Legislature(2007 - 2008)HOUSE FINANCE 519
04/05/2008 12:00 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB196 | |
| HB337 | |
| SB229 | |
| SJR17 | |
| SB185 | |
| SB265 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 337 | TELECONFERENCED | |
| + | SB 185 | TELECONFERENCED | |
| + | SB 229 | TELECONFERENCED | |
| + | SB 265 | TELECONFERENCED | |
| + | SJR 17 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 196 | TELECONFERENCED | |
HOUSE BILL NO. 337
"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 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."
1:44:32 PM
KARLEEN JACKSON, COMMISSIONER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES presented an overview of the bill. She
indicated this was the Governor's Health Care Transparency
Act crafted after a year's work with input from two
different reports, the Governor's Health Care Planning
Strategy Council and the Certificate of Need Task Force. The
intent of bill was to have three components that worked
together to improve Alaska Health Care. She indicated the
three components of the bill to achieve this goal were to:
1. Create a Health Commission charged with making sure
Alaska has a state-wide plan responsive to changing
demographics and Market conditions to guide public and
private investments in the health care service system.
Begin policy discussion about tough issues like end of
life care.
2. Promote self-responsibility by giving Alaskans new
tools to take charge of their health and health care
options through a web-based information source that
makes clear the cost, availability, and quality of
those options.
3. Encourage healthy competition among providers of
health care so that consumer choice rather than
government and court intervention determines the cost,
availability and quality of health care by eliminating
Certificate of Need program.
The original bill had seven hearings in the House Health and
Social Services committee that resulted in the current
version of the bill.
Ms. Jackson presented a sectional analysis of HB 337,
Version N (copy on file).
Section 1
Provides for Legislative findings and intent to mandate
an evaluation of the state's health care needs, propose
reforms, and improve health care in Alaska by
establishing the Alaska Health Care Commission for the
purpose of developing a comprehensive policy that
better meets the current and long-range health care
needs in the state.
Sec. 2 AS 18.05.010(b)
Requires the Department of Health and Social Services
to implement a statewide health plan under AS 18.09,
which is a new chapter creating the Alaska Health Care
Commission.
Sec. 3 AS 18.07.031(e)
Amends definition of "expenditure" under the
Certificate of Need program.
Sec. 4 AS 18.07.111(8)
Under the Certificate of Need program, applies the
definition of "health care facility," if the hospital
facility or center is located in a municipality or
borough that has a critical access hospital or that has
a population of 60,000 or fewer persons (excluding
recipients of military or Indian Health Service health
care); and nursing homes, residential psychiatric
treatment centers; excludes Alaska Pioneers Homes,
offices of private physicians or dentists, and military
and tribal health entities.
Sec. 5 AS 18.07.111
Amends definitions of facilities in which Certificate
of Need applies, including: ambulatory surgical
facility, critical access hospital, independent
diagnostic testing facility, intermediate care
facility, kidney dialysis center, nursing home, office
of private physicians (50 percent owned and operated by
physicians), and psychiatric hospital.
Sec. 6 AS 18
Adds new Chapter 9, Statewide Health Information
Office; Article 1. Sec. 18.09.100 Establishes an Alaska
Health Care Information Office in the Department of
Health and Social Services to provide consistently
updated health care facility information to aid
consumers of health care services, and information to
encourage personal responsibility in prevention and
healthy living.
Sec. 18.09.110
Requires the department to establish and maintain a
database on an Internet website about health care
facilities services and cost. Information in the data
base includes health care facility information; health
care providers licensed in Alaska; a list of not more
than 1500 commonly prescribed medications in the state
and the cost; a list of not more than 250 most commonly
conducted medical procedures in the state and the cost;
hospital ratings; consumer education information on
health, insurance information, clinics that cater to
uninsured and self-pay patients; and quality of health
care facilities; and information regarding prevention
and healthy living.
Sec. 18.09.120
Requires health care facilities to provide the
department information related to the facility's health
care services for placement on the database developed
under AS 18.09.110.
Sec. 18.09.130
The Department of Administration, the Department of
Commerce, Community and Economic Development, and the
Department of Labor and Workforce Development, and the
Department of Law shall provide information for
placement on the database regarding adverse actions
taken against a health care facility or against
licensed professionals practicing in health care
facilities in the state and cooperate with the
department in performance of its duties under AS
18.09.100-18.09.130.
Article 2
Sec. 18.09.900
Allows the Department of Health and Social Services to
adopt regulations under AS 44.62 to carry out purposes
of this chapter.
Sec. 18.09.990
Provides definitions of facilities from which the
department would collect information.
1:50:43 PM
Sec. 7
Establishes a 16-member Alaska Health Care Commission
within the Department of Health and Social Services.
The purpose of the Commission is to consider the
spectrum of health care related issues and formulate
policy recommendations to be presented to the
legislature and executive branch; to develop a
statewide plan to address the quality, accessibility
and affordability of health care for all citizens of
the state; to provide an annual report to the
legislature that includes a comprehensive list of
policy options considered by the commission; and to
review and approve facility health care information for
placement on the department's Internet database
established under AS 18.09.110.
Section 2
Specifies that the plan contain a health care policy
and a strategy for encouraging: personal responsibility
and reductions in health care costs; access to safe
water and wastewater systems; development of a
sustainable health care workforce; accessible quality
health care; and an increase in the number of residents
who are covered by insurance.
Ms. Blaisdell described that the membership of the
commission includes:
1. The department medical director (chair)
2. A representative of the Mental Health Trust
Authority, appointed by the authority
3. A representative of the University of Alaska
health education and training programs appointed, by
the university
4. Seven public members including:
a. one member representing the Alaska Native
Tribal Health Consortium appointed by the
consortium
b. one member representing the Alaska Primary
Care Association, appointed by the
association
c. one member representing the Alaska State
Nurses Association, appointed by the
association
d. one member representing the health
insurance industry appointed by the governor
e. two health care consumers or advocates
appointed by the governor, one of whom will
be a small business owner in the state
f. six members of the legislature, three
appointed by the president of the senate and
three appointed by the speaker of the house
of representatives.
Ms. Blaisdell remarked that the terms of office are
staggered terms of three years. She noted that the
commission shall employ an executive director who is not a
member of the commission. She stressed that the Health Care
Commission will sunset on June 30, 2014.
Sec. 8
Directs the commissioner of the Department of Health
and Social Services and Department of Law to
immediately take steps to seek dismissal of pending
administrative appeals and court actions concerning the
issuance of certificates of need, as appropriate, under
AS 18.07, as amended.
Sec. 9
Allows the Department of Health and Social Services to
adopt regulations that are necessary to implement
changes made by this Act.
Sec. 10
Provides for the department of contract with an entity
to conduct a comprehensive study of the effects of the
certificate of need program in the state, and provide a
copy of the study to the legislature.
Sec. 11
Section 9 takes effect immediately (for the development
of regulations).
Sec. 12
Except as provided in sec. 11, the Act takes effect July
1, 2008.
1:53:34 PM
Ms. Jackson summarized that the bill would put together a
health commission and an outline for an information office
to move Alaskans toward a better health care system.
However, as originally crafted, the Governor's Health Care
Transparency Act repeals the CON program moving Alaska to
full competition in the health care market and away from
thirty years of a government controlled and, most recently,
court-determined health care delivery system that is one of
the most expensive and least accessible in the country.
1:54:57 PM
Co-Chair Meyer questioned why the Commission would sunset.
Ms. Jackson agreed this was a good question and admitted to
being happier if it was not there.
1:55:48PM
Representative Gara asked what prevents this Commission from
studying things but not implementing anything. He noted that
the Governor appointed a Commission last year that
recommended changes to the Denali KidCare program to two
hundred percent eligibility but a bill never came from the
Governor's Office.
Ms. Jackson responded that the first task force was time
limited. The task force looked at the long and short term
strategies that could be developed but did not have time to
put fiscal notes to the policies. One of the recommendations
included an ongoing Commission to provide an annual report
with policy recommendations to the Legislature and the
Governor. The difference with this Commission would be the
deliverance of a report every year.
1:57:32 PM
Representative Gara noted that the Commission proposal on
Denali KidCare at two hundred percent was known but never
acted upon.
Ms. Jackson responded that there were many issues to deal
with in regard to health reform. The health care commission
insures that all the different strategies and goals have
timelines and a possibility of being implemented over time.
Representative Gara disagreed and thought Denali KidCare,
with a known fiscal note, should not wait from another
report from another Commission. He referred to the
Commission composition as being heavy in group
representation but little representation from the consumers
affected.
Ms. Jackson responded that the original legislation did not
have the specific seats but was the evolution of seven
meetings. She believed this to be a balance of all
suggestions. She shared his concerns to make sure consumers
were involved but suggested that any work by the Commission
would include public testimony.
2:01:14 PM
Representative Gara requested to see the alternative
proposals for the board. He believed the suggested board
would not be reflective of the vast majority of people
without health insurance.
2:01:50 PM
Ms. Jackson pointed out that the Alaska Primary Care
Association does work toward trying to make sure that the
uninsured have insurance.
2:02:18 PM
ROD BETIT, PRESIDENT, ALASKA HOSPITAL AND NURSING HOME
ASSOCIATION supported the legislation with some
reservations. The Association supported Sections 1 and 2
which they believed would improve the functioning of the
department. The Association opposed Section 3 and believed
the current language is recommended over the new proposed
language.
2:05:46 PM
Mr. Betit signified concern in Section 4 in that it
redefined the definition of a health care facility. The bill
states this is a way to increase competition and decrease
costs but the Association believed this would have the exact
opposite effect. He stated the repeal of the CON would be
detrimental to Alaska consumers. A 2001 study by Chrysler,
Ford and General Motors examined health care costs over
several years in eight states and found that costs were
eleven to thirty-nine percent lower in states with CON
requirements than in those without it. The amount of bad
debt increased fifty five percent in Alaska hospitals
between 2006 and 2007. Mr. Betit stressed that the repeal of
CON would reduce hospitals revenue from more profitable
service areas used to offset part of growing bad debt
problem.
2:07:59 PM
Mr. Betit referred to Section 5 and the proposed new
definitions. Definition #13 deals with Independent
Diagnostic Testing Facility versus a physician practice with
imagining equipment. He believed Definition #13 should be
replaced with language from HB 345 that clarifies when
imaging equipment purchased for a physician's office is
exempt from CON review. He speculated that this added
language would eliminate eighty percent of the lawsuits and
appeals currently before the state on imaging CON decisions.
He believed Definition #17 should be entirely deleted as
there is no useful purpose for attempting to define what is
or is not a physician office. Physician offices have always
been exempt from CON in Alaska and this proposed definition
would simply create interpretive complexity to an area that
is already very clear. Mr. Betit observed Section 6 deals
with the Health Care Information Office and mandatory
reporting. The Association strongly supports efforts to
provide consumers with better information to guide their
health care purchases with a few additional language
clarification amendments.
2:11:29 PM
Mr. Betit referred to Section 7 that establishes the Health
Care Commission and remarked the Association strongly
supports this commission but strongly recommends amending it
to give the Commission authority to define the reporting
requirements for each health care category. The Commission
is the more appropriate body for determining what is most
useful to consumers in weighing health care decisions that
must be made.
2:12:49 PM
Mr. Betit discussed the importance of the sunset for the
Commission. He remarked the Commission needs to be monitored
to see if it is fulfilling its purpose. If the Commission is
not fulfilling its purpose, it would go away. The
Association does not support Sections 8 and 9. He noted
Section 10 strongly supports competition of an Alaska
specific CON study to address the question of what impact a
CON repeal would have in Alaska. The Association does not
support any repeal of CON and therefore believed this
diction should be deleted. In Section 11, which deals with a
mandatory reporting date, the Association believes it is
unrealistic to expect for receiving and posting reported
information prior to July 1, 2009.
2:14:21 PM
Representative Gara inquired if the Committee decided to
pass part of this bill and passed the consumer information
sections 6 and 7 would the Association support this. Mr.
Betit said yes.
2:14:49 PM
PAUL MORRIS, CFO, ALASKA REGIONAL HOSPITAL supported this
legislation as a great first step in Alaska Health care. An
independent study is needed to evaluate where the state is
going, the language used, and how it will affect the
consumer. He listed several pro and CON studies and
overwhelmingly each group decided to retain the CON. He also
referenced the definition of physician practice.
2:18:20 PM
Representative Gara inquired if Mr. Morris would support the
bill if two sections, the Health Information Section and the
Planning Commission were passed and then a study was
initiated on the CON. Mr. Morris agreed. He agreed that all
three components are good but more detailed data collection
on the CON was needed.
Representative Gara requested where the CON study was in the
bill. Representative Hawker replied it was in Section 10.
2:20:00 PM
Mr. Morris referred to the extensive study in the state of
Maine that indicated the CON should be retained.
Representative Gara agreed but was troubled by each group
wanting their view to be represented but he believed the
greater importance was what is best for the state. A study
could provide an independent judgment on the best decision.
2:21:06 PM
Mr. Morris agreed with Representative Gara that a study was
needed and if one was not done, then the problem would keep
reoccurring and the debate would continue.
2:21:42 PM
PAUL FUHS, ALASKA OPEN IMAGING CENTER, remarked that all
agree on defining an individual independent diagnostic
testing facility and physician's office. The result of not
having a good definition is having nine lawsuits filed. In
order to come under the $1 million threshold, people are
turning to old technology and equipment. He believed the
Medicare services guidelines should be followed that do not
require any percentage of ownership. He noted the fifty
percent number was added because people did not want a store
front taking imagining with no doctor on premises.
2:24:51 PM
Mr. Fuhs continued that data collection is important for
people to be able to make informed choices, otherwise
medical expenses are being driven up.
2:25:29 PM
JOEL GILBERTSON, REGIONAL DIRECTOR, STRATEGIC DEVELOPMENT
AND ADMINISTRATION, PROVIDENCE HOSPITAL (testified via
teleconference), shared that healthcare is becoming more
unaffordable throughout the nation and the state. He
believed a clear first step would be the creation of a
Commission. He agreed that more information is needed to
represent the consumers for recommendations in health care
reform. The information needs to be relevant and accurate to
make better decisions. Health care costs are driven by what
is ordered and charged by physicians and facilities.
2:29:24 PM
Mr. Gilbertson signified that Providence does not support
the proposed language to repeal the Certificate of Need in
communities over 60,000. He believed this eliminates public
participation and input in health care planning and
infrastructure in the communities. There is research for and
against the CON. The Task Force agreed that the CON is a
relevant public policy tool that needs to be preserved. He
supported a study to be completed on the CON.
Representative Gara asked if that if there was an agreement
on how to rewrite the CON law would he support a bill that
passed out with the Health Care Office, the Commission, and
the CON study. Mr. Gilbertson agreed that with some minor
amendments they would support the legislation.
Representative Gara remarked that the Commission would
address the availability of medical care. He contended that
one of the big indicators for keeping a doctor in state is
whether they can attend a residency program in this state.
He noted that Mr. Gilbertson has a family practice residency
that may be expanding. Representative Gara inquired how many
people annually come out of this practice and if it was the
only one in the state.
2:32:54 PM
Mr. Gilbertson answered that there was only one residency
program in Alaska. It is a three-year program with eight
residents and is subsidized by Providence. Providence has
prioritized growing the program; the current first-year
class has 12 residents. National studies show that one of
the leading determinants of where a physician will practice
is where they did their residency. However, the residency
program loses money. It is a working clinic for uninsured
and Medicaid/Medicare patients, and is subsidized by the
hospital at $2 million per year.
Representative Gara offered to work with Mr. Gilbertson on
the subject.
Vice-Chair Stoltze stated concerns.
2:35:44 PM
ROBERT CIMASI, PRESIDENT, HEALTH CAPITAL CONSULTANTS,
MISSOURI (testified via teleconference), spoke in support of
HB 337. He summarized his written report to the Committee
("Alaska Health, Education and Social Services Committee,
Testimony on Certificate of Need," Copy on File).
Mr. Cimasi referred to the many studies done on CON programs
and cautioned the Committee to read them carefully as they
each address different issues.
Mr. Cimasi thought that health care should be about
providing care to patients and their families. He addressed
cross subsidization as a "hidden tax." Hospitals provide a
broad range of services. Those with CON raise prices. Costs
go up on the promise that there will be cross subsidization
of other services. He referred the Committee to a Health
Affairs article by Clark Havighurst, who states that health
insurance greatly increases the profitability of monopoly.
If costs are allowed to be raised and there is no commitment
against cross subsidization, the result is higher costs with
no benefit to anyone.
Mr. Cimasi referred to an extensive study by the Federal
Trade Commission, "Hospital Competition and Charity Care,"
which states there is a lack of statistical evidence for the
cross subsidization hypothesis. Other studies support that.
He asked the Committee to focus on the consumer and the
patient. CON regulation is favorable to hospitals, not
consumers.
2:47:12 PM
NANCY CROSS, PHYSICIAN, FAIRBANKS (testified via
teleconference), spoke in support of HB 337. She has not
been able to secure privileges at the local hospital. She
cannot do hospital based procedures, but must take patients
to Anchorage, which limits patients who cannot afford to
travel. She described the long process of applying,
inquiring and being given privileges and having them taken
away.
2:51:46 PM
DR. LARRY STINSON, ANCHORAGE (testified via teleconference),
spoke in favor of the bill. He thought it had been
demonstrated to be effective other places. In current
literature CON hasn't been shown to be of benefit, but
drives up costs. The state program has been in place since
1986. Each year the study is delayed it hurts the patient.
He is wary of a study if it does not represent the consumer.
Hospitals in other states without CON still make profits.
2:55:33 PM
GRANT RODERER, PHYSICIAN, ANCHORAGE (testified via
teleconference), asked the Committee to repeal the CON. He
would like the population limit lowered.
JOANNE SMITH, WASILLA (testified via teleconference), spoke
in favor of the bill. The current CON regulations are
outdated and should be repealed. The population base should
be eliminated. Alaska has the highest price and lowest
quality in health care, and a shortage of physicians. CON
was repealed on the federal level over twenty years ago
because it did not work. Competition is a good thing in
health care. She thought more physicians would come to
Alaska after CON was repealed.
3:01:57 PM
RICHARD COBDEN, PHYSICIAN, FAIRBANKS (testified via
teleconference), spoke in support the legislation with some
reservations, including eliminating MatSu, Anchorage and
Fairbanks from the process. He agrees that CON increases
costs without increasing care. There has been no consumer
input on the Commission. He thought legislators have the
responsibility to tax but are abrogating that to hospitals.
He wanted to address the problems of health care directly.
3:06:30 PM
KEVIN DOREY, FAIRBANKS (testified via teleconference), spoke
in support of the bill as a consumer and economist. The CON
law as applied in Alaska is a violation of federal anti-
trust law. He thought there would be more opportunity to
move forward if the State did not wait until the federal
government removed CON. He did not think Fairbanks was a
rural community and did not need the protections of the CON
system. When individuals have applied for CON, they have
been saddled with endless lawsuits.
MIKE POWERS, CEO, FAIRBANKS MEMORIAL HOSPITAL (testified via
teleconference), opposed all sections in the legislation
that support CON. He listed his thoughts on each of the
sections. He spoke to the other testifiers who had issues
with the Fairbanks hospital.
3:15:12 PM
JILL THORVALD, EXECUTIVE DIRECTOR, MEDICAL FACILITY,
FAIRBANKS (testified via teleconference), gave her
perspective as an operator in a private facility. She
supports the Governor's bill on CON. Physicians will view
Alaska as more attractive without CON. More specialties will
keep money in Fairbanks instead of patients traveling
outside Alaska and to Anchorage. She thought Medicare is an
entirely different issue that needs to be dealt with
separately. She did not see the bill as an anti-hospital
bill.
3:19:36 PM
STEPHEN SUTLEY, FAIRBANKS (testified via teleconference),
spoke in support the legislation, although he considers it a
poor compromise as populations are not well defined. The
health care issue is major in the national elections, and
thought it should be an issue in the state elections. Well
documented studies from many organizations show that the CON
does not work as it stifles free market enterprise, consumer
choice, and physician recruitment. Fairbanks is among the
fastest growing cities in the nation, yet it lacks
physicians.
3:25:06 PM
SCOTT BELL, FAIRBANKS MEMORIAL HOSPITAL FOUNDATION BOARD
(testified via teleconference), supported many parts of the
bill, but was very opposed to Sec. 4 which would have a
strong negative impact on the quality of health care
available. He spoke to an award the hospital had gotten
recognizing its commitment to community health. He felt CON
is important in providing high quality health care. He
highlighted a wide range of services at the Fairbanks
hospital.
3:28:22 PM
MAREE BARNEY-SUTLEY, FAIRBANKS (testified via
teleconference), spoke as a consumer and senior in support
of eliminating CON. She urged the Committee to move the bill
through.
RYAN SMITH, CEO, HOSPITAL, SOLDOTNA (testified via
teleconference), supported the study but not the elimination
of CON. The hospital does not have a parent company outside
of Alaska. He thought the regulation committee had been
poorly represented. The group voted against CON being
removed.
3:31:10 PM
ROMAN STEVENS, CEO, MAT-SU MEDICAL CENTER, FAIRBANKS
(testified via teleconference), said the committee was
balanced and thought it was misrepresented. He wanted to
maintain the CON and protect community hospitals. He was
supportive of the study.
MIKE MCNAMARA, SURGEON, ANCHORAGE (testified via
teleconference), spoke in opposition of the bill. He agreed
with the need for further information on CON, and with the
plan to create a Commission. Regarding CON, none of
Anchorage centers are full capacity. The have become very
specialized and rarely have to send people outside of
Alaska. He thought more centers would dilute that care and
worried about losing peer oversight of big centers. There is
a shortage of nursing in all centers. If CON is repealed,
then centers will be competing for specialty nursing staff
and physicians. The larger centers have the power to
negotiate contracts with insurance companies and unions,
which brings costs down.
3:36:56 PM
MARK WADE, SURGEON, FAIRBANKS (testified via
teleconference), spoke in support of the legislation. He
told his experience with CON. He had been given one to open
a center, but could not build the center as he has lawsuits
against him. He believes that freedom of choice is best for
the people of Alaska. He resigned from the committee, where
citizens were not represented. He wanted a free market.
3:42:14 PM
MURRAY RICHMOND, CHAPLAIN, FAIRBANKS MEMORIAL HOSPITAL
(testified via teleconference), spoke in opposition to the
legislation. He spoke to the variety of excellent services
in Fairbanks and thought the system was working for the
consumer. He did not want health care to be subject to the
forces of the market.
CARONE STURM, FAIRBANKS (testified via teleconference),
spoke as a consumer in Fairbanks in support of HB 337. She
wants the CON repealed. She has a child with a serious
health concern and said the costs are very high.
3:46:31 PM
MIKE MADDOX, FAIRBANKS (testified via teleconference), spoke
in support of the bill. Fairbanks is the only community in
the country of its size with one hospital. He spoke to
decreased service to the community. Fairbanks has only one
image center. Costs in some cases are doubled (testimony
garbled due to technical difficulties).
3:50:44 PM
JENNINE HINMAN, HEALTH CARE CONSULTANT, ADVANCED MEDICAL
CENTERS OF ALASKA, WASILLA (testified via teleconference),
spoke in favor of the bill. Instead of getting another task
force, she suggested repealing the CON and providing for a
review of that in five years. She spoke to the future need
for care for disabled veterans from Iraq.
PUBLIC TESTIMONY CLOSED.
HB 337 was HEARD and HELD in Committee for further
consideration.
RECESS 3:56:17 PM
RECONVENE 7:23:52 PM
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