01/25/2008 01:30 PM Senate HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| SB212 | |
| SB245 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| * | SB 245 | ||
| = | SB 212 | ||
ALASKA STATE LEGISLATURE
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE
January 25, 2008
1:32 p.m.
MEMBERS PRESENT
Senator Bettye Davis, Chair
Senator Joe Thomas, Vice Chair
Senator Kim Elton
Senator Fred Dyson
Senator John Cowdery (via teleconference)
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 212
"An Act relating to eligibility requirements for medical
assistance for certain children and pregnant women; and
providing for an effective date."
MOVED SB 212 OUT OF COMMITTEE
SENATE BILL NO. 245
"An Act establishing the Alaska Health Care Commission and the
Alaska health care information office; relating to health care
planning and information; repealing the Certificate of Need
(CON) program for certain health care facilities and relating to
the repeal; annulling certain regulations required for
implementation of the Certificate of Need program for certain
health care facilities; and providing for an effective date."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 212
SHORT TITLE: MEDICAL ASSISTANCE ELIGIBILITY
SPONSOR(s): SENATOR(s) DAVIS
01/16/08 (S) PREFILE RELEASED 1/4/08
01/16/08 (S) READ THE FIRST TIME - REFERRALS
01/16/08 (S) HES, L&C, FIN
01/23/08 (S) HES AT 1:30 PM BUTROVICH 205
01/23/08 (S) <Bill Held Over to 1/25/08>
01/25/08 (S) HES AT 1:30 PM BUTROVICH 205
BILL: SB 245
SHORT TITLE: HEALTH CARE: PLAN/COMMISSION/FACILITIES
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/19/08 (S) READ THE FIRST TIME - REFERRALS
01/19/08 (S) HES, FIN
01/25/08 (S) HES AT 1:30 PM BUTROVICH 205
WITNESS REGISTER
SARALYN TABACHNICK, Executive Director
Aiding Women in Abuse and Rape Emergencies, Inc. (AWARE)
Juneau, AK
POSITION STATEMENT: Supported SB 212.
STEVE HORN, Executive Director
Alaska Behavioral Health Association
Soldotna, AK
POSITION STATEMENT: Supported SB 212.
KIM ADALIA-LEFF
Interior Alaska Center for Non-Violent Living
Fairbanks, AK
POSITION STATEMENT: Supported SB 212.
DR. BOB URATA MD
Family Practice Physician
Juneau, AK
POSITION STATEMENT: Supported SB 212.
ELLIE FITZGERALD, Director
Division of Public Assistance
Health and Social Services
Juneau, AK
POSITION STATEMENT: Answered questions about SB 212.
KARLEEN JACKSON, Commissioner
Department of Health and Social Services (DHSS)
Juneau, AK
POSITION STATEMENT: Presented SB 245.
DR. JAY BUTLER, Chief Medical Officer
Department of Health and Social Services (DHSS)
Juneau, AK
POSITION STATEMENT: Offered a presentation on the web-based
information center component of SB 245.
ROBERT JAMES CIMASI, President
Health Capital Consultants
St. Louis, MI
POSITION STATEMENT: Supported SB 245.
BRUCE JAMES
Alaska Surgery Center Inc.
Anchorage, AK
POSITION STATEMENT: Opposed SB 245.
ROD BETIT, President and CEO
Alaska State Hospital and Nursing Home Association (ASHNA)
Juneau, AK
POSITION STATEMENT: Opposed SB 245.
ACTION NARRATIVE
CHAIR BETTYE DAVIS called the Senate Health, Education and
Social Services Standing Committee meeting to order at 1:32:22
PM. Senators Fred Dyson, Kim Elton, Joe Thomas, and Chair Bettye
Davis were present at the call to order. Senator John Cowdery
was attending via teleconference.
SB 212-MEDICAL ASSISTANCE ELIGIBILITY
CHAIR DAVIS announced consideration of SB 212 and asked if the
administration had anything to add regarding this bill. She then
opened the floor to testimony.
1:34:16 PM
SARALYN TABACHNICK, Executive Director, Aiding Women in Abuse
and Rape Emergencies, Inc. (AWARE), felt that SB 212 would be
very helpful to the people they serve, who are victims of
domestic violence and sexual assault.
1:36:30 PM
CHAIR DAVIS asked to hear from anyone who had concerns about or
opposed the bill. Those in favor of the bill were asked to raise
their hands and were noted by number. She then called for
testimony from witnesses present by teleconference.
STEVE HORN, Executive Director, Alaska Behavioral Health
Association and member of the Governor's Health Care Strategic
Planning Council, testified in support of SB 212 and encouraged
the legislature to move forward with the bill.
KIM ADALIA-LEFF, Interior Alaska Center for Non-Violent Living,
Fairbanks, testified in support of SB 212 as a single parent
dependent upon access to Denali Kid Care.
DR. BOB URATA, Family Practice Physician and member of the
Governor's Health Care Strategic Planning Council, Juneau,
Alaska, urged the legislature to pass SB 212 because it would
leverage federal money to assist the state in providing health
care to the 15,000 or more uninsured children in the state.
ELLIE FITZGERALD, Director, Division of Public Assistance,
Health and Social Services, Juneau, Alaska, offered to answer
any questions regarding the fiscal notes or enrollment.
SENATOR ELTON asked how many Alaskans would be added to the
program by changing the limit from 175 to 200 percent of the
federal poverty level.
MS. FITZGERALD responded that the department estimated 1277
children would be enrolled if the change were made as reflected
in the fiscal note. She added that when the level was changed to
175 percent, 843 more children were enrolled. She did not have
data available on the number of pregnant women who would be
enrolled if this change were made.
1:44:46 PM
SENATOR THOMAS moved to report SB 212 from committee with
individual recommendations and attached fiscal note(s). There
being no objection, the motion carried.
SB 245-HEALTH CARE: PLAN/COMMISSION/FACILITIES
1:45:25 PM
CHAIR DAVIS announced that the Governor's bill SB 245 was up for
consideration, and asked the administration to present an
overview including any amendments that they intended to offer.
She said she would take public testimony today and would take
another day to go through the bill with the committee for
questions, answers and suggested changes.
1:46:39 PM
KARLEEN JACKSON, Commissioner, Department of Health and Social
Services (DHSS), said this bill had three components. First, an
Alaska Health Care Commission tasked to create and maintain a
comprehensive Alaska health care plan. This came out of the
Governor's Health Care Strategies Planning Council and was
recognized by the Certificate of Need Negotiated Rulemaking
Committee. Second, a web-based information source where health
care consumers would be able to look at the services available
in any area of the state and compare the cost and quality of
those services. At this point, she turned the presentation over
to her colleague, Dr. Jay Butler, for a visual presentation of
the Department's vision for that web site.
1:48:11 PM
DR. JAY BUTLER, Chief Medical Examiner, Department of Health and
Social Services (DHSS), explained that the site would focus
first on providing health information to Alaskans to help them
make good health care choices and second on assisting them to
find economical, good quality health care. He demonstrated the
options offered on three existing web sites as examples of the
type of services that could be made available to Alaskans.
1:56:19 PM
COMMISSIONER JACKSON presented the third component of the
Governor's Health Care Transparency Act, which would address
repealing the Certificate of Need. She explained that the
Certificate of Need program was the one tool available to the
department to help ensure access to affordable health care. The
Certificate of Need Rulemaking Committee met to discuss how that
program might be modified to better meet Alaska's needs, but
those meetings did not produce solutions to the problems they
face with the CON. She felt that the CON could no longer provide
what Alaska needs in terms of market-driven health care.
2:01:03 PM
COMMISSIONER JACKSON added that the department was planning to
amend the bill to include a tiered approach to repealing the
Certificate of Need, leaving residential psychiatric treatment
programs, nursing homes and critical access hospitals on the CON
for two years beyond initial implementation of the bill.
She paused for questions before turning the presentation over to
an expert on the Certificate of Need program.
2:01:38 PM
SENATOR ELTON said he would hold his question on the Certificate
of Need until after the expert's testimony. He asked Dr. Butler
whether the Florida web site he used as an example expanded its
knowledgebase to Florida's equivalent of our "Medco", a pharmacy
benefit manager, and their drug prices, particularly through
mail-order services.
DR. BUTLER replied that he had not found that information on the
Florida site.
2:03:13 PM
SENATOR ELTON said it was easy to apply the issue of
transparency to the community drugstore, but states around the
nation were finding it difficult to apply transparency to
pharmacy benefit managers because of their relationships with
drug manufacturers, and were adopting statutory approaches to
the problem. He asked Commissioner Jackson if the department had
thought about that when it was putting the legislation together.
COMMISSIONER JACKSON said that, although they did not consider
it when drafting the legislation, they were doing so as they
considered implementation. She said that the CS referenced the
type of things that would be on the web site rather than
specific items; the intent was to empower consumers to make
choices with the information available to them.
SENATOR ELTON said he assumed that these issues might be
addressed through the proposed legislation, but transparency
might also occur through the contract between the state and the
pharmaceutical benefits manager.
2:05:58 PM
COMMISSIONER JACKSON replied that was an interesting thought,
but what they wanted to accomplish was to construct the
framework on which to hang the details of building this
information.
SENATOR ELTON commented that he would be bothered if the bill
required transparency of the neighborhood drug store and was not
applied to what he saw as an equal or greater problem when it
came to the cost of pharmaceuticals.
CHAIR DAVIS thanked him for bringing that forward and agreed
that it should be discussed.
2:07:13 PM
SENATOR DYSON asked Dr. Butler if he was contemplating any web-
based information on the safety of medical providers, such as
infection rates at specific hospitals, or malpractice incidents
related to providers.
DR. BUTLER replied that safety information could certainly be
incorporated and was available on some state's sites.
SENATOR DYSON asked if that would be a good policy, and whether
it was the intention of the administration to put that
information on the web in the future.
DR. BUTLER replied that it could be a very useful tool, but
there were caveats and he could not give a simple yes or no
answer.
2:09:51 PM
SENATOR DYSON asked if the state could be sued for publishing
truthful but derogatory information about a particular facility.
DR. BUTLER replied that legal council would have to be involved,
and noted that the Attorney General, rather than their health
officer, was the lead for the Florida web site on drug costs.
SENATOR DYSON remarked that, as Senator Elton mentioned, a
number of rural Alaskans got their prescriptions through the
mail. He wondered whether the proposed web-based information
system would let patients know where they could find medications
when there was no local pharmacy.
DR. BUTLER said that was not the intention of the site. The
focus was to provide the information to those who were not
already shopping online and perhaps to provide more attractive
and safer options to the internet shoppers.
2:12:21 PM
CHAIR DAVIS thanked the committee for bringing these questions
forward, but said that what they needed was an overview of what
the Administration wanted to accomplish. They could deal with
the details of modifying the bill later.
SENATOR THOMAS asked if the states that had implemented this
type of web site had studied what benefit might come back in the
form of reimbursements.
DR. BUTLER replied that he had not researched that thoroughly.
However Kentucky, another state that had a good wellness and
health risk assessment tool, had linked it to a site for state
employees. Kentucky told him that although they were still
working on the calculations, they were aware of at least seven
cases where they believed they had averted bariatric surgery by
becoming more actively involved in managing obesity and diabetes
in at-risk state employees. Those surgeries would have cost more
than the state's entire information program.
2:15:14 PM
SENATOR THOMAS commented that by the time people started looking
for information on prescriptions and procedures, they already
had health problems. He thought the state should be intervening
much earlier in life by improving health education in the
schools.
2:15:51 PM
SENATOR ELTON followed up on Senator Thomas' comment by telling
the committee that many communities, including Juneau, had
adopted a "healthy habits" approach that was successful in
reducing health care costs. He asked whether that was considered
at all when drafting the legislation.
COMMISSIONER JACKSON replied that this bill was a starting point
and she looked forward to further discussions.
CHAIR DAVIS said the Health Strategy Council had discussed all
of the issues that were brought up during this meeting and many
could be found on the Council's website. She pointed out that
their packets should contain a list of all of the topics the
Council had approached and the studies it had considered.
2:17:16 PM
COMMISSIONER JACKSON reminded them that the bill was not only
about repealing the Certificate of Need; all three pieces were
interactive. She invited Robert Cimasi, an expert around the
issues of the CON, to present his material.
CHAIR DAVIS asked Commissioner Jackson to present her assessment
of the bill and the amendment she referenced earlier before
turning the floor over to Mr. Cimasi.
COMMISSIONER JACKSON replied that there had been a lot of
contention around this issue and that, despite the efforts of a
committee to come to consensus regarding how they might improve
the CON program, tightening the process had not improved the
situation. She said that repealing the Certificate of Need
program was a better course of action. She said DHSS saw the
Health Care Transparency Act as the beginning of the
conversation about all three components of the bill.
2:19:28 PM
ROBERT JAMES CIMASI, President, Health Capital Consultants, St.
Louis MI, supported SB 245.
He said that based on his experience working with health care
providers, the committee should advance SB 245 and repeal
Certificate of Need regulation in the State of Alaska. He listed
some major points outlined in his written testimony:
1. The CON had a consistent history as a failed health
planning policy tool as far back as the mid-seventies. It
was a reaction to health care being paid for on a cost plus
basis, and within that structure the costs to develop
facilities were passed on with a guaranteed margin.
2. By the early 1980's, health care was being paid for on a
prospective payment system. Providers and hospitals were
told in advance what they would be paid for procedures, so
the sole purpose for Certificate of Need was eliminated.
3. The Con was repealed entirely in 14 states and partially in
many others.
4. A study published by the University of Washington found
that in eight of the states that had repealed the CON,
there was no evidence to support an increase in costs.
While there was conflicting or limited evidence regarding
the availability of health care services, any surges tended
to moderate over time.
5. In 1998 a Duke University study also found no evidence of
increased expenditures following the repeal of Certificate
of Need.
6. The Federal Trade Commission (FTC) repeatedly denounced the
CON and encouraged states to consider whether the CON best
served their citizens' health care needs. In July 2004 a
joint study with Department of Justice concluded that there
was significant evidence that the CON actually drove up
costs by fostering anti-competitive barriers to market
entry of better options.
7. In 2005 the FTC presented a statement before the
Subcommittee on Federal Financial Management stating that
the efficacy of the CON was such that it should be
discontinued.
2:27:50 PM
He directed the committee to references in his written testimony
to a significant amount of additional research regarding those
issues.
2:28:11 PM
MR. CIMASI stated that in the failure to lower health care costs
there was significant denial of access to patient choice. This
effect would be exacerbated in a state like Alaska, with a
widely dispersed population and huge geographic proximity
challenges.
He said that the Certificate of Need was very anti-provider,
protecting the interests of large hospital systems and creating
a barrier to recruitment in underserved areas. He could find no
evidence that the CON served health care quality and concluded
that the Certificate of Need had outlived its usefulness. With
the focus on transparency, there was a huge movement away from
defined benefit and toward defined contribution plans. He felt
that the Certificate of Need program presented a significant
impediment to structuring a provider network in Alaska to
facilitate high quality services. Significant litigation
regarding the CON was diverting funds away from patient care and
dissuading new provider enterprises from coming to Alaska.
2:32:59 PM
MR. CIMASI committed Health Capital Consultants to continue its
research into the CON and to making what they learn available to
the committee. He thanked the committee for their time and urged
them to repeal Certificate of Need in Alaska once and for all.
2:33:34 PM
CHAIR DAVIS asked how their research took into consideration the
uniqueness of Alaska's health care system.
MR. CIMASI clarified that he was testifying as a public health
policy expert, not as a paid consultant, and said he supported
the repeal of the CON on an informed basis. He said Health
Capital Consultants had just completed a major client engagement
in Alaska involving several hundred hours of research into the
utilization demand for inpatient and outpatient services,
including the geographic dispersion of provider patterns in the
state and the continuing challenge of physician manpower
shortages.
2:35:38 PM
SENATOR ELTON thanked Mr. Cimasi for his testimony. He said that
Mr. Cimasi was described by the executive who submitted the bill
as an expert, but he had never heard a description of the
Certificate of Need in such black and white terms. He asked if
it would be fair to characterize Mr. Cimasi not as an expert,
but as an advocate for one point of view.
MR. CIMASI responded that he was an advocate for his own
informed opinion that the Certificate of Need did not meet its
stated purpose of lowering costs, and that he didn't know of any
expert in the country who could testify that it did work. He
reiterated that he was not an advocate for any client or group
of providers and that they embarked on their research without
any predetermined outcome in mind.
2:38:22 PM
SENATOR ELTON commented that Mr. Cimasi had used some pretty
strong language in support of his position, but there were other
experts who could also inform the committee. In his community he
would submit his hospital as an expert, and they came to an
exactly opposite conclusion.
He pointed out that in the eight of the states Mr. Cimasi said
had repealed the Certificate of Need, a patient could drive
somewhere else to get services, which was not possible in many
Alaskan communities.
2:40:12 PM
MR. CIMASI responded that in those communities where hospitals
were in an oligopoly position, they found the CON very
convenient, because it was inconvenient to have to deal with
competition. That did not mean that their position was correct
from a health policy planning perspective, and all of the
research he had been privy to demonstrated that. So, while he
could understand and sympathize with the views of a community
hospital that didn't find competition convenient, and he had no
"bone to pick" with someone who had the day in, day out
obligation to serve patients in his community, he believed that
the empirical research he tried to present in his testimony
stood on its own.
SENATOR ELTON said he thought there were areas of gray here, and
that Mr. Cimasi seemed to be implying that his community
hospital and other health care providers in this state were
lying, or had closed their eyes to the empirical data.
MR. CIMASI declared that he had never stated or implied such a
thing, and that he would never say that someone who disagreed
with him or his research was not legitimately presenting their
viewpoint.
2:43:26 PM
SENATOR THOMAS asked if Mr. Cimasi's report addressed how they
might guarantee access to health care to low income families and
people without insurance. He wondered whether the eight states
that had repealed the CON had taken any other steps to ensure
that people were not denied treatment because they were low
income or did not have insurance.
MR. CIMASI replied that he believed several states had taken
steps to ensure licensed providers do treat certain classes of
patients under specific circumstances; but the Certificate of
Need didn't really address that. He said it was his
understanding that the purpose of the CON regulation in Alaska
was to save costs, not to assure treatment to any class of
patient so, while he thought it was a grave concern, he did not
believe that repeal of the CON would have any effect on access
to services.
2:46:18 PM
CHAIR DAVIS asked if the administration had any other comments.
COMMISSIONER JACKSON said the previous discussions served to
show just how contentious this issue can be. She pointed out
that it was not about liberal or conservative, Republican or
Democrat, but about all Alaskans, and would take everyone
working together to come to some resolution. She asked that they
take up the amendments at another meeting to allow for further
testimony.
2:47:23 PM
BRUCE JAMES, Alaska Surgery Center, said the Center had 26
physician partners and was very much in favor of keeping the
Certificate of Need. He sat on the Negotiated Rulemaking
Committee, which voted by a 98 percent margin to retain the CON,
although all present agreed that it needed some modification.
2:49:23 PM
CHAIR DAVIS asked for comments on provisions in the bill other
than the Certificate of Need.
2:49:40 PM
ROD BETIT, President and CEO, Alaska State Hospital and Nursing
Home Association (ASHNA), representing approximately 37 member
organizations, said that ASHNA was very concerned that repeal of
the Certificate of Need was a part of the Transparency Act. He
had served on both the Health Care Strategies Planning Council
and the Negotiated Rulemaking Committee and participated in DHSS
interim hearings on the Certificate of Need; he did not expect
the bill to call for repeal when over 90% of the participants in
the hearings felt the CON should be retained and modified. Also,
they had negotiated with the key parties in the appeals before
the department since those meetings, in order to come up with
alternative language to place before the legislature that should
take those appeals off the table.
He said he would like to see the administration's amendments and
meet with his members before making additional comments, but
went on to say that the statewide health plan is a great idea
that should move forward. He continued that the health care
commission was something they supported conceptually as a
vehicle through which to continue productive discussion for
presentation to the legislature on how to improve access and/or
costs in this state. They also supported the concept of
information reporting, but would want to talk about how it would
be structured and the timing for it.
He made clear that he did not agree with Mr. Cimasi and that
there were other experts who would testify to how well the
Certificate of Need had served the state.
2:55:59 PM
CHAIR DAVIS said they had run out of time and would take public
testimony at the next meeting. She invited those who did not
have the opportunity to testify today to come back and testify
the next time the bill was on the schedule. She held SB 245 in
committee.
CHAIR DAVIS adjourned the meeting at 2:57:38 PM.
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