS change would be requiring
one member of the council to have an association with an
organized labor group.
4:11:23 PM
MR. EBERSOLD responded that access to skilled labor was
requested by some committee members in previous hearings. He
further commented that skilled labor is an important part of a
growing, thriving economy.
4:11:46 PM
REPRESENTATIVE COULOMBE commented that the inclusion of an
organized labor group appeared to be outside of the scope of the
original presentation for HB 34. She remarked that she
envisioned innovators that "need help and resources to get off
the ground" and "the Small Business Development Center couldn't
help because this was a step behind."
4:12:12 PM
CO-CHAIR FIELDS noted that "in some areas of economy [there is]
growing dispatch through digital devices." He remarked that
some labor organizations have worked with companies, Lyft for
example, to make benefit packages available to independent
contractors. He stated that a changing labor market would
justify the need for access to benefits and training.
4:12:46 PM
REPRESENTATIVE COULOMBE offered her understanding that the
purpose of the proposed council was to "get innovators going."
She asked the reasoning for a one-year term of the chair of the
proposed Alaska Innovation Council.
4:13:22 PM
MR. EBERSOLD responded that the term is one year but,
theoretically, a chair may serve up to three consecutive terms.
He stated the purpose of the proposed Alaska Innovation Council
would be to create a series of recommendations. He offered his
belief that the chair of the proposed council would shepherd
other members as they move through recommendations.
4:14:10 PM
REPRESENTATIVE NELSON stated that he appreciated the reduction
of members. He requested an updated fiscal note for the
proposed CS.
MR. EBERSOLD replied that he would follow up with the updated
fiscal note.
4:14:49 PM
The committee took a brief at-ease at 4:14 p.m.
4:15:08 PM
CO-CHAIR FIELDS requested an update on the status of the fiscal
note for the proposed CS to HB 34.
4:15:15 PM
HANNAH LAGER, Director, Division of Administrative Services,
Department of Commerce, Community & Economic Development
(DCCED), responded that there is not yet an updated fiscal note,
but that DCCED would prepare one upon the adoption of the
proposed CS for HB 34.
REPRESENTATIVE NELSON requested a ballpark estimate. He asked
for clarification that the original fiscal note was
approximately $500,000.
MS. LAGER confirmed that it was correct. She repeated that she
did not have an updated fiscal note, but expected that the
number would be lower, given the reduction in members under the
proposed CS for HB 34.
4:15:48 PM
REPRESENTATIVE CARRICK asked for the positions that were
eliminated under the proposed CS for HB 34.
4:16:04 PM
MR. EBERSOLD replied that the members removed from the proposed
council were the governor or direct designee, the commissioner
of the Department of Revenue or designee, the executive director
of the Alaska Permanent Fund Corporation or designee, one member
from the House of Representatives, and one member from the
Senate. He stated that in the original version of HB 34, the
House of Representatives and the Senate each would have two
members in the proposed Alaska Innovation Council.
4:17:22 PM
CO-CHAIR FIELDS withdrew his objection to the motion to adopt
the proposed CS for HB 34, Version 34-LS0353/G, Gunther,
2/24/25, as a working document. There being no further
objection, Version G was before the committee.
4:17:43 PM
CO-CHAIR FIELDS set an amendment deadline for HB 34, Version G.
4:18:14 PM
CO-CHAIR FIELDS announced that HB 34, Version G, was held over.
^PRESENTATION(S): Informational Hearing on Private Equity in
Healthcare
PRESENTATION(S): Informational Hearing on Private Equity in
Healthcare
4:18:18 PM
CO-CHAIR FIELDS announced that the final order of business would
be a return to the Informational Hearing on Private Equity in
Healthcare presentation.
4:18:38 PM
MEG CARLSON-COSENTINO, DO, Alaska Academy of Family Physicians,
co-offered the Informational Hearing on Private Equity in
Healthcare presentation. She stated that she would discuss data
that was distributed to committee members from the National
Academy of Family Physicians. She gave an overview of the
purview of family medicine in Alaska. She stated that
nationwide, many private practices are closing and turning into
"consolidated, corporate entities." She asserted consolidation
leads to higher prices for patients, higher insurance premiums,
and a decrease in quality care metrics. She maintained that
consolidated practices tend to increase the quantity, not the
quality, of visits and additionally increase referrals to more
lucrative practices. She concluded by advocating supporting
independent practices, asserting that by staying open, they help
drive the cost of care down for patients in Alaska.
4:21:08 PM
CO-CHAIR FIELDS invited questions from committee members.
4:21:13 PM
REPRESENTATIVE COULOMBE asked what role the state government
should play in supporting independent practices.
4:21:34 PM
DR. CARLSEN-COSENTINO replied that a lot of independent
practices have struggled with red tape related to pre-
authorizations, even for state-based insurance like Medicaid,
and need to hire more people as a result. Additionally, she
advocated disincentivizing corporations.
4:22:34 PM
CO-CHAIR FIELDS requested Dr. Carlsen-Cosentino to elaborate on
how private equity could maximize profit at the expense of the
state.
DR. CARLSEN-COSENTINO spoke to the incentive to referral, or to
order more testing, which brings in more revenue and exploits
the system. She asserted that this practice is rewarded by
corporate entities, which only care about profit. She stated
that independent practices tend to reinvest money into their
community, while corporate practices do not reinvest money into
their community.
4:24:06 PM
The committee took a brief at-ease at 4:24 p.m.
4:24:35 PM
NICHOLAS PAPACOSTAS, MD, Emergency Medicine Specialist, Alaska
Chapter, American College of Emergency Physicians (AK-ACEP),
concluded the Informational Hearing on Private Equity in
Healthcare presentation. He stated that private equity in
healthcare is a new phenomenon currently experiencing an
explosion in growth since 2010. He stated that private equity
operates differently from other types of investment strategies,
in that the intention is to acquire a business, maximize
profits, and then sell the business within three to six years.
He named some strategies employed to raise revenue, including
staffing cuts, decreased investment in new equipment, postponed
maintenance on existing equipment, and cycling through employees
at a high rate.
DR. PAPACOSTAS asserted that private equity forces are not yet
as prominent in Alaska. He offered his belief that the primary
guardrail against private equity forces has been favorable
insurance reimbursements. He stated that struggling private
practices are the most vulnerable to buyouts and that some
practices feel that they have no other choice.
4:28:58 PM
CO-CHAIR FIELDS thanked the invited presenters.
4:29:06 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
[4:29] p.m.