Legislature(1993 - 1994)

04/13/1993 03:00 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HCR 17:  KENAI PENINSULA INSURANCE POOL                                      
                                                                               
  Number 025                                                                   
                                                                               
  REP. GARY DAVIS testified as PRIME SPONSOR OF HCR 17.  He                    
  read a sponsor statement which said that the Kenai Peninsula                 
  Borough Economic Development District had established a                      
  Kenai Peninsula Borough Health Care Advisory Council to                      
  develop recommendations for a health care plan for the                       
  borough, and they would like to have the plan implemented as                 
  a model for other programs in Alaska.  The resolution asks                   
  the governor to direct the commissioner of the Department of                 
  Health and Social Services to help the borough achieve its                   
  plan for a model region-wide health access and basic care                    
  program.                                                                     
                                                                               
  (Rep. Bunde arrived at 3:15 p.m.)                                            
                                                                               
  REP. DAVIS described the Kenai Peninsula Borough Task Force                  
  (KPBTF) as established in 1991, with the same aims as the                    
  federal and some state governments.  The resolution                          
  acknowledges the impracticality of relying on federal                        
  programs for cost-effective programs and the probability                     
  that any state health care program was up to five years                      
  away.  He said the KPBTF was close to implementing a program                 
  and would have a referendum for implementation on the ballot                 
  in October, 1993.  The resolution seeks state government's                   
  help by recognizing the KPBTF proposal and the work it has                   
  already done as a model program, receiving assistance in the                 
  form of money, technical assistance, or capital grants.  He                  
  said the borough needs about $290,000 to get the program off                 
  the ground.  He noted the resolution carries a zero fiscal                   
  note for general funds, and he felt it was up to him to help                 
  the borough find state money for its project.  He said                       
  health care reform was important, and the resolution would                   
  give the state government a chance to allow one group to act                 
  as a model for other plans.                                                  
                                                                               
  Number 144                                                                   
                                                                               
  CHAIR TOOHEY asked the number of people not then covered by                  
  health insurance.                                                            
                                                                               
  REP. G. DAVIS answered that about 8,000 of the borough's                     
  40,000 residents were not so covered.  He said the KPBTF had                 
  included all parties to the health care issue, whereas the                   
  CHIPRA (Comprehensive Health Insurance Payment Reform Act)                   
  proposal came just from administrators and doctors, but not                  
  insurance companies, other industries and citizens.  He said                 
  the state task force (Health Resources and Access Task Force                 
  - HRATF) did not include providers in its review and                         
  research.  He said KPBTF had developed a plan for a modified                 
  Health Maintenance Organization (HMO), under Alaska statute.                 
                                                                               
  Number 175                                                                   
                                                                               
  CHAIR TOOHEY stated, "Delivered by whom?"                                    
                                                                               
  REP. G. DAVIS answered, saying by those people who signed up                 
  as part of the volunteer organization.                                       
                                                                               
  CHAIR TOOHEY said that, assuming 8,000 borough residents                     
  were not insured, whether the remaining 32,000 residents                     
  were covered by other government plans would have to drop                    
  their health insurance coverage.                                             
                                                                               
  Number 188                                                                   
                                                                               
  REP. G. DAVIS answered that the 32,000 -- including state,                   
  borough and school district workers, plus North Kenai                        
  refinery workers -- would be the core group needed to                        
  provide the critical mass to get the program started.  He                    
  said their inclusion would help ensure that the costs of the                 
  borough health care plan would be competitive with the plans                 
  offered by employers.                                                        
                                                                               
  Number 203                                                                   
                                                                               
  CHAIR TOOHEY asked whether Aetna, Blue Cross/Blue Shield and                 
  other insurance companies were involved in the program.                      
                                                                               
  REP. G. DAVIS answered that he did not know, as he was not                   
  on the task force.                                                           
                                                                               
  CHAIR TOOHEY asked if the borough hospitals and doctors and                  
  the residents were involved.                                                 
                                                                               
  REP. G. DAVIS answered yes.                                                  
                                                                               
  CHAIR TOOHEY said the key element was the insurance                          
  companies.                                                                   
                                                                               
  Number 214                                                                   
                                                                               
  REP. G. DAVIS said no, the only need for the insurance                       
  companies was for reinsurance.  He said the HMO would in                     
  effect perform as its own insurance company, taking in                       
  premium payments.                                                            
                                                                               
  CHAIR TOOHEY asked whether the $290,000 was seed money.                      
                                                                               
  REP. G. DAVIS answered yes.  He said the Department of                       
  Health and Social Services had received a grant from the                     
  borough and had received some money from foundations to                      
  assemble the task force and fund its work.  He said                          
  representatives from Tennessee and Hawaii, and a consultant                  
  from Seattle, had traveled to the Kenai Peninsula Borough to                 
  discuss health care plans in their states and help develop                   
  the Kenai plan.                                                              
                                                                               
  REP. VEZEY said he saw no problem with encouraging a new                     
  procedure, but he said that as some health care statistics                   
  are not accurate, he moved an amendment to change language                   
  on page 1, line 4, of the resolution to delete the words "an                 
  estimated 90,000 residents" and replace it with "a large                     
  number of residents."                                                        
                                                                               
  REP. G. DAVIS asked if someone in the audience could verify                  
  the approximate accuracy of the term "estimated 90,000                       
  residents" numbers.  He said he did not object to the                        
  amendment, but said that he believed that with the work the                  
  KPBTF had put in, the 90,000 estimated number was probably                   
  well-founded.                                                                
                                                                               
  Number 270                                                                   
                                                                               
  REP. VEZEY said he had heard the number "75,000" and said it                 
  would be better not to use a specific number.                                
                                                                               
  REP. G. DAVIS repeated that the KPBTF had worked hard, and                   
  the number came from detailed research, and he preferred to                  
  leave the number as it was.                                                  
                                                                               
  REP. BUNDE said he was involved with the task force and it                   
  did impressive work, but he would feel more comfortable with                 
  the term "significant number."  General discussion followed                  
  on the advisability of using the word significant instead of                 
  estimated 90,000 with members repeating their previous                       
  positions on the issue.                                                      
                                                                               
  (Rep. Nicholia arrived at 3:30 p.m.)                                         
                                                                               
  Number 300                                                                   
                                                                               
  REP. G. DAVIS agreed to an amendment changing the wording to                 
  "as significant number."                                                     
                                                                               
  Number 322                                                                   
                                                                               
  REP. KOTT asked why the federal government was mentioned on                  
  page 1, lines 15 and 16, of the resolution.                                  
                                                                               
  REP. G. DAVIS said the whereas clause just pointed out the                   
  national significance of what was happening in health care,                  
  rather than supporting one effort over another.  He said it                  
  was not endorsing any federal government activity.                           
                                                                               
  Number 343                                                                   
                                                                               
  REP. KOTT asked if the KPBTF would address the same areas of                 
  concern that would likely be addressed by any national                       
  health care plan.                                                            
                                                                               
  REP. G. DAVIS answered yes, but he did not know to what                      
  degree they would be addressed.                                              
                                                                               
  Number 356                                                                   
                                                                               
  REP. KOTT noted the zero fiscal note for the resolution and                  
  asked what financial support the resolution hoped to secure                  
  from the governor.                                                           
                                                                               
  REP. G. DAVIS said the zero fiscal note indicated the                        
  resolution would require no general fund money, but it could                 
  be possible for the project to receive the benefit of                        
  capital dollars.  He said he was not sure.                                   
                                                                               
  REP. KOTT said it seemed that the bill did seem to carry                     
  some fiscal impact by asking the governor to direct the                      
  commissioner of the Department of Health and Social Services                 
  (DHSS) to support the program.                                               
                                                                               
  REP. G. DAVIS said he would be willing to contribute part of                 
  his discretionary dollars to the plan.  He added that there                  
  might be capital funds available in the DHSS as well.  He                    
  said if money had been made available to the state HRATF it                  
  should be redirected to the KPBTF as a model project.                        
                                                                               
  Number 377                                                                   
                                                                               
  REP. KOTT commented that a commissioner had a limited supply                 
  of discretionary funds.                                                      
                                                                               
  Number 384                                                                   
                                                                               
  CHAIR TOOHEY asked if there were any medical doctors (MD's)                  
  involved in the KPBAC.                                                       
                                                                               
  REP. G. DAVIS answered that there were, but they were not so                 
  identified.                                                                  
                                                                               
  CHAIR TOOHEY said that DDS's and DO's had been identified,                   
  but not MD's.                                                                
                                                                               
  REP. G. DAVIS said that one member of the advisory council                   
  represented the physicians on the medical staff of the                       
  Central Peninsula General Hospital.                                          
                                                                               
  Number 395                                                                   
                                                                               
  CHAIR TOOHEY asked if the task force recommendation was the                  
  same as a plan put forth by Sen. Jim Duncan.                                 
                                                                               
  REP. G. DAVIS answered no, the state task force's final                      
  report contained several recommendations, one of which was                   
  included in the KPBTF findings.                                              
                                                                               
  Number 408                                                                   
                                                                               
  CHAIR TOOHEY offered a few comments on health care from the                  
  perspective of a former emergency room nurse.  She said no                   
  one had ever been turned away from health care, ever, and                    
  would not in the near future.  She said she had a problem                    
  with mandating health reform when 85 percent of those                        
  working in the state of Alaska worked for a government                       
  entity, and therefore were entitled to health benefits.  She                 
  also noted the public health services, the Indian Health                     
  Service, Native Health Services and Medicaid/Medicare, and                   
  said she did not see that there was such a gap with people                   
  being uninsured.  She said she was glad the KPB was                          
  developing its own plan, but wondered whether $250,000 in                    
  general funds for Kenai residents alone was a question.  She                 
  said she did not want to tie the entire state to the Kenai                   
  project, because she did not see that much of a need across                  
  the state for such a health care plan.                                       
                                                                               
  Number 429                                                                   
                                                                               
  REP. G. DAVIS said many groups were studying the health care                 
  situation and that something, he did not know what, would be                 
  done in the next five to eight years.  He said the KPBTF and                 
  the city of Soldotna saw that no one else had tried their                    
  particular kind of plan and they wanted to start doing                       
  something.  He said it would be interesting to see what                      
  President Clinton's wife would propose for health care                       
  reform.                                                                      
                                                                               
  Number 442                                                                   
                                                                               
  CHAIR TOOHEY asked whether the state should be involved in                   
  funding such a plan for a specific area.                                     
                                                                               
  REP. G. DAVIS said that the Kenai plan was being presented                   
  as a pilot program for the entire state to see if it would                   
  be cost-effective and if it would win the support of all the                 
  necessary groups to operate successfully.                                    
                                                                               
  Number 454                                                                   
                                                                               
  REP. BUNDE said he shared Chair Toohey's hesitation about                    
  spending $250,000 for the program, but said he wondered how                  
  much a state-wide pilot program would cost.  He said he was                  
  frustrated at the state's seeming pattern of studying                        
  problems, but stopping short of taking action the findings.                  
  He said the problem has been studied thoroughly, and that                    
  action was needed, not more study.                                           
                                                                               
  REP. VEZEY said there was no fiscal note and he did not want                 
  to interfere with local decisions by the Kenai Peninsula                     
  Borough.  However, he said that medical facilities never                     
  deny care to those that need it, even the uninsured, even                    
  though other insured patients end up footing the bill.  He                   
  cautioned that there had been many experiments in providing                  
  life-time medical care over the decades, and that most had                   
  failed in bankruptcy.  He said he would be very unreceptive                  
  to any later requests from the KPB for money to pay debts it                 
  incurred through its health care plan to bail it out.                        
                                                                               
  Number 481                                                                   
                                                                               
  REP. G. DAVIS said that, under the proposed regulations, the                 
  tax-paying citizens of the KPB would pay off any debt                        
  incurred under the plan.                                                     
                                                                               
  CHAIR TOOHEY asked Rep. G. Davis if the KPB plan would deal                  
  with hospitals just in the borough or in Anchorage as well.                  
                                                                               
  REP. G. DAVIS answered that the plan would deal primarily                    
  with hospitals in the KPB.                                                   
                                                                               
  CHAIR TOOHEY asked if the hospitals could do gall bladder                    
  operations or open-heart surgery in those hospitals.                         
                                                                               
  Number 489                                                                   
                                                                               
  REP. G. DAVIS answered no; the hospitals on the peninsula                    
  did not perform such procedures, but those were not a                        
  primary health care concern in the borough.  He added that                   
  there would be approved providers and approved fee levels                    
  for all services.                                                            
                                                                               
  CHAIR TOOHEY asked if he had a list of such services.                        
                                                                               
  REP. G. DAVIS answered no.                                                   
                                                                               
  Number 490                                                                   
                                                                               
  CHAIR TOOHEY asked if the plan envisioned tort reform.                       
                                                                               
  REP. G. DAVIS answered no, but then corrected himself,                       
  saying that there had been much discussion of liability, and                 
  that the issue was proposed to be addressed in the plan.                     
                                                                               
  Number 502                                                                   
                                                                               
  CHAIR TOOHEY noted that the HESS Committee had introduced a                  
  CHIPRA bill, and a separate though related bill for tort                     
  reform.  She said it was all a good plan and that the state                  
  needed to begin addressing such things, but there was a need                 
  to hear more about the plan.                                                 
                                                                               
  REP. BUNDE said that the cost savings from the KPB plan                      
  would come from prevention of health problems.                               
                                                                               
  CHAIR TOOHEY noted that there were many old people with                      
  clogged arteries.                                                            
                                                                               
  Number 517                                                                   
                                                                               
  REP. G. DAVIS said Rep. Bunde was correct, and all those                     
  involved in health care realized that prevention was a key                   
  element of a successful plan.  He said the KPB plan                          
  recognizes the high cost of emergency room care, and had                     
  proposed a "gatekeeper" who would direct emergency room                      
  patients to lower-intensity, lower-cost services where                       
  appropriate.                                                                 
                                                                               
  Number 531                                                                   
                                                                               
  HARLAN KNUDSON, PRESIDENT/CEO OF THE ALASKA STATE HOSPITAL &                 
  NURSING HOME ASSOCIATION, testified in support of HCR 17,                    
  saying the key to health care reform was keeping options                     
  open.  He said the KPB community-wide approach to managing                   
  health care expenditures was a viable option that deserved                   
  state nurturing.  He said Kenai was the only community                       
  studying its health care expenses.  He said the KPB plan                     
  started several years ago in Seward, with the support of the                 
  University of Washington, which resulted in a study showing                  
  that there was enough money in Seward to pay for health                      
  care, but it was poorly managed.  He said the Kenai plan did                 
  not try to raise more money for health care, but aimed at                    
  improving its health care delivery system, then managing                     
  expenses, and making referrals for high-cost procedures to                   
  facilities which will hold down costs.  He said the                          
  association matched the likely direction of federal health                   
  care reform efforts toward allowing states different                         
  options.  He said the Kenai plan was one option.  He said                    
  the legislature will, in 1994, consider the report of the                    
  HRATF, which proposes a single-payer system.  He said the                    
  legislature will also study the CHIPRA proposal, which would                 
  funnel all money through a state clearinghouse.  He said                     
  that it would be nice to have the Kenai plan as a third                      
  option.  He said he did not know if the plan would work or                   
  not, but it was worth a try.                                                 
                                                                               
  Number 563                                                                   
                                                                               
  CHAIR TOOHEY asked if there had yet been a vote on the plan.                 
                                                                               
  REP. G. DAVIS answered no, that a vote would be held in                      
  October 1993.                                                                
                                                                               
  CHAIR TOOHEY expressed a desire to confine the program to                    
  the Kenai.                                                                   
                                                                               
  REP. G. DAVIS said the resolution asked the state to use the                 
  Kenai program as a model for the state as a way to help the                  
  state provide services or alternatives anywhere in the                       
  state.                                                                       
                                                                               
  Number 573                                                                   
                                                                               
  CHAIR TOOHEY said she had seen two polls indicating that                     
  health care was a low priority for the Alaska public, as the                 
  state had so much government employment.                                     
                                                                               
  REP. VEZEY asked about the low priority for health care as                   
  opposed to what else.                                                        
                                                                               
  CHAIR TOOHEY answered employment, the economy, cutting the                   
  budget, and other issues.                                                    
                                                                               
  Number 583                                                                   
                                                                               
  KEN SYKES, INSURANCE ANALYST FOR THE DIVISION OF INSURANCE                   
  IN THE DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT,                      
  posed several questions concerning HCR 17.  He asked:                        
       1) whether the voters had examined Title 21, Chapter                    
  86, containing financial requirements for setting up an HMO                  
  prior to implementation;                                                     
       2) whether the resolution allowed for an exemption of                   
  taxation under current state statutes and laws;                              
       3) if the officers of the HMO were to be public                         
  officials, which would require a substantial bond be posted                  
  by each such official or director or employee of the HMO.                    
  He said he had heard the figure $290,000 tossed around as                    
  possible seed money, and commented that it was his                           
  approximate recollection that it was necessary for those                     
  establishing an HMO to deposit $250,000 to the state prior                   
  to implementation.                                                           
       4) if the Kenai task force planners had filed the                       
  contracts they would use with the state Division of                          
  Insurance, or obtained waivers of the need for a contract?                   
                                                                               
  MR. SYKES said it would be good to answer those questions as                 
  a way to avoid conflicts over jurisdiction.                                  
                                                                               
  Number 598                                                                   
                                                                               
  REP. G. DAVIS said he would research the answers to those                    
  questions and said that the task force would take no steps                   
  toward implementation before the election on the plan.  He                   
  said the $290,000 sought by the task force was seed money                    
  that might allow the task force to seek foundation grants.                   
  He said the task force was familiar with state bonding                       
  requirements.  He said he assumed that those involved in the                 
  task force, including public administrators, doctors, and                    
  major industry officials, would be familiar with Title 86                    
  and HMO statutes, but he could not say so specifically.                      
                                                                               
  TAPE 93-64, SIDE B                                                           
  Number 000                                                                   
                                                                               
  REP. G. DAVIS asked Mr. Sykes to write all of his questions                  
  in the form of a letter.                                                     
                                                                               
  Number 050                                                                   
                                                                               
  MR. SYKES agreed to do so, and added that he would have to                   
  review the statute (86) as he believed it was impossible for                 
  the borough to solicit seed money before his division had                    
  issued a certificate of authority, meaning implementation of                 
  financial standards.                                                         
                                                                               
  REP. G. DAVIS thanked Mr. Sykes for his questions and his                    
  input.                                                                       
                                                                               
  Number 024                                                                   
                                                                               
  REP. VEZEY observed that the measure at hand was a                           
  resolution, expressing intent, and did not carry the force                   
  of law.                                                                      
                                                                               
  MR. SYKES said that the Kenai Borough might be violating the                 
  law by going forward with a resolution and implementing the                  
  plan.                                                                        
                                                                               
  Number 035                                                                   
                                                                               
  CHAIR TOOHEY observed that it was just a resolution, not a                   
  bill.                                                                        
                                                                               
  MR. SYKES agreed, but said the resolution demonstrated                       
  intent, and he wanted to pose those questions.                               
                                                                               
  CHAIR TOOHEY observed that the committee could not move the                  
  resolution without coming back with it later.                                
                                                                               
  Number 048                                                                   
                                                                               
  REED STOOPS, A LOBBYIST FOR THE AETNA INSURANCE CO.,                         
  testified on HCR 17.  He said the resolve clause on page 3                   
  was specific on intending that the KPB health care plan be a                 
  model for pooling insurance for a community rating for small                 
  group reform for HMOs.  He said those were the only models                   
  given for health care reform; and, as the plan had not yet                   
  been enacted or approved by voters, and as no one in the                     
  committee was able to answer detailed questions, there still                 
  remained questions on the nature of the pooling arrangement,                 
  the nature of community rating, and whether small group                      
  reform differed from the version already moved from the                      
  committee.  He suggested rewording the resolution to                         
  recognize the experimental nature of the proposal instead of                 
  getting into specifics, some of which might be                               
  controversial.                                                               
                                                                               
  Number 097                                                                   
                                                                               
  CHAIR TOOHEY called an at-ease, then returned the meeting to                 
  order.                                                                       
                                                                               
  MR. STOOPS suggested striking the word "model" on page 11,                   
  line 3, and inserting the word "experimental," and deleting                  
  the four clauses dealing with the specific nature of the                     
  program.  He said that would leave HCR 17 as a resolution to                 
  endorse the KPB Health Care Advisory Council as an                           
  experimental regional area for health care reform.  He said                  
  it wold be premature to make the conclusion that the plan                    
  should be a model for reform.                                                
                                                                               
  CHAIR TOOHEY asked Rep. G. Davis if he would be comfortable                  
  in making the suggested revisions.                                           
                                                                               
  REP. G. DAVIS said he was not comfortable making changes to                  
  the resolution without talking to the chairman of the task                   
  force.                                                                       
                                                                               
  REP. VEZEY pointed out that the legislature was under the                    
  24-hour rule, the five-day rule, and the Thursday rule, and                  
  that it would be necessary to post notice to hear the                        
  resolution again the next day.                                               
                                                                               
  CHAIR TOOHEY commented no, the committee could always hear a                 
  bill a day after its first hearing, and that notice of a                     
  hearing on the resolution had already been published.                        
                                                                               
  REP. VEZEY said he believed there should be some                             
  clarification of the rules.                                                  
                                                                               
  CHAIR TOOHEY asked the committee aide to find an answer to                   
  the question.  She said the committee had already given a                    
  five-day notice of HCR 17.                                                   
                                                                               
  REP. VEZEY noted that the committee was then operating under                 
  23 c) instead of 23 a) and b).                                               
                                                                               
  CHAIR TOOHEY called a brief at-ease at 4:04 p.m., and                        
  returned the committee to order at 4:07 p.m.  She  announced                 
  that the committee would hold HCR 17 until the following                     
  day.  She said she would feel much more comfortable passing                  
  the resolution if it were more generic.                                      
                                                                               
  REP. G. DAVIS said he did not understand why.                                
                                                                               
  CHAIR TOOHEY said it was because the plan was directed                       
  toward approaches that she believed would not succeed.  She                  
  said the plan did not address many issues that needed to be                  
  addressed.                                                                   
                                                                               
  Number 130                                                                   
                                                                               
  REP. G. DAVIS stated, "I think that's, I'm sure the feeling                  
  of the task force is that this is the program that needs to                  
  be put together to work to address all the needs, and to                     
  pull any of them out and restrict them, I just don't see, I                  
  think we should encourage them to do as much as they can..."                 
                                                                               
  CHAIR TOOHEY said that was fine, but she noted that the task                 
  force was asking for state money, making its plan broader                    
  than just the Kenai Peninsula.                                               
                                                                               
  Number 143                                                                   
                                                                               
  REP. G. DAVIS said that was the way to get more for your                     
  money.  He said he did not want the legislature to restrict                  
  the range of possible expenditures for the plan.                             
                                                                               
  CHAIR TOOHEY said she personally felt good about the CHIPRA                  
  and HRATF programs if elements of each could be combined,                    
  and that was the way the state ought to go.  She said she                    
  would have a hard time endorsing either plan, as both were                   
  premature.  She said that basic principles were absent in                    
  both.                                                                        
                                                                               
  Number 157                                                                   
                                                                               
  REP. G. DAVIS said he would not want to tell a task force                    
  with two years' work on the issue that a committee of eight                  
  which had studied the issue for one hour had suggested                       
  changes to the plan.                                                         
                                                                               
  CHAIR TOOHEY said that she had studied the issue longer than                 
  that.  She said that while she had only looked at the                        
  resolution for an hour, she had studied the task force's                     
  work for longer.  She expressed a desire for less                            
  specificity in the resolution.                                               
                                                                               
  REP. G. DAVIS said he would ask the members of the task                      
  force to consider her wishes, and said he thought it was                     
  possible.                                                                    
                                                                               
  CHAIR TOOHEY ADJOURNED the meeting at 4:10 p.m.                              

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