Legislature(1999 - 2000)
04/18/2000 03:16 PM House HES
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HCR 24 - ALASKA HEALTH CARE COMMISSION Number 0083 CHAIRMAN DYSON announced the first order of business as House Concurrent Resolution No. 24, Creating the Alaska Health Care Commission. Number 0155 WES KELLER, Staff to Representative Fred Dyson, Alaska State Legislature, came forward to present HCR 24. He reminded the committee that Jerry Near and Gary Schwartz had made a presentation to this committee and asked for a resolution to form a health care commission that looks at the overall health care provisions in the state of Alaska. He said the heart of the bill is on page 3, lines 3-12 which lists what the health care commission is supposed to accomplish. The commission is supposed to evaluate options concerning those six items and bring them back to the legislature and governor and make recommendations in a preliminary report next January 2001. At that time, it would be reevaluated and go for the final plan that would be due March 30, 2002. Number 0283 JERRY NEAR testified via teleconference from Soldotna. He noted that he was with the original task force that worked on this issue in 1992 - 1993, and that task force made recommendations to the legislature then. Since that time, access to health care and the cost of health insurance have continued to escalate. A private group formed about a year and a half ago to try to move this thing along in another fashion. A preliminary document was submitted last March. The group got concurrence to continue, and it did, but the group realized it wasn't the only thing that could develop a plan. Looking at the limitations of a private body, the group decided to ask the legislature to consider setting up a commission that would have authority to take on this challenge in earnest to see if this system can work for everybody better than it is now. The ranks of the uninsured have increased markedly in Alaska and nationally. MR. NEAR has information on a program set up by the federal government to help fund states to develop programs whereby this whole issue of health care and access can be addressed. MR. NEAR noted the 40 percent figure in the bill is a composite figure that also includes insurance premiums and the retainer that companies need to have to operate on and the exodus of health care that goes out of Alaska. The group should see what it could do to retain more of the health care resources within the state and also the jobs that are associated with that industry. It is one of the major (indisc.) industries in the state. Anything that can be retained should be to make this more efficient. CHAIRMAN DYSON asked Mr. Near if he had any problems, on page 2, with the composition of the commission. MR. NEAR said no, he believes there needs to be expertise in the broad spectrum of the whole industry. One of the questions is how to develop the industry without falling into the pockets of the vested interest. It is structured to bring in a broad band of players. He submitted a list of people who he would consider qualified to serve on the commission. Number 0564 CHAIRMAN DYSON said he is concerned about tactics at this point in time. There may be an amendment to allow the members to be eligible for travel and per diem, and he is worried about a fiscal note killing the bill this late in the session and getting a Finance Committee referral. He asked Mr. Near for any thoughts on that. MR. NEAR said it can be quite a costly endeavor for the private citizen. He hopes the federal program can help, but that needs to be applied for. CHAIRMAN DYSON asked Mr. Near if he had any problems with the list of six items on page 3 or if he saw anything that should be changed or added. MR. NEAR suggested changing "report" to "plan" on page 3, line 2. On page 3, line 7 (3) he believes that "plans" would be more definitive than "options." He wasn't sure about number (5) on page 3, line 10. The medical savings accounts have been expanded and there are some things at the federal level in this whole arena of health care and insurance. It is a great idea, but it gives the providers a bit of heartburn because it takes the amount of money that's out there following all the goods and services and health care and puts it into a private account so it does withdraw a lot of capital out of the system. That will be met with mixed review. CHAIRMAN DYSON said that one probably cuts both ways. MR. NEAR said he personally feels the medical savings account is a good idea because it brings the consumer into the equation. Those monies will be used to pay for what he believes is the most efficient way of paying medical bills: pay a dollar for a dollar instead of using the vehicle of insurance which does not pay a dollar for a dollar because of the operating costs. MR. NEAR has proposed to a number of employers that they set an employee expense medical reimbursement account. Number 0840 CHAIRMAN DYSON asked Mr. Near if inserting "plans and" after "includes" on page 3, line 2 would be fine. MR. NEAR noted that "plans" is more definitive and will challenge the committee to look seriously at what kinds of structures would be developed and would have a chance of making it work better. MR. NEAR referred to page 3, line 18, and asked if the authorizing of temporary support staff would be more appropriate towards the front of the bill. CHAIRMAN DYSON said the committee would look at that. MR. NEAR said somebody from the administration needs to be down there for a pre-application conference on April 26 if the federal grant is going to be applied for. Number 0996 GARY SCHWARTZ testified via teleconference from Fairbanks. He said he is pleased with what has been done so far. He has no issues with the language. He agreed with what Mr. Near pointed out: the staff support is needed early on with the creation of the commission rather than waiting a year. He is concerned it will lose its momentum if it's done in that manner. The federal grant would very well address it. That grant is almost written for the creation of this commission for the state to undertake the study of access, multiple programs and uniform payment related to insurance costs. In terms of the composition of the commission, he is concerned about the general health care provider industry as well as the health insurance industry. He would like to see practicing physicians and some insurance executives, as opposed to a broker, involved in it. He supports HCR 24. Number 1117 KAREN PERDUE, Commissioner, Department of Health & Social Services, came forward to testify. She shared several pages from the Health Resources and Access Task Force report with the committee. That task force finished its work in 1993, and it was a very rigorous, exhaustive process. The task force spent two years with a full-time staff person and a hefty budget, and the legislators who were on the task force spent one to two days a month in meetings on this subject. The task force came up with some recommendations and two are attached that are similar to option (1) on page 3, line 3-4: ... a single administrative entity to oversee the state's health care cost containment and access initiatives. This was probably the pure solution that would have done most to deal with cost of the uninsured. It was probably the most controversial recommendation the task force could have made. She noted this was being made at the time when health care reform had a lot of national momentum, which was prior to the collapse of the reform movement after the Clinton plan. COMMISSIONER PERDUE said while option (1), page 3, line 3, may be the most efficient way to wring money out of the system, it is also a very difficult task to create a publicly held trust with administrative powers to oversee Alaska's health care delivery system. She pointed out that staff would definitely be needed to explore this option. She called this area "heavy seas." She doesn't believe there is currently anything barring employers from having a privately held trust today with their own money. There has been some movement toward that, but the key is whoever is running this system has power over other people's money. It is not a light task. COMMISSIONER PERDUE noted that option (3), page 3, line 7, is going in the opposite direction from where the health care industry is moving, and this would be a tricky issue to look at. She pointed those things out to remind the committee that this is a substantial undertaking. She referred to page 3, line 5, option (2) having to do with telemedicine and said that is somewhat of a duplicate task to another group. Senator Ted Stevens asked her to convene a group of public and private individuals to look at telemedicine development in Alaska. She chairs the Alaska Telehealth Advisory Commission and the members are Doug Bruce from Providence Hospital, the Regulatory Commission of Alaska, Ron Duncan of GCI, Mark Hamilton of the University of Alaska, Jerome List of the State Medical Society, a representative from the federal Indian Health Services, the Chief Executive Officer of Alaska Regional Hospital, Tom Posey of AT&T Alascom, Paul Sherry of the Tribal Health Consortium, the head of the Veterans Administration in Alaska and Representative Gary Davis. This commission is working very hard on this particular task. CHAIRMAN DYSON asked Mr. Near if he was comfortable that the Alaska Telehealth Advisory Commission is doing a reasonable job in telemedicine and what he has going doesn't get swamped or duplicated. MR. NEAR said right now his is shelved because of the resources. It would not make a lot of sense to have two separate systems taking care of two different groups, public and private. He is hoping to have one unified system. Number 1397 COMMISSIONER PERDUE indicated that the Alaska Telehealth Advisory Commission created a set of technical standards that allow for inter-operability between public and private investment. These are voluntary standards but having representatives from the telecommunication companies and the Regulatory Commission of Alaska at the table has helped a great deal in allowing everyone to adopt these standards. The commission is building a railroad track. If it agrees on the width of the railroad track, then everybody can hook on to it. She urged that the committee drop option (2) on page 3, line 5 in HCR 24. Number 1425 CHAIRMAN DYSON asked Mr. Near how he felt about that. MR. NEAR said he had no problem with that. COMMISSIONER PERDUE said there is one glaring missing group that she found very useful, and that is the business community. She doesn't believe this can be planned without inviting employers to come in and talk about how their money is going to be used. Employers pay most of the premiums in the private system, and she definitely recommended that employers be involved. The task force invited both labor and private business to the table. COMMISSIONER PERDUE told the committee that she has read the federal register announcement for the grant. There are ten states that would receive these grants. The grants are sizeable, but she warned the committee that ways are being looked at to expand insurance to low income individuals through Medicaid or SCHIP [State Children's Health Insurance Plan] or other government programs. There was a conference that came up with eight major categories of solutions for dealing with the uninsured population, and seven of those related to expanding government coverage. She would expect that a successful application to this grant would have to include how the state would address that issue. She assumed that may be addressed in option (6), page 3, line 11. CHAIRMAN DYSON asked Commissioner Perdue what she thought the chances would be for Alaska to get a grant. COMMISSIONER PERDUE said she believed Alaska would have at least a fighting chance if Senator Stevens endorsed it, and people from Alaska have been working with Dr. Fox at HRSA [federal Health Resources and Services Association]. There are ten states that will receive these funds. Alaska would have to put together a heck of an application, and it would have to fit with what the federal government wants to fund. Number 1570 CHAIRMAN DYSON asked if something like the health commission needs to be in place in order to be able to apply for the grant. COMMISSIONER PERDUE answered no. CHAIRMAN DYSON asked if she is planning on applying for this grant. COMMISSIONER PERDUE answered that a decision hasn't been made. A sizeable amount of money was received from the Robert Wood Johnson Foundation for the last four years. That was used to pull some information together on market base solutions. There has to be the political will to take the next step. In the uninsured situation, there are simplistically three or four ways to go: expand government coverage, require employers to pay through some kind of pool or subsidy, bring in even more health care dollars into a big pool which would be Alaska's problem. A good deal of Alaska's coverage is being financed by federal sources: Veterans Administration (VA), military, Coast Guard, Medicare and Indian Health Service. She reported that those groups have never ever successfully been brought to the table and said what they are willing, in terms of health care dollars, to put into Alaska. Those groups make their referral patterns to their tertiary care centers like the Pacific Command in Hawaii, or the VA has a whole other set of referral patterns so it is a gargantuan task to bring those federal agencies to the table. CHAIRMAN DYSON asked the commissioner how that would be done. Number 1556 COMMISSIONER PERDUE said it would take a tremendous amount of joint effort by the leadership of the legislature, the governor and the delegation. Every system is trying to create economies and efficiencies. To every system, efficiency is the referral to its existing fixed-cost hospitals out of state. There are competing demands there. CHAIRMAN DYSON commented that the committee is eager to be helpful to facilitate that process. COMMISSIONER PERDUE said she hasn't seen a lot of activity in the state or national legislature around health care reform in the last several years. It has been incremental reform as opposed to big picture reform where everything is restructured. The people who are frustrated that the uninsured population continues to grow, want to look at the bigger picture. Once the product is done, something has to be done with it. This effort would really bring out some fundamental questions, and then the legislature would have to decide whether it wanted to deal with those questions. CHAIRMAN DYSON asked Commissioner Perdue if an employer in Alaska was put on the commission, which position would she recommend eliminating. COMMISSIONER PERDUE answered she didn't know at this point. She noted that in talking about the health care industry, that is not just one kind of provider. She indicated that the doctors and hospitals were fundamental in rounding out the full provider perspective. It is always a problem trying to squeeze everybody in. CHAIRMAN DYSON asked where this bill goes next. MR. KELLER explained if the bill gets a fiscal note, it will go to the Finance Committee first. There is only a fiscal note if the original version is passed. The CS doesn't have a fiscal note because it doesn't pay per diem or travel. Number 1832 COMMISSIONER PERDUE summarized that this is a big job. She can't disagree with Mr. Near on the issue that there hasn't been the needed work into this, but she would not set this commission up without adequate staff resources and the adequate amount of support so people can participate from across the state. REPRESENTATIVE COGHILL asked if anything developed along these lines in Alaska would be driven by what happens nationally. COMMISSIONER PERDUE said some of the national issues don't speak directly to the issue of the market in Alaska. Alaska is about five steps behind or ahead of dealing with the issue of managed care. Alaska has 600,000 people, and that is the size a hospital in Seattle serves. Alaska has an inefficient health care system, but that's the way it is. People live in small communities in Alaska so it is difficult to organize this market in a way to get a lot of purchase power. There probably are some national solutions that could be looked at. One issue is what is the tax treatment of self-employed individuals and their premiums. There have been a number of movements in Congress to allow self-employed people to write off their premiums. Other questions include: Should we create different pools? We have a high risk pool, is it working? We have small market reform, is it working? Medicare in Alaska does not pay its full way in Alaska and thus there is a great amount of work to be done in that area. Those are all individual payment sources as opposed to the big picture and how one would redistribute the money? The committee took an at-ease from 3:53 p.m. to 4:18 p.m. REPRESENTATIVE KEMPLEN commented that one approach could be to cut down the scope of this health care commission. He referred to page 3 and suggested keeping the second "further resolved" and the last two so this health care commission just presents, on January 1, 2001, a preliminary report to the legislature that outlines options being evaluated; describes an action plan, including a public participation process and proposes legislation to extend the final report date and starts it up June 15, 2000. Then the health care commission's task is a lot narrower than originally proposed. Number 2058 REPRESENTATIVE KEMPLEN made a motion to adopt the proposed committee substitute (CS) for HCR 24, version LS1616\D, Lauterbach, 4/15/00, as a work draft. There being no objection, Version D was before the committee. Number 2070 REPRESENTATIVE KEMPLEN made a motion to adopt Amendment 1 which would delete on page 3, lines 5-6. There being no objection, Amendment 1 was adopted. Number 2086 REPRESENTATIVE BRICE made a motion to adopt Amendment 2 which would delete on page 3, lines 7-8. REPRESENTATIVE COGHILL objected. A roll call vote was taken. Representatives Brice, Kemplen and Morgan voted for the adoption of Amendment 2. Representatives Coghill and Dyson voted against the adoption of Amendment 2. Representatives Whitaker and Green were absent. Therefore, Amendment 2 was adopted by a vote of 3-2. Number 2163 REPRESENTATIVE BRICE made a motion to adopt Amendment 3 which read: Page 2, line 20 Delete: "and without" Insert: "but will be eligible for" CHAIRMAN DYSON asked whether there was any objection. There being none, Amendment 3 was adopted. Number 2219 REPRESENTATIVE COGHILL made a motion to adopt Amendment 4 which read: Page 1, line 4 Delete: "cannot afford either" Insert: "have difficulty affording" REPRESENTATIVE BRICE objected and offered a friendly conceptual amendment that would maintain "cannot afford" and insert "or have difficulty affording". REPRESENTATIVE COGHILL agreed to that change. CHAIRMAN DYSON asked whether there was any further objection. There being none, Amendment 4 was adopted. Number 2300 CHAIRMAN DYSON made a motion to adopt Amendment 5 which would insert "insurance premiums, and" on page 1, line 8, after the phrase "40 percent of the". There were no objections, therefore, Amendment 5 was adopted. TAPE 00-48, SIDE B Number 2323 REPRESENTATIVE BRICE made a motion to adopt a conceptual amendment. He suggested: Page 3 Delete lines 20-22 Page 3, line 28 Delete: "March 30, 2002" Insert: "January 8, 2001" The committee took a brief at-ease at 4:30 p.m. - 4:31 p.m. REPRESENTATIVE BRICE continued with Amendment 6: Page 3, line 14 Delete the word "preliminary" Delete: Page 3, Lines 18-19 Insert: "(3) the commission may as part of its recommendations request an extension to January 2002." CHAIRMAN DYSON asked whether there was any objection. There being none, Amendment 6 was adopted. CHAIRMAN DYSON made a motion to adopt Amendment 7 which read: Page 3, line 2 Insert "plans and" after "report that includes" CHAIRMAN DYSON asked whether there was any objection. There being none, Amendment 7 was adopted. REPRESENTATIVE KEMPLEN made a motion to adopt Amendment 8 which read: Page 2, line 9 Delete: "the insurance industry" Insert: "Alaska employers' CHAIRMAN DYSON asked whether there was any objection. There being none, Amendment 8 was adopted. Number 2110 REPRESENTATIVE BRICE made a motion to move CSHCR 24, version LS1616\D, Lauterbach, 4/15/00, as amended, out of committee with individual recommendations and fiscal note. There being no objection, CSHCR 24(HES) moved from the House Health, Education and Social Services Standing Committee.
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