Legislature(2013 - 2014)SENATE FINANCE 532
02/11/2014 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB135 | |
| HB193 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 135 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | HB 193 | ||
SENATE FINANCE COMMITTEE
February 11, 2014
9:08 a.m.
9:08:03 AM
CALL TO ORDER
Co-Chair Kelly called the Senate Finance Committee meeting
to order at 9:08 a.m.
MEMBERS PRESENT
Senator Kevin Meyer, Co-Chair
Senator Anna Fairclough, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
Senator Pete Kelly, Co-Chair
ALSO PRESENT
David Scott, Staff, Senator, Donald Olson; Kris Curtis,
Auditor, Legislative Auditor, Division of Legislative
Audit; Mark Landahl, In-Charge Auditor, Division of
Legislative Audit; Dr. Ward Hurlburt, Chair, Alaska Health
Care Commission; Deborah Erickson, Executive Director,
Alaska Health Care Commission; Dirk Craft, Staff,
Representative Lance Pruitt;
PRESENT VIA TELECONFERENCE
Daniel Moor, Municipality of Anchorage, Anchorage; Johanna
Bales, Deputy Director, Tax Division, Department of
Revenue, Anchorage.
SUMMARY
SB 135 EXTEND ALASKA HEALTH CARE COMMISSION
SB 135 was HEARD and HELD in committee for
further consideration.
CSHB 193(FIN)
MUNICIPAL TAXATION OF TOBACCO PRODUCTS
CSHB 193(FIN) was HEARD and HELD in committee for
further consideration.
SENATE BILL NO. 135
"An Act extending the termination date of the Alaska
Health Care Commission; and providing for an effective
date."
DAVID SCOTT, STAFF, SENATOR, DONALD OLSON, presented SB 135
and related that it extended the termination date of the
Alaska Health Care Commission. He stated that the
commission was established in 2010 and had a sunset date of
June 30, 2014; if the bill passed, it would be the
commission's first extension. He stated that the Division
of Legislative Audit had audited the commission and felt
that it was serving the public interest; however, the
division did have some recommendations. He concluded that
the legislation extended the commission a further 3 years
until June 30, 2017.
9:10:35 AM
KRIS CURTIS, LEGISLATIVE AUDITOR, DIVISION OF LEGISLATIVE
AUDIT, stated that the division had conducted a sunset
audit of the Alaska Health Care Commission and that the
report was dated May 6, 2013 (copy on file). She understood
that a copy of the audit was in members' packets. She
reported that the purpose of the audit was to determine if
the commission was operating in the public's interest and
whether its termination date should be extended. She stated
that because the commission was new, the division had
provided some background information beginning on page 5 of
the audit. She stated that the commission was created by
administrative order in 2008 as a way to help reform
healthcare in Alaska; it was then reestablished in statute
in 2010. She noted that the legislature had intended the
commission to achieve reform through the development of a
statewide health plan. She stated that the original
commission that was established in 2008 had not considered
itself responsible for developing a statewide health plan,
but had instead had focused its efforts on specific policy
recommendations. She reported that when the commission was
reestablished in statute in 2010, its members agreed to
continue the prior commission's work and use the same
general approach.
Ms. Curtis continued to address the sunset audit and
reported that the legislature had intended the Alaska
Health Care Commission to work together with the Department
of Health and Social Services (DHSS) to create a
comprehensive health plan; although various policy
recommendations have been developed, the commission had not
collaborated with the department to achieve its intended
outcome. She stated that there was currently no state
health plan and reported that the audit only recommended a
3-year extension, which the division considered to be
adequate time to develop a plan. She added that the audit
had concluded that the commission was active; furthermore,
several studies had been conducted and a foundation for a
plan had been developed. She expressed the division's
concern that the framework lacked the actionable components
necessary for effective implementation; it did not identify
specific actions to be taken, the timeline for completion,
the organization responsible for taking action, the
definition of a successful outcome, and did not specify how
progress would be monitored and measured. She explained
that without a statewide health plan, the actions of the
commission may not effectively impact health care in
Alaska. The audit recommended that the commission
coordinate with the commissioner of DHSS to identify each
agency's roles and responsibilities regarding developing a
plan. The audit also included 2 administrative type
recommendations; one recommendation was to improve the
public noticing of meetings and the other was to ensure
that the annual reports included statutorily required
components.
9:14:10 AM
Senator Hoffman inquired if the Alaska Health Care
Commission had addressed the Affordable Care Act (ACA) or
whether it would be part of its efforts to address health
care. Ms. Curtis replied that the audit had not gone into
that type of detail regarding the ACA and did not contain
any conclusions on that issue; however, the chair of the
commission was present and could speak to question.
Senator Hoffman noted that the ACA did not seem to be a
detail, but was an overriding policy that needed to be
addressed by the State of Alaska. He observed that the
Alaska Health Care Commission was to address affordable
access to health care and to identify strategies for
implementing health care to all Alaskans; he offered that
this was basically the intent of the ACA. He stated that he
would inquire about the issue to the chairman of the
commission.
Senator Olson noted that one of the audit's identified
shortcomings of the commission was that there had not been
specific course actions identified. He inquired how a
commission of this size would come up with specific actions
when there was such a diverse area to provide health care.
He requested an example of a specific action that the
commission could use across the board. Ms. Curtis stated
that when the Division of Legislative Audit conducted a
sunset audit, it looked at of the criteria, which generally
determined whether the commission was meeting the public's
interest. She stated in looking at the purpose of the
commission in developing a statewide plan, the division had
asked itself what it would expect to see; it had looked at
other states and other types of commissions around the
country, and looked at best practices for a plan. She
explained that the audit's recommendations were more
focused on the shortcomings of what the commission had and
how it could be more productive at meeting the public's
interest. She referenced appendix A of the audit and stated
that the commission had a framework, many aspects of which
were a good foundation for a plan; however, the division
had looked at what the commission was accomplishing and
what was keeping it from taking action and moving forward.
She reported that what the audit had found was some
shortcomings in the framework that kept it from being
implemented. She stated that she could not provide the
detail of what specific actions the commissions could make
across the board, but that the recommendations in audit, as
far as best practices were concerned, identified the
shortcomings of what the commission did have.
9:18:28 AM
Senator Olson inquired how the commission would be able to
find actions that needed to be taken if the audit was
unable to do so. Ms. Curtis replied that the division had
looked at best practices around the country, but that the
State of Alaska would be different than any other state.
She explained that Alaska would not have the same issues
that other states had.
Senator Olson stated that it was pointed out in the audit
that the Alaska Health Care Commission had not recommended
specific actions for coming up with a health care plan. He
inquired what specific actions that Division of Legislative
Audit wanted to see, given the diversity of Rural Alaska,
Native and non-Native beneficiaries, the Indian Health
Service's System, and the ACA.
MARK LUNDAHL, IN-CHARGE AUDTIOR, DIVISION OF LEGISLATIVE
AUDIT, responded that the auditors were not medical
professionals and did not evaluate the recommendations for
the substance and whether they were good ideas for
healthcare in the state. He noted that the Alaska Health
Care Commission had a long list of recommendations and had
conducted a lot of work; however, what was missing was an
actual timeline for its recommendations being implemented.
In other words, action that was the next step after
developing the recommendation was what the division thought
was missing from the commission.
Senator Olson observed that out of the 14 members of the
Alaska Health Care Commission, only 3 of them were MDs and
thought that none of them besides the chairman had
practiced medicine in the "bush." He wondered how it would
be expected that the commission would have actions that
would fit the high need for health care in Rural Alaska.
Ms. Kurtis responded that the division did not question how
the commission was created or whether it would be competent
enough to fulfill its mission; what it had examined was
whether the commission was meeting its mission and
objective.
Co-Chair Meyer inquired why the sunset was being extended 3
years and not some other length of time. Ms. Kurtis replied
that the division had worked at length with the commission
and its members as it developed the recommendation. She
reported that the division felt that 4 years was too long,
but still wanted to provide the commission with adequate
time to formulate a solid plan.
9:22:13 AM
Senator Dunleavy read from the audit report and inquired if
the division would recommend that the commission not be
extended again if it had still not improved the plan after
the 3-year extension. Ms. Curtis replied that she could not
speak to what the division would conclude until it
conducted the audit.
Senator Dunleavy referenced the conclusion on page 9 of the
audit:
Overall, the commission is operating in the public's
interest, but improvements in the development of a
statewide health plan are needed to justify its
continued existence.
Senator Dunleavy inquired what the audit was trying to
convey in the above paragraph. Ms. Curtis replied that the
audit was trying to convey that unless the actions of the
Alaska Health Care Commission could translate into actions
of the state or actual policy, there was no reason or
justification to continue its existence. She believed that
the information that the commission was creating was
helpful and was being used extensively by others; however,
that was not the mission of the commission. Unless the
recommendations translated into some type of actual plan
that could be implemented, the division did not believe
that the commission should be continued.
Vice-Chair Fairclough directed the committee's attention to
Commissioner Streur's and the Alaska Health Care
Commission's responses to the audit. She pointed out that
the commissioner believed that the commission had taken
steps to work with DHSS to start the implementation of a
statewide health plan. She pointed out that the auditor had
done what the legislature had asked them to do, which was
to use the guidelines that were set out to measure how
commissions and boards were acting and whether they should
be continued.
Co-Chair Meyer agreed and added that the audit was well
done.
9:25:40 AM
DR. WARD HURLBURT, CHAIR, ALASKA HEALTH CARE COMMISSION,
stated that the charge to the commission was to look at
issues of affordability, access, and quality of healthcare
for Alaskans; for a number of reasons, the commission was
focusing mainly on the cost of healthcare. He spoke about
the financial challenges of the Anchorage School District
that had resulted in a need to reduce teaching staff; he
recalled hearing that both Juneau and Fairbanks were having
a similar issue. He suspected that perhaps every school
district in the state had financial issues. He cited data
from the Anchorage School District and reported that over
the last 30 years, the salaries of teachers had increased 1
percent more than the cost of living increase; however, the
costs of healthcare had risen about 15 percent more each
year than the cost of living. Over that 30 year period, the
Anchorage School District's cost for benefits had increased
from about 20 percent of compensation cost to about 45
percent. He stated that the prior year, active state
employees' and dependents' health care costs had increased
about 18 percent per person; additionally, the Anchorage
School District had seen a similar increase in this area.
He observed that the United States had 50 percent to 100
percent higher healthcare costs than other industrialized
countries and pointed out that the next highest was
Switzerland; however, in Switzerland there was a higher
life expectancy and infant survival rate.
Dr. Hurlburt continued to speak to healthcare issues and
related that if the United States had spent the same amount
on health care over the last 20 years as Switzerland, it
would have saved $15 trillion. He pointed out that $15
trillion was almost the entire national debt of the United
States and that the statistic was significant. He reported
that the State of Alaska spent about $2.6 billion per year
for health care services. He stated that Medicaid was the
biggest segment of the state's health care costs and that
it was followed next by employees, retirees, and
dependents, worker's compensation, the Department of
Corrections, and the Division of Juvenile Justice. He
stated that the issue was large and that the state was
faced with an imbalance between the revenue coming in and
what it would like to do as a state regarding healthcare;
overall, Alaska spent more than $8 billion on healthcare.
He stated that the Alaska Health Care Commission had looked
at costs in the context of containing them while still
improving quality. He related an example from British
Columbia, which had a population of 4.6 million, better
life expectancy and infant mortality rates than the United
States. He offered that British Columbia spent $25 billion
less per year on health care than the United States, which
it could use for roads, education, and other things. He
stated that health care costs were a "tax" and that it was
an issue that the legislature was dealing with. He stated
that the commission had done studies that compared the
price of physician, hospital, and pharmacy services between
Alaska, Washington, Oregon, Idaho, North Dakota, Wyoming,
and Hawaii; Alaska's costs were quite a bit higher than
those other states.
Dr. Hurlburt reported that the Alaska Health Care
Commission was looking at pricing and had made
recommendations to the legislature and the governor in 2013
for more transparency related to pricing and quality and
making a hospital discharge database mandatory instead of
voluntary; the commission also recommended a payer database
where the payers of health care reported what they paid. He
stated that Alaska needed a market-based solution where the
payers and the providers where evenly balanced across the
negotiating table. He stated that the commission was not
looking at a system of price controls and pointed out that
when a system like that had been tried nationally, it
created greater problems than the assistance it offered. He
stated that transparency in terms of quality and cost was
important. He noted that everyone wanted the highest
quality of health care and that the commission wanted to
make information available to people to be able to make the
best choice.
9:32:56 AM
Dr. Hurlburt commented that the Alaska Health Care
Commission had spent quite a bit of time working with the
Division of Legislative Audit and that the audit process
had been a very constructive, helpful, and collaborative
one. He stated that the commission had not envisioned
itself developing a health plan and did not want a health
plan to become a document that sat on a shelf and did not
change anything. He offered that in response the audit, the
commission's 2013 recommendations were more specific. He
stated that the commission had shied away from being an
authoritative advisory group, but that it had been more
specific with its 2013 recommendations; furthermore, the
commission had been working closely with Commissioner
Streur with the idea that the plan would be a document from
DHSS and that the commission would be a resource that would
work collaboratively with the department.
Dr. Hurlburt reported that the Alaska Health Care
Commission had kept itself knowledgeable regarding the ACA
and that it had a report on it every meeting; however, the
commission had not got into the specifics and some of the
controversies that were related to the act and did not see
that as its role. He cited an article in The Economist
Magazine that discussed the need around the world for
getting transparency and quality information about health
care to people. He stated that the commission had not tried
to demonize providers and that it had tried to shed light
that costs were very high in Alaska compared to other
states; however, it believed that providers were 99 percent
dedicated, idealistic people who wanted to do a good job.
He concluded that everyone wanted a good health care system
in Alaska and that the commission believed that having a
more even negotiating situation would result in better
pricing. He noted that it had been shown that profit levels
were high in the Anchorage hospitals and stated that the
commission believed that the providers needed to be the
ones to lead a change because they understood the ethical
and moral dimensions of the business.
Senator Hoffman appreciated the work of the Alaska Health
Care Commission, but noted that it still had not addressed
a health care plan. He recalled that Dr. Hurlburt had
stated that the ACA was controversial, but thought that as
a state, Alaska needed to put that bias aside because until
it was changed, it was the law of the land. He thought that
there were different opinions at the table regarding the
ACA, but that until it was changed, it was the law; he
noted that the insurance requirements were being extended,
but that there were no other changes to the law currently.
He hoped that during the course of implementing its health
care plan, the commission would address the ACA because he
thought it fit in with commission's vision statement. He
noted that the commission wanted Alaskans to be the
healthiest people in the nation by 2025 and have access the
most affordable and highest quality healthcare.
Senator Hoffman wondered how the highest possible quality
of health care could be achieved in Kipnuk or any Rural
Alaskan community. He offered that the 2 main factors
affecting getting the best health care in Rural Alaska were
high quality/clean housing and running water and sewer; he
thought that those 2 factors would have the highest impact
on health care in those areas and wondered if Dr. Hurlburt
agreed. He pointed out that although the housing, running
water, and sewer might not be issues in the urban areas,
they represented issues that Rural Alaskans lived with
every day; Furthermore, nothing was mentioned regarding
those 2 issues in the audit. He noted that on page 23 of
the audit, it stated that the commission wanted to achieve
the lowest per capita health care spending levels; he
thought that there needed to be higher levels of health
care spending to achieve improved health care, particularly
among the communities that were spread throughout Alaska.
He thought that telemedicine could help rural areas of the
state and that it should be higher on the list of
priorities.
9:39:50 AM
Senator Hoffman directed the committee's attention to page
24 of the audit and noted that it depicted 4 of the
commission's highest priorities. He noted that the 4
priorities were general in nature, but thought that there
should be something higher on the list that addressed the
diversity health care in Rural Alaska. He thought that even
though a majority of the health care in Rural Alaska was
provided by the federal government, the people in Rural
Alaska were still citizens of the state. He thought that an
Alaska Health Care Commission should not ignore the Rural
Alaskan issues and that there needed to be an interface
between it and the Alaska Native Tribal Health Consortium.
He requested Dr. Hurlburt to comment on the issues he had
just raised.
Dr. Hurlburt addressed the question about the ACA. He
observed that as a state employee during the challenge in
the United States Supreme Court, his interpretation was
that the governor's stance was that the law was
unconstitutional; as such, the commission had not pursued
funding that was available under the act because it felt
that it would have been disingenuous. He offered that after
the court had upheld the law, the governor had basically
taken the same stance that Senator Hoffman had taken, which
was that it may not be a good law, but it was the law. He
thought that there was no question regarding if the ACA was
the law of the land and that there was clarity regarding
that issue.
Dr. Hurlburt reported that when he had come to Alaska in
1961, the infant mortality rates were about ten times what
they were currently; a lot of that was due to very high
birth rates among Alaska Natives. He reported that in 1961,
the average life expectancy in Alaska was probably in the
late 40s. He understood that the current life expectancy
for Alaska Native males was about 70 years and about was
about 74 for Alaska Native females; while this expectancy
was not quite as high as the U.S. all-races average, there
had been a huge impact. He discussed the frequency of
children deaths during outbreaks in the 1960s. He reported
that in 1960s, the average census of deaths in the
Kanakanak hospital was about 25, while currently it was
about 5 even with a higher area population. He agreed that
the improvements in healthcare in Rural Alaska were due to
improvements in water, sanitation, and housing, but that
immunizations had helped as well.
Dr. Hurlburt reported that Alaska had the largest
percentage of any Native American people of any state and
thought that the Alaska Tribal Health System was the
strongest and best among the tribal health systems in the
county. He pointed out that Alaska also had a lot of
veterans and military personnel and that compared to his
experience in other areas, Alaska worked in a fairly
collaborative way regarding health care. He pointed out
that he knew virtually everyone that had been in his job
since statehood and that the vast majority of those people
had worked in the tribal health system. He thought that
there was always room for improvement, but that generally
the collaboration was exemplary in Alaska.
9:45:49 AM
Senator Hoffman recalled being the director of Yukon-
Kuskokwim Health Corporation in the 1970s and remembered
that the organization had achieved a lot of the
accomplishments that Dr. Hurlburt had alluded to; he
discussed other accomplishments in Rural Alaskan health
care. He thought that instead of dwelling on past
accomplishments, the committee needed to look at the Alaska
Health Care Commission's mission statement, which stated
that Alaska needed to make health care more affordable. He
acknowledged that the Alaska Tribal Health System was one
of the best in the nation, but thought that there was still
a lot of improvement that needed to be made to health care
in rural areas of the state. He thought that at least one
member of the commission should be from Rural Alaska and
offered that this would give some voice and perspective to
the conditions and needed improvements in rural areas. Dr.
Hurlburt thought that the suggestion was reasonable and
something to take into consideration. He discussed the
current members of the commission and reiterated that
Senator Hoffman's suggestion was not an unreasonable one.
Senator Olson noted that the Alaska Health Care
Commission's mission statement said that it wanted to
improve health and healthcare for all Alaskans. He recalled
earlier comments that the commission had not thought that
it was charged with developing a health care plan, but
wondered how health care for all Alaskans could be improved
without a plan. Dr. Hurlburt responded that the commission
had not seeing its role as making specific assignments as
an advisory group and had not worked a plan out; however,
before the audit report had been submitted to the
legislature, the commission had taken the advice and had
been working with Commissioner Streur to support the
development of a health plan that would benefit all
Alaskans.
9:50:14 AM
Senator Olson inquired if 3 years was a long enough time
period for Dr. Hurlburt to finish what he had envision when
he had started as the chair of the Alaska Health Care
Commission in 2010. Dr. Hurlburt thought that the challenge
and the opportunity would go on way longer than 3 years. He
thought that the legislative audit process had been
beneficial and that it would be imprudent not to add a 3-
year period, which he thought was a reasonable time period
in which to hold the commission accountable. He would
suggest a 3-year period for reassessment of whether the
state was getting its money's worth out of the commission
regardless of whether the audit suggested a longer time
period.
Senator Bishop thought that the biggest take away from Dr.
Hurlburt's comments was that wages were going up 1 percent
per year, but the cost of healthcare was going up at 15
percent per year; he thought that the increases in the
wages and healthcare should be graphed. He wondered when
the state would go over the edge and realize that it could
not continue to keep paying for the increases. Dr. Hurlburt
responded that he did have a graph depicting that in a
prior presentation and offered to provide it for the
committee.
Co-Chair Meyer noted that he had served on the education
committee for 4 years and that there had been some great
ideas about how to solve education issues and concerns
statewide; however, the ideas were deemed unaffordable once
they got to the finance committee. He wondered whether the
Alaska Health Care Commission considered the costs when it
made its recommendations. He inquired if costs were a
consideration when making recommendations or if the
commission's intent was to come up with ideas. He expressed
concern that if the ideas were too costly, they would never
be realized. Dr. Hurlburt replied that there would be a
fiscal note related to both having a mandatory hospital
discharge database and all-payer claims database. He
recalled that during one of the early meetings of the
commission, it was estimated that about 30 percent of
health care was not really supported by high grade
evidence; this type of healthcare either did no good or
caused harm. He noted that the national cost of healthcare
was about $3 trillion per year and that one-third of that
was $1 trillion per year that could be saved by not doing
things that did no good or caused harm.
Dr. Hurlburt recalled that when he was a young doctor
practicing in Dillingham, he had the advice of the best
ear, nose, and throat doctors. He stated that at the time,
there had been a large problem of Alaska Native children
having ears running with pus because of poor housing and a
lack of water and sanitation. He explained that how the
children were treated was to aspirate the pus out with
suction and pack the external auditory canal with
chloramphenicol powder; the solution did no more good than
witchcraft, but it was what was advised at the time. He
recalled that at the time, he thought that he had been
doing the right thing. He discussed changes in how ulcers
were dealt with and noted that some stuff was fashion and
not really science driven. He thought that there was a huge
opportunity world-wide to practice more evidence-based
medicine and that medical students and residents needed to
be trained more about the issue. He added that politicians
needed to understand the concept of grades of evidence. He
observed that there would be many things that did not have
good supporting evidence and that a patient relied on the
judgment of the physician. He reiterated that there was an
opportunity with focusing on evidence-based medicine to
reduce costs and improve the quality of health care.
9:57:04 AM
Co-Chair Meyer noted that healthcare costs were a concern
of the committee, particularly regarding the various school
districts. He recalled doing a tour of Heart and Vascular
Center at Providence Hospital and noted that he was
impressed with the cardiologists there. He thought that the
doctors at the hospital were not only attracted to the
beauty of Alaska, but were probably making pretty good
money. He wondered if the Alaska Health Care Commission
looked at the costs versus the benefit and whether Alaska
was getting the offsetting benefit of the cost of retaining
top-notch surgeons and doctors. Dr. Hurlburt replied that
was pretty good data regarding the cost of primary health
care and that in terms of the comparative costs of the 5
comparison states, Alaska was about 40 percent to 50
percent high in cost; however, Alaska tended to be about 80
percent higher in costs for interventional specialists,
such as interventional cardiologists, cardiac surgeons,
orthopedists, etc. He pointed out that the commission knew
that compensation was a lot higher in Alaska; it did not
have evidence that the quality of care was inferior, but
also did not have the kind of quality information that
could be helpful.
Dr. Hurlburt continued address the comments and reported
that there were about a dozen states that had adopted an
all-payer-claims database and noted that the intent of that
type of database was to get more quality information. He
added that like other states, Alaska did not have better
quality information for things like the re-hospitalization
rates, the long-term survival rates, the complications
rates, etc. He discussed advancements in cardiology and
stated that cardiologists could do miraculous things now.
10:00:49 AM
Co-Chair Meyer expressed concern that sometimes when
positions were squeezed on costs, people tended to go where
they would make the most money; in this case, Medicare
patients fell off. He reported that Anchorage had opened up
a Medicare clinic, which the state subsidized. He expressed
concerned that squeezing positions too much would result in
doctors not taking Medicare patients, which in turn could
result in the Medicare clinic being unable to keep up with
demand; he inquired if this was a concern to the
commission. Dr. Hurlburt replied that it was something that
the state needed to be cognizant of and that Alaska was
unique in that it paid more for Medicaid than Medicare
reimbursed. He reported that Medicaid reimbursement in
Alaska was about 30 percent to 40 percent higher than it
was in other states and that with one exception, other
states had significantly lower reimbursement for Medicaid
than Medicare; however, in Alaska, Medicaid reimbursement
was about 38 percent higher than the reimbursement for
Medicare. He noted that the Medicare and Medicaid
reimbursements were not as high as commercial insurance,
which was why the cost of healthcare was dependent; the
reimbursement levels from Tricare, Veterans Affairs,
worker's compensation, Medicaid, Medicare, and self-pay
insurance were vastly different. He agreed that physicians
worked hard and that they deserved to be well compensated
overall; however, he felt that physicians were well
compensated and that the concern was not a big risk that
Alaska had.
Co-Chair Meyer commented that the fiscal note attached to
the bill was for $500,000 and thought that it was mostly
for staffing needs. He requested comments on the fiscal
note's appropriation. Dr. Hurlburt responded that $500,000
was the same level amount that had been there. He noted
that the amount did pay for the 2 staff positions, but
thought that it did not take up a majority of the money.
The funding in the fiscal note also went towards travel of
non-state employees for meetings and to pay for studies
that have been conducted. He discussed several studies that
the commission had contracted.
10:04:55 AM
Co-Chair Meyer inquired if there was adequate
representation on the Alaska Health Care Commission from
physicians and doctors. Dr. Hurlburt replied that the
commission had originally been smaller when it had been
established by Governor Palin under administrative order,
but it was expanded when it had been established by the
legislature to include a Veterans Affairs representative, a
behavioral health representative, and another physician
representative. He would not make the commission larger and
thought that if the group was too large, the meetings
became "more show and tell." He thought that the expansion
of the commission had been a challenge and that his
personal bias had been not to expand it at the time. He
thought that there was fairly wide representation on the
commission currently and that in terms of disciplines,
there had not been a nurse on the board. He commented that
nurses brought a little bit different perspective than
physicians did, but thought that it would be a mistake to
try having every discipline represented on the commission.
He suggested not expanding the size of the commission.
Vice-Chair Fairclough noticed that the fiscal note included
$165,000 in federal money and inquired what state match, if
any, was required from the General Fund to secure the
federal funding. Dr. Hurlburt deferred the question to Ms.
Erickson, but noted that the federal money did come from
the Medicaid dollars that Alaska was eligible for.
10:08:03 AM
DEBORAH ERICKSON, EXECUTIVE DIRECTOR, ALASKA HEALTH CARE
COMMISSION, replied that the federal funding did require a
match that was based on the Department of Health and Social
Services formula for indirect that drew from the Medicaid
pot. She added that the way the federal funding was
currently distributed, it required an amount of general
fund match.
Vice-Chair Fairclough inquired if an indirect cost recovery
system was being used that required a 2-1 match. Ms.
Erickson replied that she unsure exactly what the process
was for drawing down on the indirect and that she would
have to get more information from the department.
Vice-Chair Fairclough believed that the Alaska Health Care
Commission was doing valuable work and that as noted in AS
18.09.010 was:
"…to provide recommendations for and foster the
development of a statewide plan to address the
quality, accessibility, and availability of health
care for all citizens of the state…"
Vice-Chair Fairclough wondered if from a financial
standpoint, an executive director on each of the state's
boards and commissions was the right approach for
management. She noted that each of the boards and
commissions required different General Fund dollars. She
recalled being an executive director in the past and that
there was never enough time in the day; however, she
wondered how many boards and commissions were out there and
how many executive directors were being paid for with
General Funds and not licensure receipts. She wondered if
the legislature should take a look to see the impact of
approving individual boards and noted that it never saw the
full impact because it was usually dealing with one board
at a time that was addressing a great need. She thought it
would be helpful to look at the cumulative cost of all of
the boards' and commissions' staffing because it would give
the state a chance to evaluate its investment and make
decisions of whether it wanted to invest it differently.
She supported the Alaska Health Care Commission and had no
problem with its extension; however, she did have an issue
with how the fiscal notes were viewed.
Vice-Chair Fairclough noted that when it came to health,
she wondered when the state would take on primary
prevention. She thought that the state could ask people to
be responsible for healthcare, but that if it did not start
educating earlier in the K-12 system on the ramifications
of choices in early life, it might "continue running the
marathon without actually ever reaching the finish line."
She thought that the commission was tasked with developing
a statewide plan for the quality, accessibility, and
availability of healthcare. She offered that at some point,
Alaska would have to partner with the youth of the state.
She pointed out that the education system was currently
struggling for funding and thought that some of that
struggle was related to the health care issues that
students were facing in their lives. She concluded that
health care issues were manifesting themselves in
classrooms and wondered when the state would intertwine the
money and resources together to help children lead the best
possible lives based on their family circumstances.
Dr. Hurlburt agreed with Vice-Chair Fairclough on the
primary prevention issue. He stated that the Alaska Health
Care Commission had essentially endorsed and advocated for
the priorities of the Division of Public Health. He
reported that one of the priorities of the division was
reducing obesity and overweight, which he offered would
probably be the dominate public health issue in the current
century. He stated that another priority was tobacco and
pointed out that significant progress was being made in
this area; additionally, there had been some progress made
on the problem of obesity and overweight. He stated that
immunizations, unintentional injury, fluoridation of public
water supplies were other priorities that the division and
the commission wanted to address. He added that
unintentional injury was still the biggest killer of people
age 1 through 44. He pointed out that the commission had
formally articulated all of the above priorities and that
they were identical with the priorities of the Division of
Public Health; furthermore, there was a lot of opportunity
in this area. He recalled that in his first 2 years of
practicing in Dillingham in the 1960s, there had only been
one person with diabetes and that no one had a heart attack
there during that time period; at the time, people had not
been smoking that long. He reported that as lifestyles as
changed, activity had been reduced, and diets changes, a
lot of instances of diabetes were affecting Alaska Natives;
additionally, as a result of changes, there were more
instances of obesity and overweight people in society. He
stated that the Center for Disease Control projected that
female babies born in the United States had a 38 percent
risk of developing diabetes as adult because overweight,
obesity, and inactivity. He concluded that he agreed with
Vice-Chair Fairclough.
10:14:34 AM
Vice-Chair Fairclough would not want to harm the delivery
of anything to Rural Alaska, but noted that she had visited
a hub community and had seen bypass mail at work. She
recalled seeing hundreds of cases pop being transported by
bypass mail. She thought that pop did not seem to be
helping with the issue of diabetes. She was not making a
judgment call on anyone who drank pop or on the cost of the
subsidy to deliver the pop; however, she was concerned
about the amount of sugar showing up in individual
communities. She thought that Dr. Hurlburt was speaking to
the right issue regarding obesity and diabetes in Alaska.
10:15:44 AM
Co-Chair Meyer expressed frustration at how many sodas were
in schools and noted that it was hard to find a diet soda.
10:16:17 AM
AT EASE
10:18:34 AM
RECONVENED
10:18:44 AM
SB 135 was HEARD and HELD in committee for further
consideration.
10:18:58 AM
Co-Chair Meyer thought that the Alaska Health Care
Commission and the Division of Legislative Audit had doing
a great job. He thought the bigger issue was that the state
had a lot of commissions that it created and wondered if it
might be beneficial to look at whether some of them could
be merged to keep costs down.
Senator Olson thought that particularly with an aging
population, there was nothing more important than having
the Alaska Health Care Commission.
CS FOR HOUSE BILL NO. 193(FIN)
"An Act relating to the joint administration of
tobacco taxes by the state and a municipality."
10:20:22 AM
Vice-Chair Fairclough MOVED to ADOPT the proposed committee
substitute for HB 193, Work Draft 28-LS0714/P (Bullock,
02/10/14) as a working document. There being NO OBJECTION,
it was so ordered.
DIRK CRAFT, STAFF, REPRESENTATIVE LANCE PRUITT, spoke to
the changes in the new committee substitute. He explained
that the bill title was expanded to include:
"; and authorizing the Department of Revenue to
furnish to a municipality returns or reports related
to the vehicle rental tax."
Mr. Craft continued to address the changes in the new
committee substitute and related that Section 1 of the
prior version was removed and replaced with Section 2,
subsection (e). He reported that Section 2 of the previous
version of the bill was now Section 1. He stated that in
Section 1, subsection (c), the wording "or other tobacco
products" was added. He stated that there were no changes
to subsection (d) of the bill and that subsection (e) was
added in to reflect the Department of Revenue's (DOR)
statutes that governed its inspection and copying of public
records, as well its disclosure of tax returns and reports.
He stated that originally Section 2, subsection (d) had
been in Section 1 of the previous version of the bill, but
that it had been very broad scoped in dealing with tobacco
taxes and the vehicle rental tax; when the section was
narrowed down, the 2 taxes were split, which resulted in
the title change and vehicle rental tax being moved to
Section 2 of the current version.
DANIEL MOOR, MUNICIPALITY OF ANCHORAGE, ANCHORAGE (via
teleconference), stated that the original version of the
bill had referenced a broader section of statute; however,
a lobbyist from one of the oil companies thought that the
statute might be too broad and could delve into other tax
return areas beyond the local taxes that were being
discussed. He reported that the intent had always been to
only focus on local taxes that were collected by local
governments and the state; the 2 examples of that type of
tax were the vehicle rental tax and the tobacco tax. He
reported that when the new committee substitute had been
formulated, the sponsors had worked with Johanna Bales to
make it very specific that the vehicle rental tax and
tobacco tax were the only 2 areas that were being discussed
in the bill regarding information sharing.
JOHANNA BALES, DEPUTY DIRECTOR, TAX DIVISON, DEPARTMENT OF
REVENUE, ANCHORAGE (via teleconference), stated that Mr.
Moor had given a good overview of what the new committee
substitute did. She reported that the original bill would
have allowed DOR to share all tax information with any
municipality, which represented a concern to some tax
payers; as a result, the bill had been narrowed to the two
tax types where local jurisdictions actually levied a
similar tax to the state.
10:25:07 AM
SB 193 was HEARD and HELD in committee for further
consideration.
10:25:44 AM
Co-Chair Meyer discussed the following meeting's agenda.
ADJOURNMENT
10:26:39 AM
The meeting was adjourned at 10:26 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 135 AHCC 2013 Annual Report.pdf |
SFIN 2/11/2014 9:00:00 AM |
SB 135 |
| SB 135 DHSS FN.pdf |
SFIN 2/11/2014 9:00:00 AM |
SB 135 |
| SB 135 AHCC Support.pdf |
SFIN 2/11/2014 9:00:00 AM |
SB 135 |
| SB 135 LBA Audit.pdf |
SFIN 2/11/2014 9:00:00 AM |
SB 135 |
| SB 135 Sponsor Statement.pdf |
SFIN 2/11/2014 9:00:00 AM |
SB 135 |
| CS for HB 193 version P.pdf |
SFIN 2/11/2014 9:00:00 AM |
HB 193 |
| HB 193 Concurrent Resolution Title Change.pdf |
SFIN 2/11/2014 9:00:00 AM |
HB 193 |