HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE March 7, 1996 4:12 p.m. MEMBERS PRESENT Representative Con Bunde, Co-Chair Representative Cynthia Toohey, Co-Chair Representative Gary Davis Representative Norman Rokeberg Representative Al Vezey Representative Caren Robinson Representative Tom Brice Representative Al Vezey MEMBERS ABSENT None COMMITTEE CALENDAR *HOUSE BILL NO. 318 "An Act relating to advance directives for mental health treatment." - PASSED OUT OF COMMITTEE HOUSE BILL NO. 515 "An Act relating to grants for residential services for certain minors for whom the state has assumed responsibility; and providing for an effective date." - PASSED OUT OF COMMITTEE *HOUSE BILL NO. 528 "An Act relating to applications for certificates of need and licensing of nursing homes; amending the standard of review for certificates of need for health care facilities in the state; establishing a moratorium with respect to new applications by prohibiting the issuance of a certificate of need or a license for additional nursing home capacity in the state until July 1, 1998; and providing for an effective date." - HEARD AND HELD (* First Public Hearing) PREVIOUS ACTION BILL: HB 318 SHORT TITLE: MENTAL HEALTH TREATMENT DECLARATIONS SPONSOR(S): REPRESENTATIVE(S) TOOHEY,B.Davis JRN-DATE JRN-PG ACTION 04/21/95 1427 (H) READ THE FIRST TIME - REFERRAL(S) 04/21/95 1427 (H) HES, JUDICIARY 03/07/96 (H) HES AT 4:00 PM CAPITOL 106 BILL: HB 515 SHORT TITLE: USE OF YOUTH SERVICES GRANTS SPONSOR(S): REPRESENTATIVE(S) WILLIAMS JRN-DATE JRN-PG ACTION 02/12/96 2729 (H) READ THE FIRST TIME - REFERRAL(S) 02/12/96 2729 (H) HES, JUDICIARY, FINANCE 02/29/96 (H) HES AT 3:00 PM CAPITOL 106 02/29/96 (H) MINUTE(HES) 03/07/96 (H) HES AT 4:00 PM CAPITOL 106 BILL: HB 528 SHORT TITLE: NURS.HOME MORATORIUM/CERTIFICATES OF NEED SPONSOR(S): FINANCE JRN-DATE JRN-PG ACTION 02/26/96 2884 (H) READ THE FIRST TIME - REFERRAL(S) 02/26/96 2884 (H) HES, FINANCE 03/07/96 (H) HES AT 4:00 PM CAPITOL 106 WITNESS LIST DOROTHY PEAVEY, Executive Director Mental Health Consumers of Alaska 430 West 7th Street, Suite 220 Anchorage, Alaska 99501 Telephone: (907)277-3817 POSITION STATEMENT: Testified on behalf of Mental Health Consumers of Alaska, in support of HB 318 LEONARD ABEL, Program Administrator Community Mental Health Services Division of Mental Health & Developmental Disabilities Department of Health & Social Services State of Alaska P.O. Box 110620 Juneau, Alaska 99811-0620 Telephone: (907)465-3370 POSITION STATEMENT: Testified on behalf of the Division of Mental Health, in support of HB 318 JAN MCGILLIVARY, PRESIDENT Alaska Mental Health Association 4050 Lake Otis Parkway, #202 Anchorage, Alaska 99508 Telephone: (907)463-0880 POSITION STATEMENT: Testified on behalf of the Alaska Mental Health Association, in support of HB 318 BILL CROSS Mental Health Consumers of Alaska 17346 Meadow Creek Drive Eagle River, Alaska 99577 Telephone: (907)696-1269 POSITION STATEMENT: Testified in support of HB 318 KATHERINE A. JOHNSON Alaska Mental Health Board 3100 West 71 Avenue Anchorage, Alaska 99524-0067 Telephone: POSITION STATEMENT: Testified on behalf of the Mental Health Board, in support of HB 318 STEPHEN ESSLEY, Attorney Disability Law Center of Alaska 615 East 82nd, #101 Anchorage, Alaska 99518 Telephone: (907)344-1002 POSITION STATEMENT: Testified on behalf of the Disability Law Center, in support of HB 318 BERRY JACK Mental Health Consumers of Alaska P.O. Box 141593 Anchorage, Alaska 99514 Telephone: 8\(907)338-0515 POSITION STATEMENT: Testified as a mental health consumer, in support of HB 318 ROBIN COE, President Mental Health Consumers of Alaska 430 West 7th Street Anchorage, Alaska 99501 Telephone: (907)277-3817 POSITION STATEMENT: Testified as President of the Board of Directors of MCHA, in support of HB 318 DIANE WORLEY, Director Division of Family & Youth Services Department of Health, Education & Social Services State of Alaska P.O. Box 110630 Juneau, Alaska 99811-0630 Telephone: (907)465-3191 POSITION STATEMENT: Testified on behalf of the Division of Family & Youth Services, in support of HB 318 JAY LIVEY, Deputy Commissioner Department of Health, Education & Social Services State of Alaska P.O. Box 11601 Juneau, Alaska 99811-0601 Telephone: (907)465-3030 POSITION STATEMENT: Testified on behalf of the Department of Health, Education & Social Services, in support of HB 528 CONNIE SIPE, Director Division of Senior Services Department of Administration State of Alaska 3601 C Street Anchorage, Alaska 99503-5984 Telephone: (907)563-5654 POSITION STATEMENT: Testified on behalf of the Division of Senior Services, in support of HB 528 DENNIS MURRAY, Administrator Heritage Place 232 Rockwell Avenue Soldotna, Alaska 99669 Telephone: (907)262-2545 POSITION STATEMENT: Testified via teleconference from Kenai, in opposition to HB 528 LEANNA SMITH P.O. Box 3103 831 South Chugach Palmer, Alaska 99645 Telephone: (907)745-3037 POSITION STATEMENT: Testified via teleconference from Mat-Su, with concerns regarding HB 528 GLORIA SIMEON, Executive Director Calista Elders Council 601 West 5th Avenue, Suite 200 Anchorage, Alaska 99501 Telephone: (907)279-8358 POSITION STATEMENT: Testified via teleconference from Anchorage, with concerns regarding HB 528 HELEN KEIM, Home Care Coordinator Homer Senior Citizens P.O. Box 1263 Anchor Point, Alaska 99556 Telephone: (907)235-7655 POSITION STATEMENT: Testified via teleconference from Homer, in support of HB 528 BRENDA STEENBLOCK Homer Senior Citizens P.O. Box 808 Homer, Alaska 99603 Telephone: (907)235-8075 POSITION STATEMENT: Testified via teleconference from Homer, in support of HB 528 ALYSHA MATHEWSON Homer Independent LIving Center 4556 Early Spring Homer, Alaska 99603 Telephone: (907)235-4046 POSITION STATEMENT: Testified via teleconference from Homer, in support of HB 528 JOYANNA GEISLER P.O. Box 2474 Homer, Alaska 99603 Telephone: (907)235-5401 POSITION STATEMENT: Testified via teleconference from Homer, in support of HB 528 JOE ALTER, Chairman Pioneers' Home Advisory Board P.O. Box 20304 Juneau, Alaska 99802 Telephone: (907)586-6680 POSITION STATEMENT: Testified on behalf of the Pioneers' Home Advisory Board and Alaska Commission on Aging, in support of HB 528 ACTION NARRATIVE TAPE 96-23, SIDE A Number 014 CO-CHAIRMAN CON BUNDE called the meeting of the House Health, Education & Social Services Committee to order at 4:12 p.m. Members present were Representatives Bunde, Toohey, and Vezey. Representatives Rokeberg, Davis, and Brice arrived shortly after the meeting started. HB 318 - MENTAL HEALTH TREATMENT DECLARATIONS  CO-CHAIR BUNDE announced that the first order of business would be House Bill 318. He called on the sponsor, Representative Toohey, to introduce the bill. Number 060 REPRESENTATIVE CYNTHIA TOOHEY stated that HB 318 would allow an individual to make advance directives regarding his or her mental health treatment. The person would need to be of sound mind when making the declaration, which would designate an attorney-in-fact who would act only when the individual was determined to be incapable. The directive would address the use of psychotropic medications, electro-convulsive therapy, and the length of short- term admission, up to 17 days, into a treatment facility. The declaration would be in effect for three years, unless the individual became incapable. In that case, the declaration would continue in effect until the individual was no longer incapable. While an individual is capable, he or she can revoke the declaration in whole or in part at any time. This declaration gives the individual the opportunity to make his or her wishes known about treatments--ones that have worked in the past, as well as ones that would be desired in the future, as well as treatments that have not worked in the past and would not be desired in the future. It provides for a substitute decision-maker with whom the doctor would consult should the declaration not be specific enough, or should the doctor recommend a treatment not specified. HB 318 is similar to an Oregon law. In Oregon they have found that individuals who have fought hospitalization and medication in the past, now were more willing to go to the hospital, because they had a declaration in place, and they felt their decisions would be heeded. HB 318 is supported by Charter North, Alaska State Hospital & Nursing Home Association, South Central Counseling Center, the Mental Health Association of Alaska, and the Mental Health Consumers of Alaska, and the Department of Health, Education & Social Services. There is a zero fiscal note attached. REPRESENTATIVE TOOHEY stated that there were a number of individuals present who wished to testify, including Dorothy Peavey of the Mental Health Consumers of Alaska, and Leonard Abel from the Department of Health, Education & Social Services. Representative Toohey noted that she remembered as a child receiving a very urgent letter from her cousin, who was schizophrenic, asking never to let her doctor use electro-shock therapy. CO-CHAIRMAN BUNDE acknowledged the presence of Representatives Robinson and Rokeberg. He stated that because of the lack of time, and the large number of persons wishing to testify, the committee would first hear all testimony, then address any questions. He then called on the first witness, Dorothy Peavey. Number 331 DOROTHY PEAVEY, Executive Director of the Mental Health Consumers of Alaska (MCHA), stated that MCHA is a nonprofit organization composed of individuals who suffer from mental illness. When her organization became aware of Oregon's law concerning advance directives for mental health treatment, it seemed like a natural thing for them to support. This proposed legislation gives a voice to people suffering from mental illness, at a time when their opinion would not normally be heard. It empowers consumers to make responsible decisions about their care, and provides a mechanism for those decisions to be carried forward at a time when they are incapable. She emphasized that the correct term is incapable, not incompetent. Incompetency is decided by a judge. To become incapable under this legislation, a person would have to at one point have filled out a declaration. Then, in the opinion of two physicians (one of whom is a psychiatrist), or a physician and a professional mental health clinician, the person would be found to be incapable, and the mechanism would take effect. At that point, upon the advice and council of the attorney-in-fact, the individual could be hospitalized for a period of up to 17 days, without having to go to court to be found incompetent. Decisions about treatment would also take effect. If a person had a history with a medication, then they could make their wishes known, and the doctor would have to pay attention to those wishes. MS. PEAVEY stated that she has discussed HB 318 with providers from across the state, and that it has been endorsed by the Mental Health Providers Association, as well as the groups and individuals named by Representative Toohey. The bill has support from families, consumers, and providers. One question that came up in the Senate hearing was why 17 days was chosen for the time period a person could be hospitalized. She emphasized that this was a reasoned number. If a person were to be hospitalized on a Friday afternoon, the 17 days would provide 10 days of evaluation and treatment, if one of the weekends was a three day holiday. At that point, the doctors could decide if the individual had made a significant improvement, or whether the individual needed to be held. Ms. Peavey then invited questions from the committee. Number 609 CO-CHAIRMAN BUNDE noted for the record that Representative Brice had joined the meeting. Co-Chairman Bunde then called on the next witness, Leonard Abel. LEONARD ABEL, Ph.D., Community Mental Health Services Program Administrator, Department of Health, Education & Social Services (State of Alaska), stated he would testify in support of HB 318. Dr. Abel stated that he previously worked for Southcentral Counseling Center in Anchorage. About 11 years ago, a client came to him and asked if there was a document she could sign, so that if she became incapable, she would receive the proper treatment. At the time, there was no such document. Dr. Abel recognized that the client understood her illness, and knew that if she became incapable, she might resist treatment, and would have to be involuntarily committed. If, on the other hand, she had signed a declaration such as embodied in HB 318, this could be prevented. Persons with mental illnesses, when stabilized on medication, can make reasonable decisions. When the illness is out of control, the capacity to make such decisions is gone. Dr. Abel reiterated that he very strongly supports the bill. It seems to have good safeguards for the patient, for the attorney-in-fact, and for the mental health professionals. Number 946 CO-CHAIRMAN BUNDE called on the next witness, Jan McGillivary. JAN MCGILLIVARY stated she would speak as President/CEO of the Alaska Mental Health Association (AMHA), and also on behalf of the Building Bridges Campaign, and the Alaska Mental Health Program Director's Association. As President of AMHA, she represents 600 Alaskans. These kinds of advance directives are very common for persons suffering from HIV and other grave illnesses. As President of AMHA, she believes the proposed bill is long overdue. The Building Bridges Campaign and the Alaska Mental Health Program Director's Association also strongly support the bill. Ms. McGillivary noted that she has an allergy to codeine, and therefore she has a personal advance medical directive on file. She stated that in her 15 years in the mental health field, she has encountered many consumers who know they are allergic to certain medications. The proposed legislation would address that problem. She urged the committee to pass the bill. Number 1075 CO-CHAIRMAN BUNDE called on the next witness, Bill Cross. BILL CROSS, a member of the Mental Health Consumers of Alaska, stated that he was once determined to be mentally "incontinent," but had recovered from the condition. He further stated that he supports HB 318, because he is aware that there are some treatments he does not respond well to. By signing such a declaration, he can help his doctors, by letting them know what he has responded well to in the past. Number 1153 KATHERINE A. JOHNSON, a member of the Alaska Mental Health Board, stated that the board supports HB 318. The board applauds the work of MCHA in developing this legislation. The Advance Directives bill extends to consumers of mental health services an important control mechanism over their own treatment. Control of personal destiny is essential to human dignity. HB 318 provides a means by which difficult situations may be anticipated and addressed, giving consumers a voice they have previously lacked. The board joins the mental health community in urging the House Health, Education & Social Services Committee to move HB 318, with favorable recommendations. Number 1201 STEVEN ESSLEY, an attorney with the Disability Law Center of Alaska, stated that the center supports HB 318. He noted that there may actually be a negative fiscal impact from the bill, since it would preclude the need for an involuntary commitment hearing. The Office of Public Advocacy has said that there are about 180 involuntary medication hearings each year. This bill might also eliminate the necessity for a number of those hearings. He reiterated that the Disability Law Center of Alaska supports HB 318. Number 1294 BERRY JACK, a consumer with Mental Health Consumers of Alaska, stated he does not have a family which is legal defined by law. He does have a power of attorney. This bill would allow him to complete all avenues of his life. HB 318 would give him a voice and protect his rights. He asked that the committee support the bill. Number 1350 ROBIN COE, President of the Board of Directors for the Mental Health Consumers of Alaska, testified that the proposed legislation was vital. Number 1375 CO-CHAIRMAN BUNDE asked if anyone else wished to testify regarding HB 318. Seeing there were no further witnesses, Co-Chair Bunde closed the public testimony on HB 318. He then asked for questions or comments from the committee. REPRESENTATIVE TOM BRICE commented that the proposed legislation was long overdue. REPRESENTATIVE NORMAN ROKEBERG moved that the House Health, Education & Social Services Committee pass HB 318 from committee, with individual recommendations and a zero fiscal note. There being no objections, HB 318 was passed out of the House HESS Committee. HB 515 - USE OF YOUTH SERVICES GRANTS Number 1469 CO-CHAIRMAN BUNDE announced that the next order of business to come before the committee was HB 515. KYLE JOHANSEN, staff to Representative Bill Williams, stated that a hand-out on the bill had been delivered to each committee member's office, and that Tom Lane, of the Department of Health & Social Services, was available to answer questions. Number 1580 DIANE WORLEY, Director, Division of Family & Youth Services, Department of Health, Education, & Social Services, State of Alaska, stated that the division supports HB 515. She previously worked for a direct service provision agency. Because the agency was prohibited from using grant funds to purchase a building, they had to move frequently. This resulted in confusion for clients. To remedy the situation, her organization established a private, non-profit foundation, which purchased the building, and then rented it to the agency. This was appropriate and legal, but a direct route would have been much easier. Ms. Worley emphasized that the proposed legislation would strengthen client services by providing consistency, and represents good business practice for nonprofit organizations. She invited questions from the committee. Number 1659 CO-CHAIRMAN BUNDE asked for further testimony. There being no further testimony, public testimony on HB 515 was closed. REPRESENTATIVE ROBINSON asked if previous problems relating to the bill had been solved. CO-CHAIRMAN BUNDE replied that they had. Number 1707 REPRESENTATIVE BRICE stated that this bill would actually result in a reduction in costs to the state. He moved HB 515 with zero fiscal notes and individual recommendations be passed out of the committee. REPRESENTATIVE ROBINSON asked how maintenance needs would be dealt with, once a building was purchased. CO-CHAIRMAN BUNDE responded that whether a building is purchased or rented, there are still maintenance needs. There being no objections, House Bill 515 with zero fiscal notes and individual recommendations was passed out of the House Health, Education & Social Services Committee. HB 528 - NURS.HOME MORATORIUM/CERTIFICATES OF NEED Number 1835 CO-CHAIRMAN BUNDE announced that the next order of business to come before the committee was HB 528. JAY LIVEY, Deputy Commissioner, Department of Health & Social Services, that stated he would give a brief overview of the bill. The certificate of need process is a planning process by which the state reviews the appropriateness of the development of hospitals and nursing homes in the state. Applications are made to the state for projects in excess of one million dollars of capital cost, and the state reviews them against criteria which are established in the existing certificate of need law. A project must have a certificate of need from the state in order to proceed. MR. LIVEY further explained that if the one million dollar threshold is not exceeded, then existing beds can be converted. In the past, hospital beds have been converted to long-term care beds. As long as one million dollars is not expended, this process is allowable under current law. HB 528 makes two changes to existing law. First, it defines a criteria by which applications for certificates of need are reviewed. Currently, the review criteria is primarily based on the need for a particular service. If an application shows that a particular service area lacks enough nursing home beds, then the certificate will most likely be granted. One of the changes in HB 528 would be to apply a cost effectiveness criteria to the request. In addition to surveying need, the division could also determine if the proposed service would be the most cost effective way to meet the need. MR. LIVEY stated that the proposed bill would also propose a two- year moratorium on the granting of a certificate of need or the licensing of additional long-term care beds in the state. This section is needed to stop the conversion of nursing home beds. He noted that the proposed moratorium would not apply to extended care or sub-acute care beds. Mr. Livey explained that the Department of Health & Social Services supports HB 528, because the department expects to spend about $54 million on nursing home care during the current fiscal year, which represents care for about 640 Alaskans in nursing homes. Nursing home care costs an average of about $86 thousand per year per patient. Of all nursing home revenues in the state, 85 percent come from Medicaid. In contrast, the cost of supporting a person in the home and community-based waiver program is about $30 thousand per year. Over the next few years, there is a potential for 160 new nursing home beds to be added in the state, both through conversions and new construction. If this were to happen, the annual total cost to the state would be about $47 million. The department believes that the state cannot control the Medicare budget, given this kind of growth in long-term care beds. Thus, HB 528 would help the state in its cost containment efforts. Number 2055 CONNIE SIPE, Director, Division of Senior Services, Department of Administration (State of Alaska), stated that the proposed moratorium was also a response to the changing budget situation, both state and federal. The division believes that putting a moratorium on the licensing of nursing home care beds will give the home and community care system time to grow and catch up, which will benefit everyone. Home and community care is not only less expensive for the state, it is also more often cost affordable by the family or individual, which means they can carry a larger proportion of the cost of care. The growth of the home health care system means that public money is being better spent. MS. SIPE also commented that professionals in the field of aging are trying to move away from the idea that long-term care is an unavoidable part of the continuum. Long-term care is now viewed as part of a network, which also includes home care and assisted living alternatives. If home health care and assisted living are added on to family care, many people may never need a nursing home bed. Number 2190 REPRESENTATIVE TOOHEY asked what would happen to pending certificate of need applications under the proposed legislation. MR. LIVEY responded that the applications would be reviewed under the new criteria. REPRESENTATIVE TOOHEY then asked what would happen if a certificate had already been granted. MR. LIVEY replied that if a certificate had already been granted, then the project could go forward. CO-CHAIRMAN BUNDE announced that teleconference testimony would now be taken. He called on the next witness, Dennis Murray, via teleconference from Kenai. DENNIS MURRAY, Administrator of Heritage Place in Soldotna, Alaska, stated that he had a different perspective on HB 528. For example, he said, the legislation references a low occupancy rate for nursing homes in Alaska. However, this is not true in southcentral Alaska. Both facilities in Anchorage are at near 100 percent occupancy. His own facility has run between 97 and 100 percent occupancy for the past 12 months. TAPE 96-23, SIDE B Number 001 MR. MURRAY further noted that the state has, in fact, two nursing home systems, which include private facilities and the Pioneer Home system. He also observed that Alaska has one of the lowest per capita nursing home populations in the country. But, we also have an exploding elderly population. He commented that the proposed legislation appears short-sighted. Number 037 LEANNA SMITH, of the Palmer Senior Center, testified via teleconference from Mat-Su. She agreed with Ms. Sipes that the cost of home and community-based care was much lower than nursing home care. She stated, however, that only a small number of people can currently receive help from the state for the cost of home care. She stated that if nursing home beds are available, Medicaid will pick up the cost for people who cannot afford to pay. However, if no beds are available, and assisted living funds are also unavailable, people will be left without care. Ms. Smith asked if there would be some way to transfer funds from Medicaid to help with assisted living. Number 074 GLORIA SIMEON, Executive Director of the Calista Elders Council, testified via teleconference from Anchorage. Ms. Simeon stated that since 1986 the elders of the Calista region have worked to organize themselves so that the regional entity could provide services and programs to them responsive to their needs. The council is concerned that too many elders have to leave the region to receive the medical care and services they require. She stated that elders are forced to leave their homes, families, friends, and most important their language. They are relocated to unfamiliar environments, and exposed to a language and way of life that is not their own. No roads link the Calista region to the rest of the state, and the cost of a ticket from one of the regional villages to Anchorage is in excess of seven hundred dollars. The region is also one of the most economically depressed in the state, and most families cannot afford the cost of even an annual visit to their elderly relatives in nursing homes. Left alone in an unfamiliar environment, the elders lose their will to live and often come home in a short period of time, to be buried. This conflicts with the values and traditions of the Yupik culture. MS. SIMEON stated that while she understands the reasoning behind the proposed legislation, she is also aware that the majority of nursing homes are located in urban centers. She further understands that the rural health corporations are developing and expanding programs to offer home care delivery, and are considering assisted living centers as a viable option on a community level. However, the reality is that there is a need for a nursing home facility in the Calista region, and the regional hospital is an ideal place to locate such a facility. MS. SIMEON further stated that a study done by the state of Alaska in 1993 showed 41 Calista elders in nursing facilities throughout the state, and that being forced to relocate resulted in poor adjustment and a much higher death rate. The study also indicates that the two fastest growing segments of our population are elders, age 65 and over, and children age 5 and under. With the number of elders increasing, the state needs to examine how future needs will be met. She proposed that, rather than putting a moratorium on nursing homes and beds, the state should take a serious look at the present and future needs of its elders, and focus on how these needs can be met. In closing, Ms. Simeon suggested that elders should be involved in the development of any plan, and that they should be able to live out the remainder of their lives as close to their homes as possible. Number 219 HELEN KEIM, Care Coordinator, Homer Senior Citizens, testified via teleconference from Homer. Ms. Keim stated that she supports HB 528. She urged the committee's support for the Choice medicaid waiver program for the elderly, and asked the committee not to cut funding for the program. The average cost of a Choice client is $25 to $30 thousand annually, as opposed to $100 thousand or more for each long-term care patient. Also, the Choice program keeps clients in their own homes, as opposed to an institution. CO-CHAIRMAN BUNDE announced that a number of people still wished to testify. He stated he would attempt to hear the bill again on Tuesday, March 12. Number 293 BRENDA STEENBLOCK, Administrative Assistant, Homer Senior Citizens, testified via teleconference from Homer. Ms. Steenblock stated that Homer's new, 40 unit assisted living facility is scheduled to open in May. She stated that Homer Senior Citizens supports HB 528. Number 325 ALYSHA MATHEWSON, of Homer Independent Living Center, testified via teleconference from Homer. Ms. Mathewson stated that she supports HB 528 because the state needs to develop home and community-based services as an alternative to costly nursing home facilities. Each person receiving extended care has their own personal circumstances. Some would choose to stay at home, but cannot afford to pay the cost of a home health aide. These fees would total approximately $240 per day, but Medicaid doesn't cover this service. In the Palmer area, Medicaid pays about $12 thousand per month for long-term care. If this amount were instead paid directly to the certified home health aides, there would be a savings of $4800 per month. MS. MATHEWSON stated that she would also like to see further development of the Medicaid Choice program. She urged the committee to pass the bill, keeping mind that changes in the health care delivery system are urgently needed. Number 400 JOYANNA GEISLER, of Homer, testified that she provides services for people with disabilities throughout the entire Kenai Peninsula. She stated that she supports HB 528. All of her clients with disabilities would definitely prefer to receive community-based services, rather than live in nursing homes. She noted that such community-based services cost about one-third the amount of institutional care. Ms. Glyser stated the bill seems to be a win- win situation, as it would reduce costs to the state and improve the quality of life for disabled and elderly Alaskans. She further noted she supports limiting the growth of long-term care beds, and diverting the resulting funds into community-based services. Number 462 REPRESENTATIVE TOOHEY mentioned the handout received from Homer Senior Citizens. She noted that the handout compares the price of services available, and contrasted this with materials received from Providence Hospital, which do not mention cost. CO-CHAIRMAN BUNDE responded that information on cost of services could most likely be obtained before the bill was heard again. Number 504 JOE ALTER, Chairman of the Pioneer's Homes Advisory Board and a member of the Alaska Commission on Aging (ACOA), stated that the Pioneers' Homes Advisory Board represents roughly half of the long- term care beds in the state. On behalf of the Commission on Aging, Mr. Alter read a resolution, as follows: "Alaska Commission on Aging Resolution 96-3, In support of a moratorium on construction of additional facility beds: "WHEREAS Alaska's existing long-term care system is now largely made up of institutional, long-term care services; and "WHEREAS the current availability of nursing home beds in many areas exceeds the actual need for nursing home beds in the state; and "WHEREAS Alaska's seniors have indicated through surveys an overwhelming preference for alternatives to nursing homes, and they want to live in the least restrictive setting close to family and friends; and "WHEREAS seniors often have to choose nursing home care, which is the most intensive, restrictive and expensive type of care, because there is no community-based service available; and "WHEREAS the future of Medicaid financing is under discussion at the federal level; and "WHEREAS the state Medicaid financing is finite, and is forcing choices among Medicaid programs; and "WHEREAS the growth and maintenance of much needed community-based care is threatened by construction of unnecessary nursing home beds; and "WHEREAS if new nursing home beds are added, senior's choices will be restricted, because new nursing home beds compete directly for public funds available for community-based services; and "WHEREAS HB 528 will encourage the development of home and community-based services, and allow time for Alaska to move toward a more balanced, long-term care system; "NOW, THEREFORE, BE IT RESOLVED that the Alaska Commission on Aging strongly encourages the Alaska legislature to enact HB 528, which would place a two year moratorium on new, nursing home beds. "Adopted this 5th day of March, 1996. Donald M. Hoover, Chair, Alaska Commission on Aging" This concluded Mr. Alter's testimony. Number 653 HARLAN KNUDSON, representing the Alaska State Hospital and Nursing Home Association, stated that he is a strong proponent of home and community-based care, but that his organization opposes HB 528. The association shares the concerns about cost, but disagrees with this approach to solving the problem, and with the findings of the bill. They do not agree that there is an overabundance of nursing home beds in the metropolitan areas of the state. He referred to a January 31, 1992, census report on licensing and certification, which shows 764 beds being reimbursed in the Medicare system. He stated this is important, because it disputes other figures relating to the number of licensed beds in the state. MR. KNUDSON further stated that the 1992 report shows 100 percent and 98 percent occupancy for nursing homes in Anchorage. One of the pending certificates of need, which would be impacted by the proposed legislation, is for a nursing home in the Palmer/Mat Su area. Mr. Knudson pointed out that the 1996 census report shows that rates for nursing home care in Anchorage have actually shown a slight decrease since 1992, in one center, and have only increased about $20 per day in another center. He also noted that, of the two centers in Anchorage, one is 98 percent full, and the other 96 percent. He stated that the bill proposes a solution which is far too simplistic. When nursing home beds are full, there is no place open for acute care and convalescent patients. They then have to stay in the hospital, which is the most expensive setting. Mr. Knudson also pointed out that in 1992, there were 764 licensed beds. In 1996, there are 768. This represents an increase of only four beds in five years. He summed up his testimony by calling the committee's attention to Section 2 of the bill, which changes the word "shall" issue a certificate of need to "may" issue a certificate of need. This refers to situations where the criteria have already been met. Mr. Knudson reminded the committee that there is a big difference between "shall" and "may". The proposed statue would allow the department to deny a certificate, even when need has been proven. This represents a major change in public policy. MR. KNUDSON also stated that providers feel shut out of the policy- making procedure, with respect to long-term care. Perhaps a one year moratorium would be appropriate. The HESS Department should be required to work with advocacy groups, providers, bush and rural Alaska, and propose a bill that will meet the people's needs. He referred to a report by the American Association of Retired Persons which raises serious questions about the cost of home and community-based care. He reiterated that HB 528 does not effectively deal with problems in the system. CO-CHAIRMAN BUNDE announced that HB 528 would be scheduled for further hearing. ADJOURNMENT There being no further business to come before the House Health, Education & Social Services Committee, the meeting was adjourned at 5:30 p.m..