Legislature(2011 - 2012)HOUSE FINANCE 519
01/24/2012 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Budget Overview: Department of Health and Social Services | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
January 24, 2012
1:37 p.m.
1:37:04 PM
CALL TO ORDER
Co-Chair Thomas called the House Finance Committee meeting
to order at 1:37 p.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Bryce Edgmon
Representative Les Gara
Representative David Guttenberg
Representative Reggie Joule
Representative Mark Neuman
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
William Streur, Commissioner, Department of Health and
Social Services; Nancy Rolfzen, Assistant Commissioner,
Finance Management Services, Department of Health and
Social Services; Laura Baker, Deputy Director, Finance and
Management Services, Department of Health and Social
Services; Representative Wes Keller; Representative Sharon
Cissna.
SUMMARY
BUDGET OVERVIEW:
Department of Health and Social Services
^BUDGET OVERVIEW: DEPARTMENT OF HEALTH AND SOCIAL SERVICES
1:38:01 PM
WILLIAM STREUR, COMMISSIONER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES (DHSS), presented a PowerPoint presentation
titled "Department of Health and Social Services FY 2013
Budget Overview." He relayed that throughout the
subcommittee process budget detail for the DHSS divisions
would be provided. He introduced department staff.
Commissioner Streur pointed to the department's
organizational chart on slide 2. Kimberly Poppe-Smart was
the deputy commissioner for Medicaid and Health Care
Policy, which included Health Care Services, Alaska Pioneer
Homes, Senior and Disabilities Services, and Behavioral
Health. Ree Sailors was the deputy commissioner for Family,
Community and Integrated Services, which included
Children's Services, Juvenile Justice, and Public
Assistance. Additionally, there were a variety of boards
and workgroups that supported the department.
Commissioner Streur discussed the department's mission to
promote and protect the health and well-being of Alaskans
(slide 3). The department was currently revisiting its
mission to determine what needed to change and how DHSS
could be more reflective. The department's core values
included collaboration and partnerships with tribal
partners, the provider network, and families;
accountability to the legislature, governor, Alaskans, and
recipients; respect of working relationships with all
individuals; empowerment of recipients to care for
themselves, and; safety.
1:42:39 PM
Commissioner Streur highlighted DHSS priorities that had
been defined to fit within the department's mission (slide
4):
· Integrated Health and Wellness
· Health Care Access and Delivery
· Sustainable Long-Term Care Delivery System
· Safe and Responsible Families and Communities
Commissioner Streur discussed major accomplishments under
the category of Integrated Health and Wellness on slide 5.
The Adult Preventative Dental Care program had been
implemented five years earlier and had served 14,821 people
to date. The program continued to grow and had helped
improve recipients' lifestyles by expanding the range of
foods they could eat and the jobs they had access to.
Co-Chair Thomas commented on dental care in the state's
prison system.
Commissioner Streur continued to discuss DHSS
accomplishments on slide 5. The distribution of H1N1
pandemic influenza vaccinations to providers had been very
effective and Alaskans Taking on Childhood Obesity (ATCO)
was a significant program. He emphasized that the current
generation of youth was predicted to be the first group
that would not live as long as its parents had.
Co-Chair Thomas remarked that two dentists in Haines had
proposed adding a $0.05 tax on soft drinks to help with
dental programs and to fight obesity.
Representative Gara wondered whether DHSS was working with
the Department of Education and Early Development (DEED) to
help introduce healthier options for school lunch menus.
Commissioner Streur replied in the affirmative. The
departments were steering away from the single targeted
approach used in the past and were looking at multiple
items together including, the kinds of meals that were
served in schools, recess, exercise, and more.
Representative Gara wondered what the department was doing
to change the quality of foods served in the state's
schools.
Commissioner Streur responded that DHSS provided input to
the schools. The department had expressed concern that the
school system's plan to reduce salt by 40 percent in the
lunch programs would take ten years; however, the process
took time and changes needed to be made gradually in order
to encourage students to continue to eat the food. He had
been frustrated with the slow process, but he understood
the reasoning behind it and would continue to work on
shortening the implementation time if possible.
1:48:31 PM
Representative Costello referenced the successful school
system in Sweden that provided children with 15 minutes of
recess for every 45 minutes of instruction. She wondered
whether the department would communicate recommendations to
DEED for fitness programs in schools.
Commissioner Streur responded in the affirmative. A portion
of the obesity program focused on fitness in schools. He
stressed that the new participation was surprisingly
positive. He emphasized that beginning at an early age was
instrumental in success; DHSS would be at Susitna
Elementary in February to introduce the program.
Representative Joule discussed the abundance of fish and
other local foods that had to undergo a regulatory process
through the United States Department of Agriculture. Work
was underway at the Department of Environmental
Conservation to clear the way for use of local foods, which
would also help to stimulate the economy in areas of
Alaska. Communication between the multiple departments
involved was important in order for progress to be made.
Representative Neuman asked what influence DHSS had to
encourage other departments to purchase local products. He
pointed out that produce purchased from out-of-state (for
the correctional system, schools, and other) lacked
nutritional value; other items such as fish, milk, and
cheese also came from out-of-state.
Commissioner Streur replied that DHSS had little influence
on the matter. The department was able to provide input and
advice, but he believed DHSS could improve its
communication with other departments on the issue. The
department had significant expertise and was becoming more
involved in environmental areas such as mining; however, it
was not as involved in food.
1:53:19 PM
Commissioner Streur continued with health care access and
delivery accomplishments (slide 6). He was optimistic about
past and present work conducted by the Medicaid Task Force.
He hoped to have four patient-centered medical home pilot
programs underway with the potential for more depending on
their success. He pointed to the medical home concept
national trends that indicated Alaska's Medicaid recipients
could benefit from the program. An increasing amount of
funding available to governments was spent on health care;
the overall cost of health care in the U.S. had set a new
record of over $3 trillion in the past year.
Commissioner Streur discussed the effective use of generic
and formula drugs and noted that the state had three
different schemes related to the issue (slide 6). There was
a very generous formulary in the state and DHSS worked well
with the provider system to ensure that the right drugs
were available to individuals at the appropriate time. The
department was working to change the decline in the
effective use of generic prescription drugs, given that it
would immediately help to reduce health care costs in the
state. The involvement of physicians and other primary care
and specialty providers would help ensure that
effectiveness for efficiency would not be sacrificed. He
briefly addressed the Community First Choice program
available under the Division of Senior and Disability
Services.
Representative Doogan wondered what the phrase "effective
use of generic and formula drugs" meant in practice. He
asked how generic drugs were guaranteed to perform as well
as name brand drugs.
Commissioner Streur answered that DHSS was not responsible
for determining the effectiveness of generic drugs; the
decision was made by the Federal Drug Administration (FDA).
The department did look at generic drugs to determine
whether they were a suitable substitute. He explained that
the state's pharmacists and physicians looked at situations
in which some generic drugs contained fillers that did not
work well for some people. Prescriptions were normally
filled with a generic drug unless a provider instructed
that the prescription should be "dispensed as written."
Representative Doogan felt that the answer was not
satisfactory. He referred to a personal experience in which
generic drugs prescribed by a physician had not been
successful. He wondered how the department ensured that
money given to pharmacies to prescribe medications resulted
in successful treatment.
Commissioner Streur responded that the determination was
made by physicians and not the pharmacies; drugs used were
approved by the FDA. He furthered that the same drug did
not always work for different people. He recognized that
although he had experienced success with generic
prescriptions that others may not have the same experience.
The process was still a practice of medicine and was not
completely refined. He expounded that it was up to the
physician and provider to ensure that an ineffective drug
was changed. He offered to arrange a meeting with the
department's pharmacist to discuss the issue further.
Representative Doogan looked forward to the meeting.
1:59:09 PM
Representative Guttenberg was familiar with problems
related to generic drugs. He had been told that formularies
throughout the state had trouble getting custom
prescriptions covered by insurance. He asked whether the
commissioner was aware of the problem and if it had been
remedied.
Commissioner Streur responded in the affirmative. He had
managed a health plan in the past and the formularies had
been more restrictive; it had been based on where the best
rebates, discounts, and demand for a particular drug.
Currently there were an increasing number of unique
prescriptions and pharmacies would not stock them if they
only came up once per month. He communicated that new drugs
were slow to end up in formularies because they were more
expensive, on-patent, and generally 60 percent to 80
percent more expensive than a generic or older drug;
because health plans did not want to pay for the more
expensive prescriptions they did not put them on the
formulary. Pharmacies were supposed to have suitable
substitutes, but frequently this did not happen. The
department was not involved in health insurance outside of
Medicaid and had a generous formulary that had been
thoroughly vetted. The department had a pharmacy and
therapeutics committee that met on a regular basis to
review and update the formulary with new and unique drugs
as needed.
Representative Gara asked whether the policy was to
prescribe a generic drug unless a physician specified a
name brand. He understood that name brand prescriptions
were needed in some cases and also wanted the department to
be able to save as much money as was reasonable.
Commissioner Streur responded in the affirmative.
Representative Gara wondered whether there was a way to
monitor when a name brand drug was prescribed
inappropriately. He discussed the influence that major
companies could have over physicians and their decision to
prescribe name brand medications.
2:04:05 PM
Commissioner Streur replied in the affirmative. The
department looked at prescribing patterns on a monthly
basis. Additionally, there was a drug utilization review
committee that looked at outliers.
Representative Gara asked for clarification that the
outliers referenced were the physicians. Commissioner
Streur responded in the affirmative.
Co-Chair Thomas referred past testimony of Dr. Doolittle
from the Alaska Psychiatric Institute who had been
concerned that generic psychiatric drugs were not
appropriate for patients due to the length of time they
took to be effective. He hoped DHSS would not use generic
drugs to treat psychiatric needs.
Commissioner Streur was aware of the concern related to
antipsychotic and psychotropic drugs. The topic had been
discussed by the Medicaid Task Force. He relayed that much
of Dr. Doolittle's testimony had been correct, but much
better drugs were beginning to be available in the area due
to continued improvements.
Co-Chair Thomas believed that once a prescription was
working for a psychiatric patient it was important to not
change the medication.
2:06:22 PM
Commissioner Streur highlighted that there were many people
involved in the sustainable long-term care delivery system
(slide 7). The nation's senior population had grown by 14
percent in the past 10 years; whereas, Alaska's senior
population had grown by 70 percent. The veteran and senior
wait list continued to grow for the state's pioneer homes.
The state maintained status quo, but it may look at an
improved way to provide pioneer home care and ensure that
the resource was available to seniors. He communicated that
30,000 recipients had been served through senior and
disabilities services programs and that the number would
continue to grow. He addressed partnering with Native
organizations for nursing home care. There was a new 18-bed
nursing home facility in Kotzebue; efforts were also
underway in Bethel, Nome, and other locations in the
future. He emphasized that success would not occur without
the partnerships with Native and tribal health providers.
Representative Guttenberg had heard that in the past,
prescription drug costs increased for veterans when they
were admitted to the state's pioneer homes. He understood
that "pooling" was one of the best ways to decrease costs,
which was utilized by both Native organizations and
pioneers homes. He wondered whether it was possible to
create pools for seniors and state employees to reduce
prescription costs.
Commissioner Streur deferred the question to the Department
of Administration. He added that an effort was underway;
there was a large population that included Medicaid,
retirees, workman's compensation, and correctional
facilities recipients. He explained that the number was
substantial and questioned the state's ability to leverage
its buying power, capabilities, and services for
recipients.
Representative Edgmon thanked DHSS for providing resources
to the assisted living facility in Dillingham. He had been
reminded at a recent leadership seminar that the challenge
related to the Alaska's growing senior population would
continue to increase. He hoped the issues were prioritized
in the DHSS ten-year plan.
Co-Chair Thomas discussed that Haines had saved general
fund allocations to pay for an assisted living complex. The
city was working on a 12 to 14 bed veterans home that would
be located next to the assisted living facility. Saint
Vincent de Paul had been instrumental in helping to
assemble the program. Prior to the creation of the assisted
living facility people had to leave Haines to live at a
pioneers home in another location.
2:12:18 PM
Representative Joule pointed to private care facilities
that had been established to meet the growing need; he had
been surprised at the large number of available facilities
in Anchorage.
Commissioner Streur addressed safe and responsible families
and communities (slide 8). The establishment of systems to
ensure the safety and protection of the state's children
was critical. He discussed the continued support of the
Child Advocacy Centers and the importance of the
relationship between the centers and the Office of
Children's Services. He mentioned the Child Welfare system
and Family to Family program. A Families First Initiative
had been started with a core group of 46 families under the
Division of Public Assistance to provide a "one-stop shop"
for available services. He emphasized that public
assistance was not helpful if a child did not have access
to food or health care. He was working to establish a
families-first focus within the department; he believed
that although the road forward would be challenging, it
would be more effective and cost efficient in the future.
There were currently 133 children in out-of-state care and
the Bring the Kids Home program worked to enable them to
return safely to their communities. He expressed his hope
to be able to change the program to "Keep the Kids Home."
Commissioner Streur continued to discuss additional safe
and responsible families and communities programs (slide
9). He discussed juvenile justice and the Alaska Native
Recidivism Committee; there were a disproportionate number
of Native youths in the juvenile justice system compared to
the overall population. The department worked to ensure
that there was a full array of behavioral health services
for juveniles within detention and treatment facilities.
Commissioner Streur pointed to heating assistance grants on
slide 9. The department was working to catch up on the
grants due to a computer system problem that had been
resolved; there had been zero individuals on the waiting
list for the past 45 days. During the 2010 to 2011 heating
season there had been over 14,500 people served, which
equated to $15 million in payouts; 5,816 households had
been approved for the current year, which totaled
approximately $6 million in grants. He emphasized that the
program provided significant assistance.
2:17:39 PM
Representative Joule explained that a situation in Noatak
had been averted when community members had taken snow
machines to pick up fuel for the community in temperatures
of 40 to 50 degrees below zero. He was concerned that the
Low Income Home Energy Assistance Program (LIHEAP) was cash
only; the program would have been no help if Noatak had
completely run out of fuel because there would have been no
fuel to purchase. He hoped a solution could be reached
through work with a tribe or organization in order to
assure people that the payments were there.
Commissioner Streur moved on to home and community-based
senior disability services (slide 9). He shared that the
committee would hear a significant amount of information on
the program at a later time.
Representative Doogan wondered about solutions for handling
kid-on-kid sexual assault. He thanked the division
directors for taking his concerns seriously the prior year
and looked forward to hearing their reports. Commissioner
Streur appreciated the remarks.
2:20:59 PM
Commissioner Streur explained that Medicaid was the
department's greatest challenge (slide 10). A chart on the
slide illustrated that the current Medicaid costs were
approximately $1.5 billion and $5 billion in 2030.
According to the Pew Research Center "boomers started
turning 65 last year and every day for the next 18 years
about 10,000 per day nationally will hit that age." He
relayed that historically age had been associated with
retirement and the Medicare rolls. He read a statement from
an economist:
At the consumer level it may squeeze out other
discretionary spending. At the government level,
rising Medicaid and Medicare spending will inevitably
put pressure on other government spending priorities.
At the business level, could curtail investment or
more likely suppress wages. Medical payments now
account for about 16 percent of total consumer
spending. More than food or clothing combined, which
makes up about 11 percent, or housing, which makes up
about 15 percent. The rising costs of health care
means it will consume and even bigger share of the
world's largest economy as the population ages.
Commissioner Streur noted that medical payments had
increased and currently accounted for 18 percent of
consumer spending. He stressed that finding a solution to
improve quality and access while reducing Medicaid costs
was a challenge and could involve risk. He explained that
the department would work to "bend the curve" or slow down
the inflation rate, but costs would not be reduced.
Representative Guttenberg was troubled by the chart that
depicted the rising costs of Medicaid (slide 10). He
wondered whether the projected number of participants in
the program would show the same curve upwards and cost per
participant.
Commissioner Streur replied that the Medicaid chart showed
the same population. There was a small amount of
incremental growth built into the chart; for example,
Medicaid expansion was due to occur through the Affordable
Care Act on January 1, 2014 when an additional 30,000 to
35,000 individuals would become eligible for Medicaid.
Medicaid coverage for individuals would move from 100
percent of poverty level to 138 percent of poverty level;
currently the coverage reached a limited number of people
and included very few males and non-family households. He
projected that Alaska's Medicaid costs would grow upwards
of 30 percent.
Representative Guttenberg asked for verification that the
chart showed the same number of participants in each age
group and that the cost of delivery was ever increasing.
Commissioner Streur answered in the affirmative.
Representative Guttenberg thought it would be helpful to
determine how to deliver the same high-level of care at an
affordable rate. He hoped to hear about positive measures
taken related to the issue. Commissioner Streur agreed.
2:26:10 PM
Representative Doogan wondered whether DHSS had experienced
cost-shifting from the federal government to the state. He
pointed to the start of a cost-shifting trend that had
impacted other agencies.
Commissioner Streur responded that cost-shifting had not
been very prevalent in Alaska. The majority of shifts had
been in funding formularies and had been subtle. He
expressed concern that the federal government would pay for
the cost of care for additional patients under the
expansion of Medicaid, but not for the development of
infrastructure (e.g. staff, computer systems, etc.) that
would be required with the 30 percent growth. The state
would be largely responsible for at least 50 percent of the
cost. The federal government would pay for 100 percent the
cost of care through 2016, 95 percent in 2017, and 90
percent in 2019.
Commissioner Streur focused on strategies that dealt with
department challenges (slide 11). He believed in the
integration of services and that all participants needed to
be involved in the development of solutions. He stressed
the importance of maximizing resources for effective
service delivery. The third strategy involved the promotion
of rural infrastructure development and standardization of
regional structure. Care delivered in a rural community was
approximately half the cost of transporting a patient to an
urban location. He emphasized that all partners including
tribal organizations, physicians, nurses, and other needed
to be involved in a full continuum of care from the "womb
to tomb."
Commissioner Streur continued to list strategies for
department challenges (slide 11). Fourth, DHSS needed to
promote accountability at all levels of the organization
including work with recipients of services, pharmacies,
providers, legislators, and other. The fifth strategy aimed
at leveraging technology in strategic ways to accomplish
the department's goals. There were federal funding
opportunities that offered technology opportunities for the
state; the department continued to develop the Medicaid
Management Information System. Additionally, he hoped to
establish a master client index that would allow the
department to provide enhanced coordinated care to its
recipients.
Commissioner Streur continued to discuss strategies for
challenges faced by the department (slide 12). He
communicated that the promotion and response to overall
health and wellness of Alaskans continued to evolve. The
budget included items for the Kenaitze Indian Tribe in
Kenai and the Copper River Native Association to develop
resources in their communities; the items represented
opportunities, given that the federal government would pay
for 20 years of approximately 100 health care providers for
the Kenai tribe and 60 health care providers in Copper
Center. He explained that the state was responsible for
paying for the each building. He added that there needed to
be a focus on prevention as well. Other strategies included
system development improvements across the board,
partnerships with all groups involved related to ideas and
solutions moving forward, and recruitment and retention of
qualified employees, which had been the department's
biggest challenge.
2:32:05 PM
Commissioner Streur relayed that the department needed to
continue to address key performance indicators given that
its report card was not very good (slides 13 and 14). The
department was focused on reducing items such as suicide,
tuberculosis, and overweight and obesity problems. The
department was working to fight the prevalence of teenage
tobacco use that was on the rise. He mentioned the DHSS
vaccination program.
Representative Gara discussed that the federal health care
legislation had a provision that enabled parents to include
their children on their health insurance until the age of
26; Alaska had been the only state to opt out of the
provision that had also extended the program to retired
state employees. He pointed to the department's goal to
provide insurance to at least 95 percent of children and
wondered whether the department would support belatedly
joining the program if it was possible.
Commissioner Streur responded that the current coverage
allowed for by the department's indicator included children
from the age of zero through 18. He relayed that the
decision to support or oppose the federal health program
fell under the purview of the Department of Administration.
2:36:00 PM
Representative Guttenberg asked whether Commissioner Streur
was aware that there was no child-only insurance available.
Commissioner Streur replied in the negative. Representative
Guttenberg would follow up on the question at a later time.
Commissioner Streur communicated that continuous health
insurance coverage was an issue (slide 14). He pointed to
the Denali KidCare expansion scheduled to occur in the
upcoming year; enrollment had increased and another bonus
had been received due to performance in the area. He
believed that state and federal efforts towards Medicaid
expansion would provide coverage for more individuals. He
discussed that the vaccination program had suffered in the
past year when the federal government had reduced funding.
The FY 13 budget included an increment of $700,000 that
would implement parts of the vaccination program. He
believed the Senate had introduced a bill that would fully
fund the program; he noted it would be money well spent.
2:38:08 PM
Co-Chair Thomas wondered what would happen to federally
funded state programs if the federal government made
funding commitments that it retracted at a later date. He
referred to earlier testimony about the 20 year commitment
the federal government had made to the Kenaitze Indian
Tribe and Copper River Native Association. He made a remark
about the belief that funds should be backfilled for every
American Recovery and Reinvestment Act (ARRA) program the
state had spent money on. He asked the department to follow
up on the questions later.
Commissioner Streur shared that the target to reduce the
rate of alcohol-induced deaths had not been met (slide 15).
Alcohol continued to be the single greatest epidemic in the
state; there was a direct or notably indirect correlation
between alcohol and many of the current social issues.
2:39:45 PM
Representative Joule questioned why more recent data than
2002 and 2003 had not been used in relation to Fetal
Alcohol Spectrum Disorder (FASD) statistics (slide 14).
Commissioner Streur replied that it frequently took seven
to ten years to obtain reliable data on the prevalence of
FASD. He expressed concern that the trend may not have been
reversed and that efforts to fight the issue needed to be
doubled; more and more children had been diagnosed in
Alaska.
Commissioner Streur touched on efforts to address substance
abuse in Alaska (slide 15) and to reduce the rate of
uninsured Alaskans (slide 16). He believed the licensed
health care provider objective needed to be broadened
because much of the focus had been on physicians; there
were many other providers who were able to fill the gaps in
care.
2:42:19 PM
Representative Neuman asked whether there had been a
notable change in health care providers, given the
increased funding dedicated to the area. He wondered
whether study targets had been met.
Commissioner Streur believed that it had improved, but the
information was largely anecdotal. He would meet with WWAMI
[Washington, Wyoming, Alaska, Montana, Idaho Medical
program] and others to obtain more information.
Co-Chair Stoltze noted the aging of Alaskan physicians and
asked whether there were concerns with the age
demographics. Commissioner Streur responded in the
affirmative. There was a significant aging of the
psychiatrist and primary-care and internal medicine
physician population.
2:44:32 PM
Commissioner Streur discussed the target to reduce the
medication error rate in pioneer homes had been successful
(slide 17). There had been significant progress made in
pioneer home facilities. Substantial progress had also been
made towards the reduction in the number of falls that
resulted in major injury; DHSS continued to pursue the 0
percent target rate.
Vice-chair Fairclough pointed to a Canadian study that had
provided increased dosages of vitamin D to assisted living
residents to improve bone health and decrease injuries from
falls; the program had led to a mandated dosage of vitamin
D for long-term care residents. She wondered whether the
state was considering a similar program.
Commissioner Streur replied that there had been continued
discussion on the issue between the Division of Public
Health director and Representative Paul Seaton.
2:46:32 PM
Commissioner Streur communicated that the target to reduce
incidents of domestic violence had not been met, but
efforts to decrease the rate of child abuse had been
successful (slide 18).
Representative Gara queried what the department could do to
reduce the rate of child abuse and neglect. Commissioner
Streur emphasized that DHSS needed to continue to work with
families, to intervene with families earlier, and to
identify potential for abuse.
Representative Gara queried whether DHSS had a funding
increment to prioritize substance abuse treatment to aid in
the reduction of child abuse. Commissioner Streur did not
know whether DHSS had additional increments, but it was
constantly evaluating existing increments given that a
significant amount of money was spent on treatment for a
limited number of people. The department needed to continue
to evaluate whether the treatment was as effective as
possible and whether recipients needed to be prioritized.
Representative Joule observed that the overview included
approximately 16 targets that had not been met. He believed
the responsibility of fixing people had fallen to the
government and wondered whether individuals needed to
accept more personal responsibility in order for a shift to
take place. He recognized the challenges and believed a
change in the way business was done was necessary.
2:50:44 PM
Vice-chair Fairclough clarified that the committee was
discussing a key performance indicator that showed the rate
of domestic violence was up 25 percent over the previous
year and 10,657 incidents had been reported (slide 18). She
informed the committee that several pilot prevention
programs were in their second year related to domestic
violence; as pilot programs were established in communities
it was anticipated that the incident rates would rise. She
believed that while the increase was awful, there was also
an indication of an opportunity to heal. She guessed that
there would be five years of increase before prevention
tactics started to become evident. She hoped that an
increase would be seen in pilot communities such as
Dillingham and Bethel, but that only slight increases would
be observed in other communities. She added that currently
people may be reporting more often than in the past.
Representative Neuman emphasized that approximately 22
percent of child abuse cases were reported. He believed
the number could be multiplied three or four times and
included 30,000 to 40,000 Alaskans. He stressed that the
reporting rate needed to be improved.
Representative Doogan asked for detail on what comprised an
alcohol induced death (slide 15).
Commissioner Streur explained that an alcohol induced death
related to various items including, motor vehicle
accidents, accidental shootings, snow mobile accidents, and
many others; the term included situations in which alcohol
was the cause or a contributing factor of a death.
2:54:26 PM
Co-Chair Stoltze referred to the Karluk Manor in Anchorage
and wondered whether the state would be implicated in an
alcohol induced death if it occurred at the facility.
Commissioner Streur responded in the affirmative.
Co-Chair Thomas remarked that some recent cases had
involved diabetics who drank too much and went into a
diabetic coma.
2:55:28 PM
NANCY ROLFZEN, ASSISTANT COMMISSIONER, FINANCE MANAGEMENT
SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, offered
to provide a written summary on FY 12 budget updates
(slides 19 and 20) in the next several days.
LAURA BAKER, DEPUTY DIRECTOR, FINANCE AND MANAGEMENT
SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES,
directed attention to a chart showing a ten-year operating
budget expenditure comparison by various categories
including, formula, grants, program services,
administration, and facilities (slide 21). The total budget
had increased from $1.5 billion in FY 03 to $2.6 billion in
FY 13. The actual percentage in the categories had stayed
fairly steady, with the exception of the formula that had
increased due to national trends and the expanding senior
population. The pie chart on slide 22 represented the total
FY 13 funds and illustrated that formula programs made up
the majority of the budget at 72 percent. Some of the other
segments had gone down slightly, but remained relatively
consistent with past years. She added as formula programs
and Medicaid increased other programs began to shrink.
Slide 23 showed the FY 13 operating budget general fund
request, which was consistent with the prior slide.
Co-Chair Stoltze surmised that the only way to contain DHSS
budget costs was to restrain entitlement formula increases.
He wondered whether there was any other way to curtail the
budget's rate of growth.
Commissioner Streur believed there were several ways to
address the problem including, reducing eligibility.
Co-Chair Stoltze clarified that reducing eligibility would
involve a change to the entitlement formula. Commissioner
Streur agreed. Other ways to slow the rate of growth
included a reduction of services or reduction of payment
for services.
Co-Chair Stoltze noted that all of the solutions listed
involved restructuring of the existing entitlement. He
asked whether all other measures would be dealt with as
policy measures.
Commissioner Streur responded that a reduction in services
involved making certain the continued services were
appropriate for individuals. He elaborated that the
reduction would involve more gatekeeping or some form of
managed care. He believed that the patient centered medical
home was a gentle form of managed care; patients were
managed and cared for by a primary care provider. He added
that there were substantial savings without changing the
formulary.
Co-Chair Stoltze did not believe many formulas would be
decreased.
2:59:32 PM
Vice-chair Fairclough discussed grants that allowed
volunteer hospices and other to divert people from
accessing Medicaid services. She elaborated that volunteer
hospices would not have to provide funds to the Medicaid
system if they were given a grant. Currently under some
grants people were required to be Medicare providers and to
bill for services in order to qualify. Volunteer hospices
chose not to bill and to focus on their primary mission to
be with people who may be facing devastating illness. She
thought it was interesting that there were grants that only
allowed Medicaid service billers to qualify because it
increased the state's responsibility for Medicaid costs.
She stressed that there were ways to help people remain in
their homes without asking for matching Medicaid.
Ms. Baker pointed to a bar graph that showed how formula
and non-formula programs had progressed over a ten-year
period (slide 24). Formula programs had been steady between
FY 08 through FY 10 and had been influenced by public
assistance back to work programs. Currently and into the
future there was a trend of fund source issues and an
increased number of public assistance caseloads. She
mentioned anomalies in Medicaid and the growth factor.
Slide 25 showed that Medicaid represented 80 percent of the
total DHSS formula programs; public assistance made up 18
percent and children's services (foster care and subsidized
adoption programs) represented 2 percent.
Commissioner Streur added that in 2014 Medicaid would
increase substantially due to an additional 30,000
recipients. The effect was unknown because DHSS did not
know how many people in the 100 percent to 138 percent of
poverty level were currently on grant programs or receiving
health care services from other areas that would become
Medicaid eligible and drive the percentage up
significantly.
3:03:54 PM
Co-Chair Thomas referenced a recent national seminar where
other states had discussed lowering budgets by lowering the
poverty level in their programs.
Representative Gara discussed a bar chart that showed a 77
percent spending increase over a ten-year period (slide 24)
year over year. He believed the increase was primarily due
to inflation and population growth.
Commissioner Streur responded in the negative. He explained
that on a per enrollee basis the cost was going up
substantially. The average annual Medicaid expenditure two
years earlier had been $9,300 per person (the annual
benefit for a family of four had been $37,200); whereas,
statewide the average commercial insurance cost was $5,300
per person. The number continued to climb annually and was
significant on a per basis adjusted for population and
inflation.
Representative Gara wondered why Alaska's medical costs
were so expensive and continued to rise.
Commissioner Streur replied that the Health Care Commission
had been looking at reasons for the cost of health care in
Alaska for the prior six months and had been highly
controversial. He did not believe there had been any
conclusions on why costs in Alaska were higher; the issue
needed continued discussion and development. He opined that
providers needed to be included in discussions because
state government would not able to enforce solutions.
3:07:11 PM
Ms. Baker pointed to slide 26, which compared the FY 13
proposed budget with FY 12. The budget included
approximately $1.3 billion in general funds (unrestricted
and designated), $1.2 billion in federal funds, and $101
million in other funds. Slide 27 showed priority areas for
the FY 13 budget. The general fund increment for the year
was $65,208,400; of the total amount the Medicaid program
growth was $46 million. The non-Medicaid priorities
included $4 million for integrated health and wellness,
$265,000 for health care access and delivery, $1,042,000
for sustainable long-term care delivery, and $13,852,800
for safe and responsible families and communities.
Ms. Baker pointed out that Medicaid growth would be
included in various areas (shown at the top of slide 28).
She highlighted various areas of growth (the list was not
all inclusive):
· Integrated health and wellness Medicaid growth totaled
$53.3 million
· Maintaining local control of essential public health
services by stabilizing funding to public health
nursing grantees totaled $1.1 million
· Immunization for children and seniors totaled $700,000
· Substance abuse treatment for un-resourced individuals
totaled $450,000
· Family Wellness Warriors Initiative, multidisciplinary
rural community pilot project and trauma informed
training as parts of the Governor's focus on domestic
violence totaled $1.8 million
· Behavioral health follow-up survey totaled $75,000
· Disability justice focus group recommendation for pre-
development for sleep off alternatives in targeted
communities totaled $100,000
· Tele-health strategic capacity expansion totaled
$100,000 and would allow a provider network for a
demonstration project related to home-based treatment
3:10:43 PM
Representative Doogan wondered what had caused the increase
in Medicaid in FY 13 (slide 28). Ms. Baker would follow up
on the question later in the presentation.
Ms. Baker highlighted health care access and delivery items
on slide 29:
· Increased support for the Supporting Health-care
Access through Loan Repayment (SHARP)program
· Continuation funding for the Comprehensive Integrated
Mental Health Plan
Ms. Baker addressed the sustainable long-term care delivery
system on slide 30:
· Rate setting and acuity measurement home health rate
setting totaled $640,000 and applied to behavioral
health outpatient rate setting, home and community
based services, and tribal, dental, and behavioral
health settlement calculations
· Medicaid growth
· Adult protective services and provider quality
assurance split between long-term care and vulnerable
Alaskans. Funding would also help DHSS comply with the
centers for Medicaid and Medicare services
requirements and safety
Ms. Baker directed attention to slide 31 related to safe
and responsible families and communities:
· Additional funds for juvenile justice added two
positions in each location to increase safety and to
cover grave shifts at McLaughlin and Johnson Youth
Centers
· Increasing Adult Public Assistance funding due a 4
percent increase in recipients and an anticipated
annual enrollment growth of 5 percent
· Medicaid growth
· Support for school based suicide prevention in the
amount of $450,000; grants would be provided to school
districts to implement evidence and research training
intervention
· Bring the Kids Home efforts and Keeping Kids here
included funding from a variety of areas within the
Behavioral Health Division
Ms. Baker discussed Medicaid services beneficiaries and
expenditures on slide 32. Medicaid contingency language
addressed that the replacement of the enhanced Federal
Medicaid Assistance Program (FMAP) rate and the state's
match rate would be dependent on federal action. The
program's overall growth increment was 6 to 7 percent and
state spending increases would be approximately 8 percent.
She highlighted the behavioral health Medicaid expected
growth increases in the amount of $27.6 million or a 13.6
percent cost from FY 12; both enrollment and utilization
contributed to the increase.
3:15:04 PM
Ms. Baker continued with slide 32. There was a projected
growth of 17.2 percent in adult preventative dental. The
health care services growth was $53.3 million or 5.9
percent due to enrollment growth in utilization and rate
increases.
Representative Neuman asked what caused the dip and
increase in beneficiaries and expenditures on slide 32.
Commissioner Streur explained that the increases and
decreases were largely related to the economy. The
department's numbers had followed the recession by a couple
of years and had been increasing. The average number of
beneficiaries was increasing substantially and the number
of people remaining in the system had gone up
significantly; the average monthly enrollment had increased
20 percent over two years and overall enrollment had
increased by 13 percent.
Representative Neuman commented on the correlation between
the increases and the state's economy.
Representative Gara questioned the correlation between the
increases and the economy because the state's unemployment
figures had remained similar to what they had been in past
years.
Commissioner Streur responded that the number was more
closely related to the value of the employment rather than
employment in general; there could be more residents with
lower paying jobs currently. A higher number of people were
becoming Medicaid eligible; he did not know whether the
increase was partially due to a loss of health care
coverage by employed individuals. He noted that the reason
was probably something the department should look at.
Co-Chair Thomas thought it would be helpful to have a
meeting dedicated to the Medicaid discussion.
Ms. Baker relayed that the senior and disabilities services
Medicaid growth was $46 million, which represented a
projected growth of 9 percent related to enrollment,
utilization, and rate increase. Slide 33 showed how direct
service expenditures spread across each Medicaid program
and division for FY 11.
3:19:17 PM
Ms. Rolfzen discussed public assistance programs on slides
34 through 36. The dips in 2007 and 2008 and increases in
2009 through 2011 reflected on slide 32 were also present
on slides 34 through 36. The Alaska Temporary Assistance
and Native Family Assistance programs served about 4,600
families in 2008 and 5,700 by 2011; the program had
experienced a 12.6 percent growth between FY 10 and FY 11
(slide 34). The Adult Public Assistance program and Food
Stamp caseload came close to equalization between lower
earlier years and increases in FY 10 and FY 11. She noted
that the Food Stamp program had been renamed to the
Supplemental Nutritional Assistance Program.
Ms. Rolfzen pointed slide 37 related to the capital budget
requests:
· $10 million for phase 1 of the Bethel Youth Facility
expansion.
· $4 million for phase 2 of the International
Classification of Disease for Version 10 (ICD-10)
mandated updates
· $450,000 for the purchase of code blue emergency
equipment
· $475,000 for equipment grants to agencies for services
to Mental Health Trust beneficiaries
· $425,000 for the use of aging and disability centers
to guide individuals to more appropriate care settings
· $750,000 for housing modifications that allow
individuals with disabilities to remain in their homes
Representative Doogan asked for detail on the International
Classification of Disease Version 10 phase 2 updates (slide
37). Commissioner Streur explained that ICD-10 was the
international code book for billing health care services;
version 10 included a voluminous number of codes to allow
for accurate billing.
Representative Doogan wondered why the updates would cost
$900,000. Commissioner Streur responded that the request
included an upgrade to the appropriate computer systems
statewide; 90 percent of the costs were federally funded.
Representative Doogan opined that the state was spending a
significant amount of money on all of the items the federal
government wanted.
3:23:29 PM
Ms. Baker moved to slide 38 related to the DHSS ten-year
operating budget plan. Funds for FY 13 totaled $2.6 billion
and total projected funds for FY 22 were $6.6 billion;
using the base-line only the budget would increase to
approximately $4 billion. She pointed to several factors
that were not currently known including, the full
implication of the federal health care initiative, tighter
federal and state budgets, and broad economic problems
(e.g. financial markets, energy costs, mortgage defaults,
and medical inflation). Other operating budget factors
included Medicaid population and medical inflation, public
assistance inflation, and population growth in age groups
in the 20 to 34 years and 65 years and above.
Ms. Baker concluded the presentation with the DHSS ten-year
capital project plan on slide 39:
· Juvenile Justice facilities multi-year plan (e.g. a
design and construction of an expansion in Fairbanks
and the Bethel Youth Facility phase 2)
· Public Assistance Eligibility Information System (in
FY 14, FY 17, and FY 19)
· Alaska Pioneer Homes and Juvenile Justice annual long-
term plans
Representative Neuman remarked that most helpful way to
reduce the costs for DHSS was to create more family
sustaining jobs.
Co-Chair Stoltze was looking forward to the presentation on
the Alaska Mental Health Trust Authority. He discussed the
trust's responsibility to beneficiaries and opportunities
in natural gas development and mining that helped to fill
the gap of some of the needs. He stressed the importance of
providing resources for beneficiaries with Downs Syndrome,
autism, and Fetal Alcohol Syndrome. He emphasized putting
Alaskans to work.
3:28:46 PM
Co-Chair Thomas believed that people providing counseling
in his district were opposed to resource development jobs.
He asked the department to send out an explanation of the
acronyms on pages 19 and 20. He expressed that at the
current rate of growth was not sustainable and would create
a deficit.
Representative Doogan noted that he had studied the growth
rates in the budget for the past ten years. He relayed that
the budget had grown 10 percent per year and that it was
currently double what it had been ten years earlier. He
recognized that the department was not responsible, but he
was concerned that "what goes up must come down." He
discussed the importance of keeping the budget down.
Co-Chair Thomas agreed. He noted that the various federal
funds the state was responsible for replacing were adding
up.
ADJOURNMENT
The meeting was adjourned at 3:32 PM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HFIN-DHSS BUDGET OVERVIEW-012412pdf.pdf |
HFIN 1/24/2012 1:30:00 PM |