Legislature(2001 - 2002)
02/28/2001 01:39 PM Senate HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
DEPUTY COMMISSIONER RUSS WEBB, DHSS, introduced Randall Burns,
Director of the Alaska Psychiatric Institute (API), and informed
the committee that SB 96 will make a capital investment needed to
replace an old facility and provide an efficient place to perform a
core function of government far into the future.
MR. RANDALL BURNS, API, said he asked the committee for the
opportunity to make the case for passage of SB 96, the Governor's
bill regarding certificates of participation to finance the API
2000 project. He is also here to represent the staff and managers
of the hospital and, most importantly, the API patients. The
existing API facility does not meet current therapeutic environment
standards for patient care, which impacts the care that is
provided. From his perspective, that is the most important issue
behind SB 96. However, from a practical standpoint, the facility
needs to be replaced.
API has reached the end of its useful life. The facility contains
sprayed-on asbestos material, which is falling off. In addition,
asbestos-based adhesive was used on tile in the building. The
fire-life-safety and mechanical support systems are worn out and
expensive to maintain. The roof repair will cost in excess of $.5
million. The sprinkler system piping is not seismically braced so
that its fire suppression equipment is vulnerable if an earthquake
were to occur.
API was not designed as a psychiatric hospital. In 1962, it was
paid for by the federal government as a facility that could be
converted into a medical/surgical hospital within 24 hours to treat
military casualties in case of war. The lifespan of most major
facilities is 40 years. Because it is a hospital, it is open 365
days per year, 24 hours per day. The state has recognized, since
1988, that API needs to be replaced. A study was done to determine
whether it made sense to renovate the existing facility; the answer
was no.
The decision to replace API was first supported by the legislature
in the early 1990s when it appropriated $6.1 million over a 3-year
period for design work. After about five years, API went to bid on
a hospital but came up short of funds with which to build because
the facility had been designed and redesigned. The only reason
DHSS did not go forward at that time was the lack of funds. Once
those bids were withdrawn, DHSS embarked on some additional
planning processes: building a replacement API; purchasing a new
facility; or partnering with Providence Hospital to build a joint
facility. The plan to partner with Providence Hospital relied upon
a land swap between the University of Alaska and the Alaska Mental
Health Trust Authority (AMHTA). That was too complex to be
accomplished so Providence withdrew from that consideration in
1998. DHSS then looked at purchasing a replacement hospital and
put out a response for bids, which Charter Hospital responded to.
API spent two years trying to purchase Charter Hospital, but strong
local opposition to planning and zoning considerations made that
option impossible.
DHSS decided that it needs to build the facility that it planned to
build sometime ago. The AMHTA recently announced it will convey
the 80 acre parcel on which API is located to DHSS. This 80 acre
parcel was granted to AMHTA in the land settlement in 1993.
Number 2300
SENATOR WILKEN asked where the University of Alaska is in relation
to the 80 acre parcel.
MR. BURNS said it is across the street to the north. He said the
parcel is already zoned appropriately for a hospital. API has been
located in the area and other hospitals grew up around it, so API
would not be moving into a new neighborhood. API is a teaching
hospital so it will remain convenient to the University and other
hospitals. API is a specialty hospital so being close to
medical/surgical hospitals will allow API patients to get medical
care quickly, when necessary. The University Community Council and
residents are very supportive of the location and the Anchorage
Planning and Zoning Commission recommended that API remain at its
present site.
MR. BURNS said DHSS cannot build a replacement hospital without
additional funding. SB 96 will provide the financing to demolish
the old facility and build a new one. DHSS would build a 54 bed,
expandable to 72 bed, hospital, giving the state the flexibility
necessary to serve the inpatient psychiatric needs that are not met
by local communities. A portion of the old building would be
reused as storage space and a gym. The existing facility is
considered to be a hazardous waste site; SB 96 will cover the cost
of cleaning that parcel.
SENATOR WILKEN asked why it is considered to be a hazardous waste
site.
MR. BURNS said it is because of the asbestos only. The asbestos is
friable and has fallen off of all of the beams and is sitting
throughout the structure. SB 96 will approve $58,750,000 for the
construction. DHSS has $22.2 million, made up of $19.2 million
from the original API 2000 project and $3 million from the AMHTA
for demolition work. The remaining $36.5 million would be raised
through certificates of participation in a lease purchase
agreement.
TAPE 01-16, SIDE B
MR. BURNS said the state's obligation would be $3.7 million per
year for 15 years, after which the state would own the building.
The total cost of constructing a new building will be $48.2
million, demolishment costs will be $9.7 million, phasing will cost
$.5 million and financing will cost $250,000. He discussed the cost
per bed comparison with three other hospitals in Alaska.
SENATOR WARD asked how the API per bed cost compares to the per bed
cost of Providence Hospital's new addition.
MR. BURNS said he did not know the answer to that but DHSS might
have that information.
SENATOR WARD asked if anything would stop DHSS from requesting
proposals for design, build, and operation of this facility.
MR. BURNS said he believes that would require some statutory
changes and would get back to Senator Ward with an answer.
COMMISSIONER PERDUE reminded the committee that API is the only
state psychiatric hospital and she believes no state has privatized
its entire state psychiatric services. DHSS has outsourced some
work to private hospitals in Anchorage and Fairbanks.
SENATOR WARD said he appreciates that, however there are companies
with the ability to operate a facility with fewer than 60 beds. He
pointed out he was contacted as Co-Chair of the Privatization
Commission by some of these companies.
Number 2171
MR. BURNS said replacing API is one aspect of an ongoing three-
pronged effort between DHSS, the AMHTA and the Mental Health Board.
The second prong is to privatize a variety of treatment
alternatives to hospitalization at API. Statutorily, DHSS is
mandated to work on making sure that patients are treated in the
least restrictive environment and as close to home as possible.
DHSS provides services locally, instead of through API, whenever
possible. The third prong is quality of care. API recently scored
98 out of 100 by the Joint Commission in December of last year.
MR. BURNS explained that in Anchorage, API will be using a single
point of entry service, the idea being that any law enforcement
official or family member will know where to bring a person who is
experiencing a mental health crisis. When the person is admitted,
the staff will determine what type of services to refer that person
for. In many parts of the state, inpatient services are
nonexistent. API is the safety net when other services are not
available. In addition, API houses forensic patients and patients
who are not guilty by reason of insanity and it provides competency
evaluations to the courts.
MR. BURNS explained that the new facility will be constructed to
hold 72 beds because until communities have a full range of
services necessary, API will not be able to function at 54 beds.
The current patient capacity fluctuates. API must admit patients
who need services, no matter what other service providers will not.
Number 1955
SENATOR WILKEN asked why they are not planning a facility with more
than 54 beds.
MR. BURNS said in 1994, after three years of planning, DHSS sought
funding from the legislature to plan for a 114 bed, $65 million
facility. DHSS was appropriated $22.8 million and told to build a
72 bed facility. Therefore, DHSS has been working within that
guideline and a 54 bed facility is the long term goal of the mental
health system. The goal is to offer enough services in communities
so that API will be more of a tertiary care facility.
SENATOR WILKEN expressed concern that if the legislature approves
this plan, DHSS will be back before the legislature, just about the
time API opens its doors, asking for another building unless there
is some way to restrain the growth.
MR. BURNS said, regarding the single point of entry, Providence
Hospital is in the business of receiving people who are
experiencing a mental health crisis in Anchorage; 68 percent of
patients are from the Anchorage area. They are referred for other
services from there so, on its face, that will stop some of those
people from coming to API. An important part of this plan is
designated evaluation and treatment, which will reduce API's intake
considerably. He believes that over time, the plan that is being
implemented should result in a reduction in the bed need at API.
SENATOR WILKEN asked if this plan was designed in the early 1990s.
MR. BURNS said the plan was finalized in 1996.
SENATOR WILKEN asked if any redesign of the plan was considered,
given fiscal constraints.
MR. BURNS said it was discussed but the issue is the $19.2 million
in the bank right now. DHSS has worked hard to maintain those
funds and it would be costly to do another redesign.
CHAIRWOMAN GREEN thought DHSS has been constrained by the framework
placed on it by the legislature.
SENATOR WILKEN repeated that it seems strange to build a four-lane
highway that will be full when the ribbon is cut.
MR. BURNS said that is why it will be expandable to 72 beds.
SENATOR WILKEN noted that 72 beds will not be sufficient.
MR. BURNS repeated that DHSS hopes other programs will be on line.
The crisis treatment capacity has been expanded in Anchorage as
well as the de-tox capacity. The hope is that more people can be
kept out of the hospital by referring them to other services.
SENATOR WARD asked if a wing for youth has been incorporated into
the new design for API
MR. BURNS said currently API has 12 beds, the new facility will
have nine.
Number 1723
SENATOR WARD asked if the Alaska Native Hospital is charged when
IHS-eligible patients stay at API.
MR. BURNS said 28 percent of API's residents are Alaska Native and
the cost of their treatment is primarily borne by the state and
with federal Medicaid funds.
SENATOR WARD asked what that percentage is.
MR. BURNS explained that API gets a form of Medicaid named
Disproportionate Share Hospital (DSH) because many of its patients
are indigent. Those funds used to comprise 46 percent of API's
budget. This is the first year the federal government, in the 1997
Budget Reconciliation Act, cut DSH funds to public hospitals
beginning in the federal fiscal year 01. Over three years, those
funds will have been cut by 66 percent.
Number 1648
SENATOR LEMAN said he would like a reconfirmation that the new
facility is not too elaborate for the state's revised vision for
institutional treatment. He also asked whether all options for the
existing building have been explored, such as University ownership.
MR. BURNS said at one point, the University considered using the
facility as a repository for books and storage. The engineers felt
the building wouldn't bear the weight so the University withdrew
its consideration. API is using that facility because it is
grandfathered into it; he does not believe any other public entity
could move into that facility without a substantial clean up of the
asbestos.
SENATOR LEMAN asked if that clean up could cost as much as the
demolition.
MR. BURNS said that is correct. He noted that regarding the
appropriateness of the design to the state's vision, DHSS spent
four years discussing the appropriateness of the design. The
building will be a single story, which is controversial, but it was
designed that way for patient care issues. It is very attractive
and will be very functional.
SENATOR WILKEN expressed concern that DHSS is taking an old effort,
and given some fiscal constraints, and saying that effort will be
adequate for the next 50 years. He asked if it is time to look at
alternatives and, if more money is needed, come up with a proposal
that will not require a revision in five years. He noted the next
committee of referral will be the place to talk about the financial
aspect of this plan.
COMMISSIONER PERDUE said, regarding the question of whether the
facility is large enough, the 1990 census at API was 200 patients.
Psychotropic drugs and other community services have really driven
that number down. DHSS feels confident that it can work with the
bed capacity in the new plan as long as it remains flexible up to
72. Regarding the design, Commissioner Perdue said the facility
will be 98,000 square feet. It has been controversial because it
takes up the entire site. If DHSS could get the assurance that it
will have the money to build, it may be able to take an objective
look at whether it can be built cheaper if redesigned. DHSS does
not want to continue to use the seed money it has for another
redesign. DHSS could look at partnering, if the building is
designed as a multi-story facility.
Number 1366
SENATOR WARD said that he sat in on some of the citizens committee
meetings and pointed out that one of the reasons for designing the
building with a single story is that it provides the best
therapeutic atmosphere for patients.
CHAIRWOMAN GREEN announced the committee would take teleconference
testimony.
MR.SCOTT WHEAT, informed the committee that he has served on the
API governing body for a number of years. Over 10 years of
following this issue, the certificate of participation idea is the
best he has heard for funding. Providing a single point of entry
will allow people to get the proper support they need. The
question of moving the hospital has caused a lot of anxiety among
patients, families and staff. He noted the quality of care and
operations of the hospital are very good. The use of a single
story with a courtyard will provide the most attractive environment
for patient care.
DEPUTY COMMISSIONER WEBB said this is a long standing problem that
needs a solution.
There being no further questions or testimony on the bill,
CHAIRWOMAN GREEN announced she would set the bill aside for now and
the committee would take up SB 112.
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