Legislature(2001 - 2002)

02/28/2001 01:39 PM HES

Audio Topic
* first hearing in first committee of referral
+ 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                                                            
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                                                            
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                                                            
SENATOR  LEMAN asked  if that  clean up  could cost  as much as  the                                                            
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                                                            
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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