Legislature(2007 - 2008)BUTROVICH 205

01/25/2008 01:30 PM HEALTH, EDUCATION & SOCIAL SERVICES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
* SB 245 HEALTH CARE: PLAN/COMMISSION/FACILITIES
Heard & Held
= SB 212 MEDICAL ASSISTANCE ELIGIBILITY
Moved SB 212 Out of Committee
<Bill Held Over from 1/23/08>
                    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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