Legislature(2019 - 2020)DAVIS 106

02/20/2020 03:00 PM House LABOR & COMMERCE

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03:09:10 PM Start
03:09:50 PM HB229
05:01:15 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time & Location Change --
Joint with House HSS
Heard & Held
-- Testimony <Invitation Only> --
        HB 229-HEALTH INFORMATION/DATABASE/PUBLIC CORP.                                                                     
3:09:50 PM                                                                                                                    
CHAIR SPOHNHOLZ announced  that the only order  of business would                                                               
be HOUSE  BILL NO.  229, "An Act  establishing the  Alaska Health                                                               
Care Transformation Corporation; relating  to an all-payer claims                                                               
database; and providing for an effective date."                                                                                 
CHAIR  SPOHNHOLZ noted  that  that the  committees  would hear  a                                                               
"Healthcare Transformation  Project Update" [in  conjunction with                                                               
the scheduled hearing of HB 229].                                                                                               
[Chair Spohnholz passed the gavel to Chair Zulkosky.]                                                                           
3:10:09 PM                                                                                                                    
The committee took an at-ease from 3:10 p.m. to 3:11 a.m.                                                                       
3:11:02 PM                                                                                                                    
CHAIR ZULKOSKY noted that HB 229  was referred to the House Labor                                                               
and Commerce Standing  Committee and the House  Health and Social                                                               
Services Standing Committee had been invited to the meeting.                                                                    
3:11:25 PM                                                                                                                    
REPRESENTATIVE SPOHNHOLZ  reported that, according to  the Kaiser                                                               
Family  Foundation,  in  1991 Alaska  health  care  spending  per                                                               
capita  was $2,558,  lower than  the  rest of  the United  States                                                               
average  of  $2,672.    However, by  2014,  Alaska  was  spending                                                               
$11,064 per capita for health care,  a 38 percent higher cost per                                                               
capita in  Alaska, while the  rest of the United  States averaged                                                               
about $8,045.   She added that the health care  cost inflation in                                                               
Alaska was  7.9 percent,  while in the  Lower 48,  this inflation                                                               
was  5.5  percent, according  to  the  Centers for  Medicaid  and                                                               
Medicare.  Even though Alaska  has the most expensive health care                                                               
in the  United States,  the state  has some  of the  worst health                                                               
outcomes in the country.  She  pointed out that health care was a                                                               
huge cost  to state government;  in Alaska, the cost  of Medicaid                                                               
was about $1.2 billion, even as  this was "just a fraction of our                                                               
total  health care  spend."   She  shared an  ISER (Institute  of                                                               
Social  and Economic  Research) report  from September  21, 2018,                                                               
which  estimated about  $8.2 billion  was spent  in the  State of                                                               
Alaska on health care.                                                                                                          
REPRESENTATIVE  SPOHNHOLZ stated  that recent  efforts to  reform                                                               
health  care  included the  Alaska  Health  Care Commission,  the                                                               
inclusion  of  tele-health  coverage   under  Medicaid  with  its                                                               
possible inclusion in the private  market, and Medicaid Expansion                                                               
adopted in  2015 which reduced  the amount of  uncompensated care                                                               
in  the state  and  included  some federal  match  dollars.   She                                                               
referenced Senate Bill  74, passed in 2016,  which incorporated a                                                               
large series of  innovative Medicaid reforms and  saved the state                                                               
hundreds  of millions  of dollars.   In  2018, health  care price                                                               
transparency  legislation   was  passed  which   required  public                                                               
posting  of  the price  and  estimates  for the  most  frequently                                                               
offered  health care  services.   She acknowledged  that although                                                               
much had been  accomplished to chip away at health  care costs in                                                               
the  State of  Alaska,  there  was still  a  lot  of progress  to                                                               
REPRESENTATIVE  SPOHNHOLZ  spoke   about  the  Alaska  Healthcare                                                               
Transformation Project, created  in part from Senate  Bill 74, as                                                               
there was a  need for cross sector collaboration  in health care.                                                               
It would require  a view of the total health  care environment to                                                               
be  able  to  drive  down  health care  costs,  she  said.    She                                                               
explained  that the  transformation Project  included members  of                                                               
the  House of  Representatives, the  Senate, the  administration,                                                               
private    providers,    hospitals,    tribal    health,    labor                                                               
organizations,  patient advocates,  business representatives  and                                                               
more.   She reported that the  goal of the project  was to reduce                                                               
the  cost of  health care  in Alaska  while increasing  access to                                                               
health care and improving its quality.                                                                                          
REPRESENTATIVE SPOHNHOLZ  stated that, although all  the measures                                                               
described were important building  blocks, they were incremental,                                                               
and it  was necessary to  determine what was needed  to transform                                                               
the health care delivery system in  Alaska.  The group decided it                                                               
was necessary to have a  comprehensive understanding of the costs                                                               
of health care,  how much was being spent, and  what it was being                                                               
spent on.  She paraphrased from  the Sponsor Statement for HB 229                                                               
[included in  members' packets], which read  as follows [original                                                               
punctuation provided]:                                                                                                          
     HB   229   would   establish  the   Alaska   Healthcare                                                                    
     Transformation  Corporation   (AHTC),  an  independent,                                                                    
     legal authority to manage  an All-Payer Claims Database                                                                    
     (APCD).   Health  care costs  around the  United States                                                                    
     are  increasing at  an alarming  rate.   Alaskan health                                                                    
     care  costs  are  increasing at  an  even  higher  rate                                                                    
     compared to  other states.  Alaska's  health care costs                                                                    
     38% more than  the rest of the United States.   How can                                                                    
     costs be contained while  improving health care quality                                                                    
     and outcomes  across the state?   The Alaska Healthcare                                                                    
     Transformation  Project, a  group  made  up of  payers,                                                                    
     providers,  policymakers,  and patient  advocates,  has                                                                    
     been  meeting  since  2017 to  work  together  on  this                                                                    
     issue.   One of their recommendations  was to establish                                                                    
     an APCD.                                                                                                                   
     An  APCD is  an aggregation  of health  care data.  The                                                                    
     health care data is a  collection of claims data from a                                                                    
     comprehensive range  of sources such as  private health                                                                    
     insurers,  state  employee  health  benefits  programs,                                                                    
     prescription  drug  plans, dental  insurers,  Medicaid,                                                                    
     and more.  The value of an  APCD is that it  allows for                                                                    
     analysis and  informed decision-making for  health care                                                                    
     consumers and  policy makers.   It  is also  a powerful                                                                    
     tool   for  understanding   the  health   care  market.                                                                    
     Additionally, analysis  of geographic,  demographic and                                                                    
     other  areas of  potential  disparity  can help  inform                                                                    
     policy assessments and improvements.                                                                                       
     Understanding  the underlying  cost drivers  and market                                                                    
     pressures of  the cost of  health care is  important to                                                                    
     developing policies  and solutions.   An  Alaska Health                                                                    
     Care    Transformation    Corporation    tasked    with                                                                    
     establishing  an APCD  will  provide  a foundation  for                                                                    
     ongoing   analysis,  development,   implementation  and                                                                    
     support for  health care policy.   There are  20 states                                                                    
     that have  an APCD.   If passed, this  legislation will                                                                    
     provide the means to develop  health care policies that                                                                    
     can improve access and affordability for all Alaskans.                                                                     
3:17:52 PM                                                                                                                    
REPRESENTATIVE   SPOHNHOLZ,  in   response  to   Chair  Zulkosky,                                                               
reiterated  that the  APCD was  "an aggregation  of de-identified                                                               
health  care   data;  a   collection  of   claims  data   from  a                                                               
comprehensive range of services."                                                                                               
3:18:13 PM                                                                                                                    
REPRESENTATIVE FIELDS  asked if the aggregation  of existing data                                                               
bases  would still  allow for  knowing which  claims occurred  in                                                               
which  hospitals and  surgery centers  and which  insurance plans                                                               
covered  these procedures.   He  asked if  it would  be anonymous                                                               
beyond this.                                                                                                                    
REPRESENTATIVE SPOHNHOLZ said that  the details for the operation                                                               
of   APCD  would   be  determined   by   the  Alaska   Healthcare                                                               
Transformation  Corporation.   She opined  that, as  other states                                                               
had already  been doing this work,  the Healthcare Transformation                                                               
Corporation  would  look  at  those  specific  operations.    She                                                               
expressed  the desire  to have  every  health care  payer in  the                                                               
State of  Alaska contribute their information  in a de-identified                                                               
manner so as not to single out individuals.                                                                                     
REPRESENTATIVE  FIELDS asked  whether "paid"  was defined  as the                                                               
amount of  the bill or  the amount an insurance  company actually                                                               
paid for a  procedure.  He asked  if it was legal  to require the                                                               
insurers to share this data.                                                                                                    
REPRESENTATIVE  SPOHNHOLZ acknowledged  that  there was  existing                                                               
authority  to require  the data  be shared,  except for  Employee                                                               
Retirement  Income   Security  Act  (ERISA)  plans,   which  were                                                               
regulated by the  federal government.  She  shared that currently                                                               
there were discussions  with U.S. Senator Lisa  Murkowski for the                                                               
requirement that  ERISA plans participate  in APCDs.   She stated                                                               
that the  value of an APCD  was that it allowed  for analysis and                                                               
informed decision making by different  parties.  Considered to be                                                               
a superior  data source,  the APCD  included actual  paid claims,                                                               
and  not  charged   amounts,  which  was  a   powerful  tool  for                                                               
understanding the health care market, she related.                                                                              
REPRESENTATIVE SPOHNHOLZ  stated that  these could  help identify                                                               
areas of  practice where prices  were increasing,  or utilization                                                               
was growing in  an unhealthy way, to better  drive policy reform.                                                               
She shared that the vision was  for a public interface for Alaska                                                               
consumers to better  understand the cost for  certain health care                                                               
services.   She  stated that  some values  had been  incorporated                                                               
into this concept.  She relayed  that, as health care operated in                                                               
multiple  jurisdictions in  the state,  within several  different                                                               
departments,  the  creation  of   a  health  care  transformation                                                               
corporation would allow a certain  amount of independence, with a                                                               
clear focused charge, for long  term results.  She suggested that                                                               
the  board  of  the  health care  transformation  corporation  be                                                               
appointed by the governor and then confirmed.                                                                                   
3:23:36 PM                                                                                                                    
CHAIR ZULKOSKY asked about the Health Care Commission.                                                                          
REPRESENTATIVE   SPOHNHOLZ  explained   that   the  Health   Care                                                               
Commission had  been started by  former Governor Sarah  Palin and                                                               
had reviewed a  broad range of topics, including  elements of the                                                               
Patient Protection  and Affordable Care  Act and its  role, along                                                               
with  Medicaid Expansion,  in health  care transformation  in the                                                               
state.   She  noted  that,  as both  Medicaid  Expansion and  the                                                               
Patient Protection and Affordable Care  Act were unpopular in the                                                               
state, the Health Care Commission  was defunded, and its work was                                                               
ended.    She  declared  that  it  was  necessary  to  have  some                                                               
"sideboards" on what  a health care corporation could  do, and to                                                               
also allow the corporation to execute.                                                                                          
3:24:56 PM                                                                                                                    
REPRESENTATIVE STUTES asked who would fund the new corporation.                                                                 
REPRESENTATIVE SPOHNHOLZ directed attention  to the fiscal notes,                                                               
which she noted could change as  they went through the process as                                                               
it was still too  soon to know the final costs.   She pointed out                                                               
that  the  cost  of  health  care in  Alaska  was  expensive  and                                                               
accelerating.   A stated goal  of the health  care transformation                                                               
project was  to reduce this  cost of healthcare inflation  to 2.5                                                               
percent.   She shared that  there were various workgroups  of the                                                               
REPRESENTATIVE STUTES opined  that the State of  Alaska would pay                                                               
for the project.                                                                                                                
REPRESENTATIVE SPOHNHOLZ  replied that the project  would be paid                                                               
for by both the state and the private sector.                                                                                   
3:28:13 PM                                                                                                                    
REPRESENTATIVE  STUTES asked  for  an example  of private  sector                                                               
REPRESENTATIVE  SPOHNHOLZ said  there had  been funding  from the                                                               
Mat-Su  Health Foundation,  the Rasmussen  Foundation, Providence                                                               
Health Systems, and others.                                                                                                     
REPRESENTATIVE STUTES asked what  would prevent this project from                                                               
becoming de-funded.                                                                                                             
REPRESENTATIVE SPOHNHOLZ  offered her  belief that  those working                                                               
on  the project  would  try to  learn from  the  mistakes of  the                                                               
Health  Care  Commission,  specifically  that  a  project  needed                                                               
sideboards.   She  declared  that the  project  had no  authority                                                               
beyond the creation of the APCD.                                                                                                
3:30:01 PM                                                                                                                    
REPRESENTATIVE JACKSON asked who would own the corporation.                                                                     
REPRESENTATIVE  SPOHNHOLZ replied  that  this would  be a  public                                                               
corporation and  the owners would  be the  State of Alaska.   She                                                               
offered  examples of  other such  public entities,  including the                                                               
Alaska Housing Finance Corporation and the Alaska Railroad.                                                                     
REPRESENTATIVE JACKSON asked if this was a medical databank.                                                                    
REPRESENTATIVE SPOHNHOLZ  explained that  it would be  a database                                                               
for paid healthcare claims in Alaska,  and that it would not hold                                                               
individual patient information.                                                                                                 
REPRESENTATIVE  JACKSON  asked  what   product  the  State  would                                                               
receive for its investment in the corporation.                                                                                  
REPRESENTATIVE SPOHNHOLZ  explained that the State  would receive                                                               
information to use for policy reforms.   She said that it was not                                                               
possible to know how to solve  a problem until you understood the                                                               
problem.  She  acknowledged that, although a lot  was known about                                                               
Alaskan  healthcare  data  through individual  lenses,  20  other                                                               
states were  using an APCD  as a foundational building  block for                                                               
healthcare reform.                                                                                                              
REPRESENTATIVE  JACKSON asked  if  there  had been  conversations                                                               
with Senator  Murkowski and whether pharmacists  were included in                                                               
this databank.                                                                                                                  
REPRESENTATIVE SPOHNHOLZ replied that  pharmacy payments would be                                                               
part of this database.                                                                                                          
REPRESENTATIVE JACKSON suggested a volunteer approach.                                                                          
REPRESENTATIVE  SPOHNHOLZ  relayed  that there  was  interest  in                                                               
working with the Alaska federal  delegation to ensure the federal                                                               
health care  claims paid in  Alaska could also be  contributed to                                                               
the database.                                                                                                                   
3:34:04 PM                                                                                                                    
REPRESENTATIVE HANNAN asked for a definition of ERISA.                                                                          
REPRESENTATIVE  SPOHNHOLZ  explained that  an  ERISA  plan was  a                                                               
self-funded, self-insured plan, offering  the State of Alaska and                                                               
the University of  Alaska as examples.  She pointed  out that, as                                                               
they were regulated  by the federal government,  these plans were                                                               
not required to comply with state law.                                                                                          
REPRESENTATIVE HANNAN  offered her belief that,  as most Alaskans                                                               
were in ERISA plans, it would be important to include them.                                                                     
REPRESENTATIVE  SPOHNHOLZ  acknowledged  that a  good  number  of                                                               
Alaskans were  covered by ERISA  plans, with the State  of Alaska                                                               
the largest of these.  She  declared that the state would want to                                                               
participate and, here in the state,  it would not be necessary to                                                               
ask the federal government for  permission to put the state's own                                                               
data into the database.  She  acknowledged that there was not the                                                               
authority to tell the Veterans'  Administration or [Indian Health                                                               
Service] to comply.                                                                                                             
REPRESENTATIVE   HANNAN  asked   if  other   ERISA  plans   could                                                               
voluntarily choose  participation without any changes  to federal                                                               
REPRESENTATIVE  SPOHNHOLZ  opined  that  they  could  voluntarily                                                               
REPRESENTATIVE  HANNAN  noted  that   most  other  health  trusts                                                               
discussed the inability to keep up  with the growth rate for plan                                                               
occupants and  asked if  any other  ERISA plans  were interested.                                                               
She  shared the  concept  of "medical  tourism" which  encouraged                                                               
people  to leave  Alaska for  health care  somewhere cheaper  and                                                               
suggested  that all  services  for Alaskans  be  included in  the                                                               
database, whether delivered in or out of state.                                                                                 
REPRESENTATIVE SPOHNHOLZ  said that she  could not speak  for the                                                               
other  ERISA  plans,  although there  were  active  conversations                                                               
through the Alaska Healthcare Transformation Project.                                                                           
3:37:55 PM                                                                                                                    
CHAIR ZULKOSKY  asked whether  the tribal  health plans  would be                                                               
compelled to provide data.                                                                                                      
REPRESENTATIVE SPOHNHOLZ replied they would not be compelled.                                                                   
CHAIR  ZULKOSKY asked  if the  many  Alaska Native  organizations                                                               
participating in  federal employee  health benefits  be compelled                                                               
to provide information.                                                                                                         
REPRESENTATIVE SPOHNHOLZ  replied that  she had not  yet explored                                                               
3:39:48 PM                                                                                                                    
REPRESENTATIVE FIELDS  asked if there were  other corporations in                                                               
other   states  with   regulatory  powers   which  included   the                                                               
collection of information  from private parties.   He pointed out                                                               
that the  proposed bill  allowed penalties  to be  established to                                                               
ensure  compliance  with   mandatory  healthcare  data  reporting                                                               
requirements.     He   asked  if   employer  funded   plans  were                                                               
potentially subject to fines and if  there was any precedent.  He                                                               
asked who  could be  fined if  there was  failure to  provide the                                                               
requested healthcare data.                                                                                                      
REPRESENTATIVE SPOHNHOLZ said she was  not yet prepared to answer                                                               
all  these  questions as  the  project  was  still in  its  early                                                               
phases,  although   there  was  an  expert   to  provide  invited                                                               
testimony  on  APCDs.    Regarding the  authority,  it  would  be                                                               
necessary to see what authority  other corporations in Alaska had                                                               
to fine people.                                                                                                                 
REPRESENTATIVE  FIELDS  asked  what   additional  data  would  be                                                               
captured that was not currently available.                                                                                      
REPRESENTATIVE  SPOHNHOLZ  said  that  she  would  follow  up  in                                                               
detail, that  they wanted other  perspectives, and that  they did                                                               
want employer plans to participate.                                                                                             
3:43:53 PM                                                                                                                    
REPRESENTATIVE STUTES asked who would  interpret the data and how                                                               
would that lower  health care costs.  She asked  if tribal health                                                               
had been engaged.                                                                                                               
REPRESENTATIVE  SPOHNHOLZ replied  that  tribal  health had  been                                                               
involved with the process from  the beginning and was represented                                                               
on the project  management committee.  She  opined that, although                                                               
reducing health care costs may  not be possible, bending the cost                                                               
curve downward  was a goal.   She  suggested that there  would be                                                               
rules and guidelines  for access to the  information, although it                                                               
would be  available to policy  analysts, researchers,  and policy                                                               
makers  in  the  legislature  and  government,  as  well  as  the                                                               
community  at large  for analysis  in ways  to reform  the health                                                               
care system.  She acknowledged  that there was not clear evidence                                                               
that  all payer  claims databases  "absolutely lower  health care                                                               
costs."     She  emphasized  that,  although   the  reduction  of                                                               
healthcare costs  "might be pie in  the sky," it was  her hope to                                                               
bend  the cost  growth curve.   She  reiterated that  the current                                                               
health  care cost  inflation  was  7.9 percent  in  Alaska.   She                                                               
offered her  belief that a  recognition for the cost  of services                                                               
would identify outliers  who were overcharging.   She shared that                                                               
her focus  on healthcare reform  policy was because she  had seen                                                               
the  impact  on  individuals  and families  from  a  health  care                                                               
crisis.  She stated that an  APCD would remove the ongoing finger                                                               
pointing in the medical industry and allow for movement forward.                                                                
REPRESENTATIVE STUTES  asked for  clarification that  a statewide                                                               
database could determine which areas were too expensive.                                                                        
REPRESENTATIVE  SPOHNHOLZ explained  that this  database was  for                                                               
specific healthcare  services and  was not  regional.   She added                                                               
that preventative  care could  keep people  healthier and  that a                                                               
review  for the  costs to  the range  of provided  services could                                                               
reveal the opportunity  for health care reform.   She pointed out                                                               
that  the cost  of services  in Alaska  could be  as much  as ten                                                               
times those same services in the Lower 48.                                                                                      
3:51:02 PM                                                                                                                    
REPRESENTATIVE SPOHNHOLZ, in  response to Representative Jackson,                                                               
explained  that the  corporation  was proposed  to  be a  public,                                                               
private  partnership with  state  funding,  and potentially  some                                                               
federal  and private  sector  funding.   In  further response  to                                                               
Representative Jackson,  she explained  that an APCD  would allow                                                               
for  fact   checking  with  comprehensive  information   for  the                                                               
spending on health care.                                                                                                        
3:52:54 PM                                                                                                                    
REPRESENTATIVE  FIELDS reported  that the  increase to  the state                                                               
health  care insurance  plan had  been less  than 2  percent, and                                                               
that, since  2015, even  with an increase  of insurance  for more                                                               
than 50,000 people, the state was  spending less on Medicaid.  He                                                               
asked where there  had been success for arresting  the cost curve                                                               
and what were the reductions for ERISA plans.                                                                                   
REPRESENTATIVE SPOHNHOLZ  said there would be  some testifiers to                                                               
answer those questions.                                                                                                         
REPRESENTATIVE CLAMAN  mused that,  as all the  federal insurance                                                               
coverages were  not required to  participate, it  seemed unlikely                                                               
to collect 100 percent of the data.                                                                                             
REPRESENTATIVE SPOHNHOLZ  reiterated that APCDs had  been created                                                               
in 20  other states  and had  proven to be  useful.   She relayed                                                               
that there had been discussion  for a nationwide all payer claims                                                               
database, even as  that discussion was unlikely to  advance.  She                                                               
acknowledged that this  was a big step for Alaska  and pointed to                                                               
various healthcare  reform initiatives launched in  the last five                                                               
years in  Alaska.  She  declared that the problem  for healthcare                                                               
cost  growth had  not been  solved,  and emphasized  that it  was                                                               
necessary to come  together for solutions.  She  pointed out that                                                               
this draft  was a conversation  starter to advance  a significant                                                               
policy measure.   She shared her  hope to work together  toward a                                                               
better proposal.                                                                                                                
3:57:27 PM                                                                                                                    
REPRESENTATIVE  STUTES  opined that  it  would  be good  for  the                                                               
proposed bill  to have  hearings in the  House Health  and Social                                                               
Services Standing Committee.                                                                                                    
REPRESENTATIVE  SPOHNHOLZ allowed  that this  was the  reason for                                                               
the joint  committee meeting.   She reported that health  care in                                                               
Alaska  was in  multiple jurisdictions,  including Department  of                                                               
Labor & Workforce Development,  Department of Administration, and                                                               
Department of  Health and  Social Services.   She noted  that the                                                               
structure of  the corporation was outside  all these departments,                                                               
as it would be housed in  the Department of Commerce, Community &                                                               
Economic Development along with the other public corporations.                                                                  
REPRESENTATIVE STUTES expressed her  assumption that the proposed                                                               
bill  would  be heard  again  in  the  House Labor  and  Commerce                                                               
Standing Committee.                                                                                                             
4:00:13 PM                                                                                                                    
REPRESENTATIVE PRUITT asked how to pay for the corporation.                                                                     
REPRESENTATIVE SPOHNHOLZ explained that  it would be paid through                                                               
the general fund, federal match, and private sector match.                                                                      
REPRESENTATIVE  PRUITT asked  what  was meant  by private  sector                                                               
REPRESENTATIVE SPOHNHOLZ  reported that  the project had  been an                                                               
equal match between  the state and the  private sector, including                                                               
profits  and  non-profits.    She offered  her  belief  that  the                                                               
attached fiscal notes would change as the proposed bill evolved.                                                                
REPRESENTATIVE PRUITT  suggested that  there was not  a guarantee                                                               
for funding from  the private sector.  He asked  how to deal with                                                               
the situation when participants no longer wanted to participate.                                                                
REPRESENTATIVE  SPOHNHOLZ  replied  that she  was  not  currently                                                               
prepared  to   discuss  the   fiscal  notes   in  detail.     She                                                               
acknowledged that  it would be  necessary for some  clarity about                                                               
the  relationship if  the funding  were  to be  based on  private                                                               
match.   She declared  that she was  "fairly agnostic"  about how                                                               
the APCD was funded.  She  suggested that this would be discussed                                                               
in more detail during the invited testimony.                                                                                    
REPRESENTATIVE PRUITT asked how to ensure confidentiality.                                                                      
REPRESENTATIVE SPOHNHOLZ  said that the invited  testifiers could                                                               
better answer this.                                                                                                             
4:03:27 PM                                                                                                                    
REPRESENTATIVE  CLAMAN  asked  whether   there  was  an  existing                                                               
federal match program if the money was provided.                                                                                
REPRESENTATIVE SPOHNHOLZ said  that she would follow  up on those                                                               
specifics, noting that there were some potential options.                                                                       
REPRESENTATIVE  CLAMAN relayed  that he  would be  more reassured                                                               
with an  existing match program.   He asked about  current access                                                               
to the Medicaid data.                                                                                                           
REPRESENTATIVE SPOHNHOLZ  said that  the State of  Alaska already                                                               
had access to  the Medicaid data, which  included about one-third                                                               
of the patient population.                                                                                                      
REPRESENTATIVE CLAMAN asked if there  was currently access to any                                                               
other health care data.                                                                                                         
REPRESENTATIVE   SPOHNHOLZ  replied   that,  although   data  was                                                               
accessible, it was not well used  because the State of Alaska had                                                               
to contract for analysis.   In response to Representative Claman,                                                               
she explained that,  as the state contracted  for analysis, there                                                               
was  not  routine  access  to the  information,  which    created                                                               
difficulty for policy researchers to collect the data.                                                                          
REPRESENTATIVE  CLAMAN   asked  if  the  data   from  the  health                                                               
facilities reporting program was currently available.                                                                           
REPRESENTATIVE SPOHNHOLZ said that she did not know.                                                                            
4:07:41 PM                                                                                                                    
CHAIR ZULKOSKY  asked if the  project had performed  any analysis                                                               
of the existing Medicaid data.                                                                                                  
REPRESENTATIVE SPOHNHOLZ replied, "Yes."                                                                                        
REPRESENTATIVE TARR  asked to better understand  analysis and use                                                               
for the collection of data after it was aggregated.                                                                             
REPRESENTATIVE  SPOHNHOLZ explained  that the  way to  define the                                                               
data was determined by the amount  of data, but there would still                                                               
be the ability to understand from  where it originated even as it                                                               
was  de-identified.   She  stated  that there  was  no desire  to                                                               
undermine any  competitive advantage by revealing  information in                                                               
a public  place.  She  suggested various people to  discuss these                                                               
questions.   She noted that,  as 17  percent of Alaskans  were in                                                               
the private marketplace, it was necessary to review the costs.                                                                  
REPRESENTATIVE  TARR  pointed  out  that  none  of  the  smaller-                                                               
population Western states had APCDs.                                                                                            
REPRESENTATIVE   SPOHNHOLZ  offered   her  belief   that  putting                                                               
together  the APCD  was  determined by  the  benefits versus  the                                                               
economics.   She  stated  that  the goal  was  to  buy access  to                                                               
another existing  database and populate  it with  information, as                                                               
it was the functionality that was required.                                                                                     
4:13:52 PM                                                                                                                    
REPRESENTATIVE STUTES  asked if  there were experts  to interpret                                                               
the data.                                                                                                                       
REPRESENTATIVE SPOHNHOLZ replied that  this would be dependent on                                                               
how the  corporation was structured.   She referenced  a proposed                                                               
fiscal  note  from  the Division  of  Insurance  which  estimated                                                               
proposed  staffing by  seven  people.   She  added  that she  was                                                               
unsure if  this was the correct  number and that she  was open to                                                               
4:15:19 PM                                                                                                                    
REPRESENTATIVE FIELDS asked how to  collect the data and what was                                                               
the correct structure  for analysis.  He reported  that there had                                                               
been a  40 percent  reduction in  workers' compensation  cost and                                                               
asked if collaboration was being reviewed for the project.                                                                      
REPRESENTATIVE  SPOHNHOLZ  reiterated  that there  was  indeed  a                                                               
"pretty  significant health  care  cost problem  in this  state."                                                               
She  pointed  out that  the  collaborative  process used  by  the                                                               
Medical Services  Review Panel was  a different kind  of process,                                                               
as  it looked  at individual  claims to  make determinations  for                                                               
appropriate  care.   She declared  that this  was far  beyond the                                                               
authority  that had  been proposed  to  give to  the health  care                                                               
transformation council.   She explained  that this  council would                                                               
allow  analysts to  comb through  the data  to better  understand                                                               
ways to re-design  the health care system.  She  stated that this                                                               
was an important building block  to better understand the picture                                                               
for health care expenses.                                                                                                       
REPRESENTATIVE  FIELDS  asked  if  she  had  viewed  the  Medical                                                               
Services  Review  Panel  as a  potential  structure  without  the                                                               
REPRESENTATIVE SPOHNHOLZ replied that she had not.                                                                              
4:17:21 PM                                                                                                                    
REPRESENTATIVE  PRUITT asked  who  could access  and analyze  the                                                               
data.  He offered his  belief that the proposed corporation would                                                               
be  extensive and  do  more than  simply house  a  database.   He                                                               
reminded the committee about the issues of confidentiality.                                                                     
REPRESENTATIVE SPOHNHOLZ stated that she  did not mean to suggest                                                               
there would  be unfettered access to  the data.  The  APCD would,                                                               
instead, be a  structure from which to request data  on a regular                                                               
basis.    She  explained  that  the  proposed  corporation  would                                                               
identify  safe,  secure,  and de-identified  processes  by  which                                                               
researchers  and policy  analysts could  request the  data.   She                                                               
directed  attention to  page 3,  [lines 21-28],  of the  proposed                                                               
bill, which listed the purpose of the corporation as follows:                                                                   
               (1) collect and  analyze existing health care                                                                    
     cost and quality data;                                                                                                     
               (2)  create   an  objective,   reliable,  and                                                                    
     comprehensive   central  repository   of  health   care                                                                    
               (3) provide  researchers, policy  makers, and                                                                    
     the  public timely  and  transparent  access to  health                                                                    
     care  information while  protecting individual  privacy                                                                    
     and proprietary data;                                                                                                      
               (4)  enable researchers,  policy makers,  and                                                                    
     the public  to make informed health  care decisions and                                                                    
     reduce unnecessary health care costs.                                                                                      
REPRESENTATIVE SPOHNHOLZ pointed out  that this draft legislation                                                               
was  an opening  conversation  as conceived  by the  cross-sector                                                               
stakeholder  committee.   She stated  that  she welcomed  further                                                               
suggestions or "sideboards that you'd like to put on it."                                                                       
REPRESENTATIVE  PRUITT  said that  he  wanted  to understand  the                                                               
scope.   He asked  if the  idea was for  only the  researchers to                                                               
analyze.    He  questioned  the associated  costs  for  different                                                               
REPRESENTATIVE  SPOHNHOLZ  acknowledged   that  these  were  good                                                               
questions for discussion.                                                                                                       
4:23:37 PM                                                                                                                    
REPRESENTATIVE SPOHNHOLZ, in  response to Representative Jackson,                                                               
reiterated that the  project cost had been  split equally between                                                               
the  government allocated  appropriation and  the private  sector                                                               
through the  non-profit community.   She added that a  bending of                                                               
the Medicaid  cost curve down  from its current inflation  of 4.4                                                               
percent to  2.5 percent would result  a savings of more  than $30                                                               
million in one  year, adding that this was only  about 20 percent                                                               
of the  total healthcare spend.   She reported that, of  the $8.2                                                               
billion  spent  on health  care  in  Alaska,  most was  from  the                                                               
public, from Medicaid,  state employees and retirees,  and that a                                                               
bend of  the cost  curve would  result in a  huge savings  with a                                                               
minor investment.                                                                                                               
REPRESENTATIVE JACKSON  stated that  currently every  Alaskan was                                                               
paying for  this cost bend and  asked how far down  the road this                                                               
was from a reality.                                                                                                             
REPRESENTATIVE SPOHNHOLZ  shared an  analogy for the  decision to                                                               
make a house  repair for water dripping into the  living room.  A                                                               
person  could continue  to replace  the carpet  annually or  they                                                               
could fix the roof and create  annual savings.  She declared that                                                               
this was "a  matter of getting our fiscal house  in order for the                                                               
state."  She  emphasized that it was necessary  to resolve health                                                               
care  cost growth,  restating it  was outrageous  how much  money                                                               
Alaskans were spending on health care.                                                                                          
REPRESENTATIVE JACKSON  offered her belief that  it was necessary                                                               
to resolve the issue for all Alaskans.                                                                                          
4:28:59 PM                                                                                                                    
REPRESENTATIVE   FIELDS  asked   how  explicitly   providers  and                                                               
employers had  bought into  this significant  change in  the rate                                                               
structure.     He  asked  if   the  proposed   corporation  would                                                               
ultimately have the  power to dictate changes in rates  to a wide                                                               
range of employers.                                                                                                             
REPRESENTATIVE SPOHNHOLZ said  that she was not  advocating for a                                                               
capitated payment structure in the proposed bill.                                                                               
4:30:16 PM                                                                                                                    
SCOTT  LEITZ,  Project  Director, NORC,  University  of  Chicago,                                                               
explained  that  NORC  [formerly   called  the  National  Opinion                                                               
Research Center] was  one of the largest  social science research                                                               
organizations in  the country.   He reported  that over  the past                                                               
year he  was the project director  for NORC during its  work with                                                               
the  Alaska Healthcare  Transformation Project.   He  stated that                                                               
the research had  resulted in a series of  recommendations to the                                                               
project steering  committee, which fell into  four larger scopes:                                                               
conduct  some meta-analyses  of  previous Alaska  studies; do  an                                                               
historic scan  of previous  work in  Alaska around  Alaska health                                                               
care  innovation; conduct  a national  scan  of promising  models                                                               
which other states were exploring;  and then, based on this work,                                                               
create  a  roadmap with  recommendations  for  how to  best  move                                                               
forward  to consider  revising and  revamping some  issues around                                                               
Alaska's healthcare  system.  He  relayed that these  reports had                                                               
confirmed that  the cost of health  care in Alaska was  high on a                                                               
relative basis  compared to the  rest of  the United States.   He                                                               
noted that  the costs  were driven by  a variety  of complicated,                                                               
interrelated factors.                                                                                                           
MR.  LEITZ stated  that  a  lack of  more  recent, detailed  data                                                               
hindered efforts to  better understand what was  happening in the                                                               
health care  system and what  was driving costs.   Those findings                                                               
formed  a core  for two  central recommendations:  (1) the  state                                                               
should  establish  an APCD;  (2)  the  information needed  to  be                                                               
analyzed  by   a  trusted  entity,   in  order  to   bring  forth                                                               
recommendations in  a collaborative, stakeholder way.   He shared                                                               
that much of the work to  correctly orient the health care system                                                               
was  built around  the availability  of data  and information  to                                                               
drive  those  decisions.    The  policy  decisions  were  greatly                                                               
informed by  the information  available to  the public  and would                                                               
allow discussions  based on the data.   He noted that  almost all                                                               
the  institutions studied  had APCDs.    These databases  enabled                                                               
them to better  understand the cost drivers, and  to allow policy                                                               
to be  crafted around focused issues.   The analysis of  data had                                                               
to be  performed by an entity  who was broadly trusted  among the                                                               
stakeholders  and  had the  capacity  to  conduct analysis.    He                                                               
pointed out  that, as reform of  health care was a  long road, it                                                               
was necessary  for the trusted  entities to continue  work across                                                               
multiple administrations.                                                                                                       
REPRESENTATIVE  FIELDS  asked  for  an explanation  to  the  "sea                                                               
change"  for the  changing rate  in health  care costs  in Alaska                                                               
from  the  fastest-growing rates  between  2000  - 2014,  to  the                                                               
slowest in the country since then.                                                                                              
MR. LEITZ said that it was  multi-factorial.  He explained that a                                                               
review of the  data compared the overall costs  for Alaska health                                                               
care  spending  relative  to  the   rest  of  the  country.    He                                                               
acknowledged that  the costs were significantly  higher in Alaska                                                               
both on  a per capita and  an aggregate basis.   He expressed his                                                               
agreement that efforts  had slowed the health  care cost spending                                                               
in  Alaska.   Regardless of  which measure,  the spending  levels                                                               
were higher  in Alaska.  He  noted that, although there  would be                                                               
year-to-year  changes based  on negotiations  and changes  in the                                                               
state Medicaid  program that might  temporarily slow  growth, the                                                               
overall  trend was  for rates  of  growth still  higher than  the                                                               
national rates.                                                                                                                 
4:39:44 PM                                                                                                                    
CHAIR ZULKOSKY  asked if the  APCDs in  the other 20  states were                                                               
similarly structured, with a corporation managing the databases.                                                                
MR.  LEITZ  stated  that  this   varied  with  each  state.    He                                                               
emphasized  that  it was  most  important  that people  felt  the                                                               
structure led to independence of  the organization, that the data                                                               
produced was neutral, and that  the information was trusted to be                                                               
valid, neutral, reliable, and not biased by stakeholders.                                                                       
CHAIR ZULKOSKY asked about the results  if it was not possible to                                                               
compel a significant number of providers to share information.                                                                  
MR.  LEITZ   acknowledged  that  Alaska  did   have  some  unique                                                               
characteristics, as there was a  higher proportion of individuals                                                               
with TRICARE and Indian Health Service.   He said it was possible                                                               
to  glean  an  enormous  amount of  information  from  commercial                                                               
claims,  as  well as  Medicare  and  Medicaid claims  which  were                                                               
available to the  state.  He noted that, as  many large employers                                                               
dealt  with healthcare  costs, there  was  a lot  of interest  in                                                               
participation in APCDs  and that a great deal  of information was                                                               
available to  form much better  healthcare policy.   He suggested                                                               
that "the  guiding star shouldn't  necessarily be getting  to 100                                                               
percent; it  should be making  sure that you  have representative                                                               
data that allows  you to say things about  the commercial market,                                                               
the Medicaid  market, and  other markets  that exist  within your                                                               
4:45:13 PM                                                                                                                    
REPRESENTATIVE  CLAMAN  asked about  results  if  only 30  or  40                                                               
percent  of data  was available,  instead  of in  the 80  percent                                                               
range,  and whether  this would  change the  perspective for  the                                                               
value of that data.                                                                                                             
MR. LEITZ estimated that 23  percent of the Alaska population was                                                               
covered  by  Medicaid  and  about   12  percent  was  covered  by                                                               
Medicare, equaling more  than a third of  the state's population,                                                               
and that this  data was available.  He opined  that this combined                                                               
with the  individual marketplace  would offer  data for  about 60                                                               
percent, even  if none of  the ERISA plans chose  to participate,                                                               
and that  this was a  "pretty representative group of  being able                                                               
to look  at what  cost trends  look like within  the state."   He                                                               
offered  his  belief  that  this would  provide  deep  and  solid                                                               
information  about the  Alaska marketplace  as many  of the  same                                                               
insurers contracted with many of  the same provider organizations                                                               
cutting across the sectors.   He acknowledged that, although more                                                               
data  was better  than  less data,  there  was solid  information                                                               
REPRESENTATIVE CLAMAN  asked for clarification that  the value of                                                               
the data dropped if there was less than 50 percent available.                                                                   
MR. LEITZ  replied that given the  nature of the union  trusts in                                                               
Alaska, there would hopefully be  a willingness to participate in                                                               
this database  to gain more  broad information about  health care                                                               
costs to allow them to better  manage their plans.  He added that                                                               
any  data from  portions  of  the private  market  that were  not                                                               
currently captured  would still  give a  lot more  information to                                                               
better form public policy than  what was currently available.  He                                                               
stated:  "I don't know what the  magical number is; I wish I did,                                                               
and I don't know  that there is such a thing."   He declared that                                                               
it  was  highly likely  to  capture  substantially more  than  50                                                               
percent of the market with this database.                                                                                       
REPRESENTATIVE CLAMAN  declared that he had  real questions about                                                               
participation  and the  expense until  he had  greater confidence                                                               
for the level  of participation.  He stated that  there was not a                                                               
compelling case for the benefit of  the cost if the percentage of                                                               
available data was lower than 50 percent.                                                                                       
4:50:39 PM                                                                                                                    
REPRESENTATIVE FIELDS expressed his doubt  that there would be 50                                                               
percent  of data  if only  Medicaid, Indian  Health Service,  and                                                               
ERISA plans were available.                                                                                                     
MR. LEITZ  offered his belief  that TRICARE was about  10 percent                                                               
of  the state  population, Medicare  and Medicaid  were about  35                                                               
percent  of the  state population,  and he  was not  sure of  the                                                               
employer sponsored insurance population.   He declared that about                                                               
50  percent  of  the  state population  was  covered  by  private                                                               
insurance through an employer, although  he did not know how many                                                               
of these were self-insured versus  fully insured.  He stated that                                                               
the individual market in Alaska  was about 8 percent.  Therefore,                                                               
the  combined  total  of  Medicare,  Medicaid,  and  the  private                                                               
directly purchased  insurance accounted  for about 40  percent of                                                               
the market.   As  the employer sponsored  insurance was  about 50                                                               
percent of the  market, and it was assumed that  half of that was                                                               
fully insured, that  would allow availability of  data from about                                                               
60 percent of the market.                                                                                                       
4:52:45 PM                                                                                                                    
REPRESENTATIVE  SPOHNHOLZ  clarified  that the  total  amount  of                                                               
money  spent on  Medicaid was  about $2.2  billion and  had grown                                                               
from $1.3 billion  in 2012 per the report from  the Department of                                                               
Health and Social Services.                                                                                                     
REPRESENTATIVE TARR pointed  out that Vermont was  the only other                                                               
small population  state that had an  APCD, and she asked  how the                                                               
database would work with such small populations.                                                                                
MR. LEITZ  said that,  regardless of  state population  and given                                                               
the  diversity  of  Alaska, the  information  from  the  database                                                               
allowed the ability to look  at regional differences.  He offered                                                               
his belief that  states had to make individual  decisions for how                                                               
they  wished  to  analyze  the  information  and,  regardless  of                                                               
population, be  able to "really  dig in;  look at the  more local                                                               
level of what's  driving health care cost growth  and patterns of                                                               
use and  other things, and then  make those decisions at  a local                                                               
level" for  what made sense to  address it.  He  noted that there                                                               
was not a perfect correlation between  size and an interest in an                                                               
APCD, but  it was instead driven  by cost growth and  an interest                                                               
in understanding patterns of utilization for policy decisions.                                                                  
REPRESENTATIVE   TARR  said   that  she   would  appreciate   any                                                               
additional thoughts.                                                                                                            
4:57:04 PM                                                                                                                    
REPRESENTATIVE HANNAN asked what  state the highest percentage of                                                               
data had reported to the APCD and how that state got to that.                                                                   
MR.   LEITZ  said   that  another   testifier  could   have  that                                                               
REPRESENTATIVE HANNAN asked about the  data for retirees, as they                                                               
were the fastest  growing demographic in Alaska,  and whether the                                                               
databases could  account for this  demographic and the  effect on                                                               
health care costs.                                                                                                              
MR. LEITZ  replied that  the APCD,  collected in  a de-identified                                                               
way, would allow an analyst to  see age groupings and patterns of                                                               
utilization for  those groups, as  well as costs  associated with                                                               
the services delivered  to those groups.  He added  that the APCD                                                               
revealed  variations in  service  use and  patterns, showed  high                                                               
utilization areas in a state, why  they existed, and if they were                                                               
prevalent  in  specific demographic  groups.    That would  allow                                                               
these  to be  addressed and  get  the system  oriented to  reduce                                                               
those  variations.   He  explained  that  the APCDs  allowed  the                                                               
breakdown for analysis by ages,  by geographic areas, and by time                                                               
of  insurance  coverage,  to  allow  deeper  research  to  better                                                               
understand how to  solve some of the challenges to  the high cost                                                               
of healthcare.                                                                                                                  
5:00:17 PM                                                                                                                    
CHAIR ZULKOSKY passed the gavel to Chair Spohnholz.                                                                             
5:00:33 PM                                                                                                                    
REPRESENTATIVE CLAMAN  opined that  because of the  complexity of                                                               
the proposed  bill, it  should include a  referral to  [the House                                                               
Health and Social Services Standing Committee].                                                                                 
[HB 229 was held over.]                                                                                                         

Document Name Date/Time Subjects
HB 229 and supporting documents.pdf HL&C 2/20/2020 3:00:00 PM
HL&C 2/21/2020 3:15:00 PM
HB 229
Alaska Healthcare Transformation Project Presentation HHSS and HLC.pdf HL&C 2/20/2020 3:00:00 PM
Health Care Transformation