Legislature(2013 - 2014)CAPITOL 106
03/20/2014 03:00 PM House HEALTH & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| HB324 | |
| HB319 | |
| HB356 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 319 | TELECONFERENCED | |
| *+ | HB 356 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 324 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE
March 20, 2014
3:05 p.m.
MEMBERS PRESENT
Representative Wes Keller, Vice Chair
Representative Benjamin Nageak
Representative Lance Pruitt
Representative Lora Reinbold
Representative Paul Seaton
Representative Geran Tarr
MEMBERS ABSENT
Representative Pete Higgins, Chair
COMMITTEE CALENDAR
HOUSE BILL NO. 324
"An Act relating to the controlled substance prescription
database."
- MOVED CSHB 324(HSS) OUT OF COMMITTEE
HOUSE BILL NO. 319
"An Act relating to wholesale drug or device distributors;
relating to prescription benefits under the state health
insurance plan; and providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 356
"An Act establishing the Advisory Committee on Wellness; and
relating to the administration of state group health insurance
policies."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 324
SHORT TITLE: CONTROLLED SUBST. PRESCRIPTION DATABASE
SPONSOR(s): REPRESENTATIVE(s) KELLER
02/21/14 (H) READ THE FIRST TIME - REFERRALS
02/21/14 (H) HSS, FIN
03/04/14 (H) HSS AT 3:00 PM CAPITOL 106
03/04/14 (H) Heard & Held
03/04/14 (H) MINUTE(HSS)
03/18/14 (H) HSS AT 3:00 PM CAPITOL 106
03/18/14 (H) Heard & Held
03/18/14 (H) MINUTE(HSS)
03/20/14 (H) HSS AT 3:00 PM CAPITOL 106
BILL: HB 319
SHORT TITLE: DRUG/DEVICE DISTRIBUTORS; COMPOUNDED RX
SPONSOR(s): REPRESENTATIVE(s) T.WILSON
02/21/14 (H) READ THE FIRST TIME - REFERRALS
02/21/14 (H) HSS, L&C
03/20/14 (H) HSS AT 3:00 PM CAPITOL 106
BILL: HB 356
SHORT TITLE: ADVISORY COMMITTEE ON WELLNESS
SPONSOR(s): REPRESENTATIVE(s) SEATON
02/26/14 (H) READ THE FIRST TIME - REFERRALS
02/26/14 (H) HSS, STA
03/20/14 (H) HSS AT 3:00 PM CAPITOL 106
WITNESS REGISTER
JIM POUND, Staff
Representative Wes Keller
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions during the
discussion of the proposed Amendment 1 to CSHB 324 for the bill
sponsor, Representative Wes Keller.
REPRESENTATIVE TAMMIE WILSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 319 as the sponsor of the
bill.
MARCIA HOLT
North Pole, Alaska
POSITION STATEMENT: Testified during discussion of HB 319.
MEMOREE CUSHING
Ketchikan, Alaska
POSITION STATEMENT: Testified during discussion of HB 319.
JAMES McCLAIN
Fairbanks, Alaska
POSITION STATEMENT: Testified during discussion of HB 319.
RICHARD HOLM, Pharmacist
Fairbanks, Alaska
POSITION STATEMENT: Testified during discussion of HB 319.
LIS HOUCHEN, Director
State Government Affairs
National Association of Chain Drug Stores
Olympia, Washington
POSITION STATEMENT: Testified during discussion of HB 319.
DIRK WHITE, Chairman
Board of Pharmacy
Sitka, Alaska
POSITION STATEMENT: Testified in support of HB 319.
SUSAN ALT
No address provided
POSITION STATEMENT: Testified during discussion of HB 319.
GERALD BROWN, Pharmacist
Circle, Alaska
POSITION STATEMENT: Testified during discussion of HB 319.
BARRY CHRISTENSEN, Pharmacist
Co-Chair
Legislative Committee
Alaska Pharmacists Association
Ketchikan, Alaska
POSITION STATEMENT: Testified during discussion of HB 319.
SCOTT WATTS, Pharmacist
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 319.
DON HABEGER, Director
Division of Corporations, Business, and Professional Licensing
Department of Commerce, Community & Economic Development
Juneau, Alaska
POSITION STATEMENT: Testified during discussion of HB 319.
MIKE BARNHILL, Deputy Commissioner
Office of the Commissioner
Department of Administration (DOA)
Juneau, Alaska
POSITION STATEMENT: Answered questions during discussion of HB
319 and HB 356.
ACTION NARRATIVE
3:05:02 PM
VICE CHAIR WES KELLER called the House Health and Social
Services Standing Committee meeting to order at 3:05 p.m.
Representatives Keller, Nageak, Seaton, and Reinbold were
present at the call to order. Representatives Tarr and Pruitt
arrived as the meeting was in progress.
HB 324-CONTROLLED SUBST. PRESCRIPTION DATABASE
VICE CHAIR KELLER announced that the first order of business
would be HOUSE BILL NO. 324, "An Act relating to the controlled
substance prescription database." [In front of the committee,
was the proposed committee substitute (CS) for HB 324, labeled
28-LS1427\N, Strasbaugh, 3/7/14, which had been adopted as the
working draft on March 18, 2014]
VICE CHAIR KELLER, as sponsor of the proposed bill, reported
that he had had discussions with the Chair of the House Finance
Committee, the next committee of referral. He closed public
testimony.
3:06:23 PM
REPRESENTATIVE SEATON moved to adopt proposed Amendment 1,
labeled 28-LS1427\N.1, Strasbaugh, 3/20/14, which read:
Page 2, line 31, through page 3, line 1:
Delete "other than the state"
VICE CHAIR KELLER objected for discussion.
3:06:44 PM
JIM POUND, Staff, Representative Wes Keller, Alaska State
Legislature, explained that this amendment would open up other
sources of funding for the database, and would eliminate any
confusion regarding state funding.
VICE CHAIR KELLER removed his objection. There being no further
objection, Amendment 1 was adopted.
3:07:40 PM
REPRESENTATIVE NAGEAK moved to report CSHB 324, Version 28-
LS1427\N, Strasbaugh, 3/7/14, as amended, out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, CSHB 324 (HSS) was moved from the
House Health and Social Services Standing Committee.
3:08:38 PM
The committee took a brief at-ease.
HB 319-DRUG/DEVICE DISTRIBUTORS; COMPOUNDED RX
3:09:30 PM
VICE CHAIR KELLER announced that the next order of business
would be HOUSE BILL NO. 319, "An Act relating to wholesale drug
or device distributors; relating to prescription benefits under
the state health insurance plan; and providing for an effective
date."
3:10:25 PM
REPRESENTATIVE TAMMIE WILSON, Alaska State Legislature, stated
that the proposed bill had started as a simple bill that "got a
little bit more complicated along the way," and she read from
the sponsor statement:
Currently wholesale companies of drugs and medical
devices that are outside the state of Alaska are not
required to be licensed with the State creating an
unfair disadvantage to our local businesses. This
bill will level the playing field by requiring these
out of state wholesalers to be licensed as those are
in the state. Additionally, with the potential for
the counter fitting of products by rogue companies,
this legislation will help insure Alaskans receive
quality products.
It also adds verbiage which would include "pharmacy or
pharmacist" as a "provider" under section 6 (d) which
defines those occupations in which unfair
discrimination is prohibited against a person who
provides a service within the scope of the providers
occupational license. This bill would also require
the State of Alaska to pay for and/or reimburse
compounded prescription within the same scope and
manner as manufactured prescriptions. Pharmacy
compounding is the creation of a particular
pharmaceutical product to fit the unique need of a
patient. To do this, compounding pharmacists combine
or process appropriate ingredients using various
tools. This is done for medically necessary reasons,
such as to change the form of the medication from a
solid pill to a liquid, to avoid a non-essential
ingredient that the patient is allergic to, or to
obtain the exact dose(s) needed or deemed best of
particular active pharmaceutical ingredient(s).
Currently, a compound prescription that contains at
least one legend (RX only) drug is generally covered
by most insurance plans. However, the compounding
pharmacy may only be reimbursed for the legend drug(s)
in the compounded prescription, not the other
ingredients used or for the time it took to make the
compound. (This may mean that the pharmacy is unable
to make up the medication per the designed formula
and/or unable to dispense the intended product to the
patient.) This will negatively impact our local
businesses, in-fact it could put many out of business.
Alaskans deserve to have coverage of compounded
medications for potentially life-saving indications as
well as for quality of life.
Many of these drugs were previously covered, now the
customer must bear the cost anywhere from as little as
$80.00 to as much as $800.00 depending on the
compound.
REPRESENTATIVE T. WILSON said that she had spoken with the
Department of Administration after the change of "insurance
groups for retirees." She relayed that she had received e-mails
from constituents questioning why prescriptions previously
covered were no longer being covered. She shared her prior
understanding that medication would be covered if it included a
legend drug. Subsequently, she was informed that only the
legend drug part of the prescription would be covered. She
asked that testimony from more knowledgeable sources be allowed.
3:14:17 PM
VICE CHAIR KELLER opened public testimony.
REPRESENTATIVE SEATON asked if there were other circumstances
that required wholesalers selling in Alaska to have an Alaska
business license.
REPRESENTATIVE T. WILSON deferred to Dick Holm, and other
testifiers.
MARCIA HOLT explained that she was speaking for a friend who
used compound medications, and they were both retirees. She
said that her friend received treatment for spinal stenosis
which included shots and other medications, although the most
effective treatment was "a compounded cream that includes
numerous medications." She was not able to identify each of the
medications in the cream, but pointed out that this cream was no
longer covered by her insurance.
MS. HOLT, in response to Vice Chair Keller, said that her friend
was available to testify, but was content to have Ms. Holt
testifying for her.
MEMOREE CUSHING stated that she was a retiree from the State of
Alaska, and that she was no longer able to obtain the bio-
identical hormones for her rheumatoid arthritis. She reported
that she had previously used pharmaceutical hormones, which had
been covered under her health benefits. [Due to technical
difficulties, testimony was terminated]
JAMES McCLAIN shared that he was a retired state worker, and, as
he had prostate cancer in 2004, he needed a compound mix of
medications which were made locally. He requested that these
compounds be allowed.
VICE CHAIR KELLER asked for clarification that the compound
medication had previously been covered by his insurance.
MR. McCLAIN replied that this compound medication had been
covered by his state retirement insurance since 2004, but that
had changed since the state changed to AETNA at the beginning of
the current year.
3:21:54 PM
RICHARD HOLM, Pharmacist, said that his North Pole pharmacy, one
of three pharmacies that he owned, was a compounding specialty.
He noted that he was a former chair on the Board of Pharmacy.
He directed attention to the issue of wholesaler licensing, and
explained that, although the Alaska State Legislature had
revised these statutes in the mid-1990s, the licensing for out-
of-state wholesalers of drugs and medical devices had not
changed. In 2006, the Board of Pharmacy had decided to write
regulations addressing this change, but the Attorney General
informed the board that they did not have the statutory
authority for this. These proposed regulations had recently
become an issue, as a new U.S. Food and Drug Administration
(FDA) category of pharmacy, compounding manufacturers, were
dealing interstate with sterile products. He stated the
necessity for better regulations to protect the state's rights,
instead of allowing the federal government to "take it over."
He explained that pharmacies should be listed along with the
other medical providers in the insurance code, an oversight that
needed correction. He said there was no cost associated, and he
offered his belief that there was not any opposition.
MR. HOLM addressed the compounding issue in the proposed bill,
noting that the changes in insurance had brought it to bear.
Although it had been stated that there were not going to be any
changes in coverage, a purported 55,000 calls complained of
changes. He offered his belief that the majority of complaint
calls regarded compound prescriptions. He opined that the State
of Alaska could request this coverage, as [AETNA] was only the
plan administrator. He reported that this sort of thing
happened when the state changed [management], and that a change
in the statute would ensure that employees and retirees would be
able to get the necessary therapy and medications without any
break in service.
3:30:10 PM
REPRESENTATIVE TARR referenced instances where the compounding
of drugs had not been done in a safe manner, and asked if there
were any other issues related to compounding prescriptions which
should be addressed.
MR. HOLM stated that compounding was safe. However, as there
was a financial interest, especially with hormone issues,
companies would declare that some drugs were dangerous in order
to achieve financial gain. He stated that there would always be
unforeseen issues with drugs, such as sensitivity, and an
inherent danger for any drug therapy. He said that proper
handling of patient issues could mitigate a great deal of this
danger. He explained that compounding was based on the doctor,
pharmacist, and patient relationship, which he called the triad.
LIS HOUCHEN, Director, State Government Affairs, National
Association of Chain Drug Stores, said she was available to
answer any questions.
DIRK WHITE, Chairman, Board of Pharmacy, reported that he owned
a compounding pharmacy center in Sitka. He stated that the
ability to license the out-of-state wholesalers was critical to
the Board of Pharmacy. He offered his belief that Alaska was
the only state not licensing the out-of-state wholesalers.
VICE CHAIR KELLER asked if there would be an increase in the
costs to Alaskans.
MR. WHITE said that the wholesale licenses would generate more
revenue for the general fund.
VICE CHAIR KELLER asked how many people buy from unlicensed
wholesalers.
MR. WHITE listed the three largest unlicensed wholesalers,
stating that every pharmacy in Alaska purchased from them. He
noted that there was a plethora of smaller, generic unlicensed
wholesalers and there would not be any increase of costs due to
licensures to pharmacies or patients.
SUSAN ALT stated she had used compound products previously and
had no problem with repayment, but that, with the change to
AETNA, she now had to pay for each prescription. She declared
it was necessary that the state dictate to the administrator
what was covered. She questioned the concerns for the type of
form or prescription application as long as it provided the
treatment or necessary medication.
GERALD BROWN, Pharmacist, echoed the sentiments of the previous
testifiers. He said some compound products worked when some
commercial products did not work. He directed attention to page
5, line 25, [indisc.] cannot provide that service if the
insurance does not pay for the benefit. He moved on to page 6,
line 6, describing the lifetime benefit of $1 million, and he
offered his belief that the Affordable Care and Patient
Protection Act eliminated those caps. Pointing to page 6, line
18, and the maximum annual benefit of $4,000 for mental health
issues, he shared a personal anecdote for out-of-pocket costs
that were twice that amount. He stated that these maximums were
old, and needed to be updated to a more appropriate value. He
declared his support of proposed HB 319.
VICE CHAIR KELLER suggested that he contact the sponsor.
3:43:22 PM
BARRY CHRISTENSEN, Pharmacist, Co-Chair, Legislative Committee,
Alaska Pharmacists Association, stated his support of the
proposed bill. He mentioned that the compounding issue had
already cost a lot of time and energy, issues that the proposed
bill now addressed.
MS. CUSHING surmised that presently there was only coverage
between April and December, and that the problems arose during
the changes in providers. She offered her belief that there was
an attempt to chip away at the long promised health insurance
coverage, and there was a national problem with health insurance
companies doing away with benefits. She stated that AETNA had
claimed that it was not evidence based practice to use bio-
identical hormones. She listed a number of synthetic hormones
which were harmful to women, and stated that bio-identical
hormones, which exactly matched human hormones, had been used in
Europe for fifty years. She stated that the real crux of the
issue was money. She said that, as 2 million women were using
these hormones today, it would be known if there was a problem.
She said that compound hormones have been made for decades, and
the business was growing. She offered her belief that insurance
companies were dictating our medical care, instead of the
doctor, the patient, and the pharmacist making those decisions.
SCOTT WATTS, Pharmacist, testified in support of the proposed
bill. He said that allowing the board to license the wholesale
distributors was a safety issue for Alaskans as it allowed for
some oversight, and it leveled the playing field with those who
were already licensed and regulated by the Board. He said the
decisions since January 1, 2014 regarding compounds made in the
pharmacy for an individual patient had made it difficult to get
the medications to customers. He said these prescriptions were
written by all types of prescribers, and that many people were
either not able, or struggling, to get those medications. He
supported any necessary change to statute.
REPRESENTATIVE REINBOLD expressed her concern that none of the
medical device distributors had testified. She asked for the
outcome of an operation that used a pacemaker that was not
licensed or registered in Alaska.
MR. WATTS replied that it was only necessary for the provider,
not the device, to be licensed. In response to Representative
Reinbold, he expressed his inability to respond for the impact
if the wholesale distributor of the pacemaker was not licensed.
VICE CHAIR KELLER suggested that the sponsor or the Department
of Administration could respond. He expressed his concern for
any unintended consequences.
3:52:26 PM
DON HABEGER, Director, Division of Corporations, Business, and
Professional Licensing, Department of Commerce, Community &
Economic Development, clarified that a fiscal note had been
forwarded with the proposed bill requesting $36,000 for a half
time position to process new licenses and the required annual
reports. He said that it was "hard to divine the number of
licensees that might take advantage of a new license category."
He offered an estimate of 400 potential licensees.
REPRESENTATIVE TARR asked for the fiscal note.
VICE CHAIR KELLER said that the fiscal note would be
distributed.
3:54:42 PM
MIKE BARNHILL, Deputy Commissioner, Office of the Commissioner,
Department of Administration (DOA), said that the DOA
administered one of the state employee health care plans and the
health care plan for the public employee, teacher, judicial, and
elected public official retirement systems. These plans covered
84,000 people, with 67,000 in the retirement system. He said
that, as the plan was subject to the Alaska Procurement Code, an
RFP [Request for Proposal] had been issued for claims
administrators about every five years, since 1998 when the state
self-insured for its health plans. He listed the various claims
administrators which had included Premera, Wells Fargo, Health
Smart, and AETNA. There were about 30,000 medical and pharmacy
claims each week. During the claims administrator transition
process, there were hundreds of details to be transitioned
appropriately, and in this last process, a professional project
manager had been hired to help with the transition. He
acknowledged that the compounds medications issued had been
missed in the transition. He offered his belief that the prior
list of compounds that were being processed had been passed to
AETNA, the current claims administrator, but that there had not
been any discussion regarding it. He acknowledged that those
compound medications had been denied since January 2, and that
there had been 50,000 calls in January, with half that number in
February, which, although in decline, was still too high.
Directing attention to compound medications specifically, he
opined that one percent of pharmacy script was compound
medication. He relayed that DOA became concerned and had
internal discussions, as well as discussions with AETNA. These
discussions revealed a variety of issues pertaining to compound
medications that were worthy of additional discussion and
scrutiny. He stated that those discussions should have been had
last fall in the run-up to the transition. DOA instructed AETNA
to cover the compound medications, and AETNA agreed to recode
its pharmacy claims system to include the process of compound
medications at the point of service beginning on April 1, 2014.
He suggested that pharmacists should currently enter an
override, which AETNA would accept. He said that DOA had only
agreed to make the change through December, and it was necessary
for some serious scrutiny to determine the next stage. He
shared some of the issues arising from the internal inquiry. He
reported that, as the FDA did not regulate compounding by local
pharmacies, it was administered by state pharmacy organizations,
although he was not clear to what extent the Board of Pharmacy
provided regulation and oversight of the fabrication of compound
medications within a pharmacy. He opined that the proposed bill
was going in the opposite direction of many state legislatures,
which were discussing the addition of more oversight and
scrutiny for local compounding practices by state regulators,
rather than less. He said there was no evidence indicating
safety oversight in the compounding pharmacies in Alaska, and
that this was worthy of investigation. He raised a question for
some of the substances used in compounding, and he pointed to
earlier testimony for bio-identical replacement therapy. He
shared that there was some controversy, with concern from the
Mayo Clinic, the FDA, the Endocrine Society, and the American
College of Obstetricians and Gynecologists, for marketing bio-
identical replacement therapy as safe. He pointed out that the
FDA required a cautionary insert with these, and that all the
aforementioned groups had agreed that pharmacies should not
declare things are safe, when there was evidence that suggested
there were risks and should only be consumed after informed
consent. He declared that there were instances when compounding
was necessary, as some people were allergic to legend substances
and dyes, and there may not be a commercially available
medication. He stated that, as these patients needed access to
an active ingredient that was only available in a compounded
form, this piece of compounding needed to be preserved, no
matter the outcome for compounding as a whole. This would
ensure access to compound medications with no available
alternative for an FDA legend drug. He stated that these
concerns would be reviewed during the upcoming year, and that
any limit to compound drugs would be preceded by education and
communication for the alternatives.
4:04:40 PM
MR. BARNHILL directed attention to the proposed bill, and stated
that, as drafted, it did not apply to the Alaska Care health
insurance program. He reported that Section 7 only applied to
the Alaska Comprehensive Health Insurance Association (ACHIA)
high risk insurance program. He offered his belief that the
intent of the proposed bill was to target Alaska Care, and that
Version O, not yet proposed to the committee, better attempted
to target AS 39.30.090 and required the coverage of compound
medications, although it "doesn't quite get us there because
we're no longer fully insured, we do not buy group insurance."
He said that this version would also need additional work to
have it applicable to the Alaska Care plan. He directed
attention to a list of Frequently Asked Questions (FAQ) on
compound medications. He said that the aforementioned changes
for compound medications would go into effect on April 1.
VICE CHAIR KELLER said that the proposed bill would be held
over. He asked if the compounding of medications was
increasing, and he asked if insuring this coverage would
increase future expenses.
MR. BARNHILL replied that, currently, one percent of the script
volume was for compound medications. He stated that his
research indicated that some pharmacies had marketed themselves
as compounding pharmacies and used compounding to expand profit
margins, and he acknowledged that some individuals needed access
to some active ingredients that were not available through
commercially available medications.
REPRESENTATIVE TARR asked for more information about his earlier
reference to the group plan in Version O [not yet proposed to
the committee].
MR. BARNHILL replied that the state stopped buying commercially
available insurance in 1998, when the state became self-insured,
under the authority of AS 39.30.091.
4:09:09 PM
VICE CHAIR KELLER held over HB 319.
REPRESENTATIVE T. WILSON, as the bill sponsor, said that she
intended to introduce a committee substitute which would remove
the issue of compounding. She requested a continuance of
coverage for compound medications until April, 2015, which would
allow legislation to be introduced in the following legislative
session. Addressing the proposed bill, she declared that
Section 1 was necessary "to make sure that we level the playing
field so that we're not charging our people who have businesses
in Alaska differently than those who are out-of-state." She
declared a need to continue promised coverage to retirees.
Addressing an earlier question by Representative Reinbold, she
noted that "device" was already defined in statute.
REPRESENTATIVE REINBOLD expressed her concern that there was not
any testimony from those distributors impacted by the proposed
bill.
REPRESENTATIVE T. WILSON, in response, stated that the proposed
bill did not request to license any devices, but only those
selling the devices. She declared that the state was already
liable as it was "letting anything come into the state with no
regulation whatsoever, while we regulate only the in-state."
VICE CHAIR KELLER asked that the committee submit its questions
to the sponsor. He held over HB 319.
HB 356-ADVISORY COMMITTEE ON WELLNESS
4:12:33 PM
VICE CHAIR KELLER announced that the final order of business
would be HOUSE BILL NO. 356, "An Act establishing the Advisory
Committee on Wellness; and relating to the administration of
state group health insurance policies."
4:13:09 PM
REPRESENTATIVE SEATON, as sponsor of proposed HB 356,
paraphrased from the sponsor statement:
HB 356 requires the Commissioner of the Department of
Administration to implement procedures for decreasing
the incidence of disease in Alaska in order to hold
the inflation of healthcare costs of active and
retired Alaska state employees to 2% per year.
According to the Institute of Social and Economic
Research, total health care spending in Alaska topped
$7.5 billion in Alaska in 2010, with state government
employers paying over $400 million. A major component
of our $12 billion unfunded pension liability is
retiree healthcare costs. HB 356 requires the
Commissioner of Administration to put in place
programs that will decrease the incidence of disease
in State of Alaska employees, both current and
retired, in order to hold the inflation of costs to 2%
per year.
This bill focuses on preventing the incidence of
disease as opposed to treatment of disease.
Prevention of disease is the policy approach
unanimously requested of the Governor by the
legislature through HCR 5 in 2011. This is an area of
healthcare where the most economic impact can be
achieved. For instance, recent studies show that an
action as simple as taking a daily supplement of 5,000
IU of vitamin D can dramatically reduce the risk of
heart disease, diabetes, cancer, autism, gingivitis,
and many other conditions.
HB 356 creates an Advisory Committee on Wellness which
is charged with making recommendations to the
Commissioner of Administration on ways to decrease the
incidence of disease in Alaska. HB 356 will enforce a
paradigm shift for the Department of Administration
and the Department of Health and Social Services. It
will require the agencies to implement policies to
keep Alaska state employees healthy by preventing
disease, rather than the common, reactive policy of
waiting until people get sick and then treating them.
REPRESENTATIVE SEATON directed attention to a PowerPoint
presentation entitled, "HB 356 Prevention of Disease Decreasing
the Alaska Healthcare Liability," and the unfunded liability in
the PERS and TRS accounts. He addressed slide 1, "$3.8
Billion," which he declared to be the current amount of unfunded
liability for health care costs, with an annual increase of more
than 2 percent. Directing attention to slide 2, "Why are we
here?" he noted that the state was spending more than $100
million annually for active employees, and almost $500 million
for retirees. He pointed out that the state also paid health
care costs for inmates, state employees under union health
trust, Medicaid, and workers compensation, slide 3. He
explained that the current discussion would be about DOA
policies for workers and retirees for Alaska, and noted that
almost 60 percent of the $7.5 billion of the state cost for
health care was spent on hospital care, doctors, and clinical
services.
REPRESENTATIVE SEATON moved on to slide 5, "This is the way we
currently contain costs:" and pointed out that the state
insurance focused on limitations of coverage for certain
conditions or limitations on compensation for procedures. He
stated that the Department of Labor & Workforce Development
tried to prevent accidents by limiting time on the job and
requiring safe job conditions. He said that Department of
Health and Social Services had some prevention programs,
including voluntary childhood vaccinations, prescription drug
safety, and voluntary lifestyle changes, which he deemed to be
tough accomplishments. He pointed out that Department of
Environmental Conservation and Department of Natural Resources
worked on food safety requirements, including shellfish testing,
pasteurized milk requirements, and restaurant and food processor
inspections. He stated that the Department of Public Safety
enforced the laws. He pointed out that the aforementioned $3.8
billion expense was created by the institution of these current
programs.
REPRESENTATIVE SEATON asked "How can we avoid diseases and
prevent illness instead of just reacting to and paying for
Sickcare," slide 6. Moving on to slide 7, "Active Plan," he
noted that these were the aggregate risk profiles and risk
drivers of the plan, with a contribution percentage for the
direct relation of each to Vitamin D levels. He stated that the
total of diseases directly related to Vitamin D levels was 66
percent. Moving to slide 8, "Retiree Plan," the risk factors
related to low vitamin D levels was 61 percent. He spoke about
slide 9, "Meta-analysis of breast cancer risk," a group of
studies that combined data and then segregated these into five
groups by blood serum Vitamin D. The national average was 21
ng/ml, yet the rate for blood cancer was decreased by half when
Vitamin D rates moved up to 52 ng/ml.
REPRESENTATIVE SEATON reported on slide 10, stating that, with
Vitamin D use, there was a 50 percent reduction to the costs
resulting from breast cancer.
REPRESENTATIVE SEATON projected slide 11, "Meta-analysis," and
noted the 50 percent reduction in incidence of colon cancer with
Vitamin D use, an almost $2 million savings for the state, slide
12. He discussed slide 13, "Diabetes Incidence:" which
reflected a clinical trial for Type 2 Diabetes and the 90
percent reduction of incidences with the increase of Vitamin D
to 48 ng/ml, slide 14, "Type 2 Diabetes." Slide 15, reflected a
$4 million per year savings with this Vitamin D use. He
stressed the importance of raising Vitamin D levels to the 40-60
ng/ml.
4:26:28 PM
REPRESENTATIVE SEATON pointed to slide 16, "march of dimes,"
which reflected the reduction of preterm births in Alaska with
an increase of Vitamin D. The savings to the state was $1.3
million, slide 17. He spoke about slide 18, "Upper Respiratory
Tract Infections," and compared levels of Vitamin D above 30
ng/ml with the relative risk of upper respiratory tract
infections. He reviewed slide 19, "Inflammatory gum disease,"
and spoke about tooth loss and infection, and that relationship
to other illnesses in the body. He pointed to the 80 percent
reduction in inflammation in 90 days with an increase in Vitamin
D levels to 50 ng/ml.
REPRESENTATIVE SEATON stated that individual Alaskans and the
State shared a burden for the increasing health care costs. He
declared that the state had not adequately focused on a policy
of avoiding disease and maintaining health, slide 20. He read
from the proposed bill, slide 21, "to the greatest extent
legally and reasonably practicable, the Department of
Administration shall work to hold down the escalation of health
care costs to less than 2 percent annually by administering
policies of the group health insurance obtained under this
subsection in a manner that is likely to reduce the incidence of
disease in the state's population and facilitates implementation
of the recommendations of the Advisory Committee on Wellness
established under this bill." He emphasized that this
represented a "total change in the direction in which we view
health care." He stressed that it was necessary for a new tack
if we were going to address the unfunded liability and the
impending big budget deficits. He said that the aforementioned
Advisory Committee on Wellness was modeled on the Citizens
Review Panel for the Office of Children's Services [Department
of Health and Social Services]. It would comprise of a minimum
of seven appointed members, with at least one health care
provider. Similar to the Citizens Review Panel, the
administration would be required to address the issues brought
forward by the panel. He declared that this could change the
course of escalating health care costs and the large unfunded
liability.
REPRESENTATIVE TARR asked whether there were expansions for
preventative care and additional covered services under the
Affordable Care and Patient Protection Act, and were these a
complement for long term cost savings to the proposed bill.
REPRESENTATIVE SEATON replied that this proposal was a paradigm
shift, whereas the Affordable Care and Patient Protection Act
was directed more toward affordable insurance and paying for
sick care. He relayed that its only prevention means were early
detection screenings.
REPRESENTATIVE SEATON read a list of the study titles which
included Senior Health Issues, Vitamin D Supplementation
programs, and Low Serum Vitamin D concentration in Alzheimer's
disease.
REPRESENTATIVE SEATON, in response to Vice Chair Keller,
explained that the proposed bill requested that Department of
Administration (DOA) focus on disease prevention in its health
coverage policy. He suggested an incentive of a lower co-pay if
people agree to increase their Vitamin D level to between 40-60
ng/ml. He suggested that DOA construct an incentive system
during negotiation with the union health care contracts. He
pointed to the potential health care tradeoffs with health care
accounts. He noted that this could spread to include not only
the health insurance programs in the state, but also include
Medicaid. He declared that many chronic diseases could be
avoided at a fraction of cost, noting the huge cost/benefit
ratio. He reminded the committee that, in 2011, House
Concurrent Resolution 5 was passed, which called on the governor
to declare prevention of disease as the primary model for health
care, and that this resolution had not been implemented. The
current proposed bill, HB 356, would be another reminder for the
administration to implement the policy, and, as it would be in
statute, it was a priority. He declared that the crux of the
proposed bill was to prioritize this paradigm shift to lower
health care cost by avoiding disease. He allowed that there had
been a voluntary wellness committee in Department of Health and
Social Services, although it had never been set in statute or
required the DOA to respond. He offered his belief that the
focus had always been to pay for the sick care, and not to focus
on keeping people well. Lifestyle changes were hard and had to
be voluntary. He declared that the intention of the proposed
bill was for the Alaska State Legislature to set a policy for a
healthy Alaskan workforce and retiree base, and lower the health
care cost. He opined that this would help alleviate the
upcoming fiscal constraints.
VICE CHAIR KELLER summarized that the proposed bill was a change
in the DOA mission statement, and that performance would be
measured on the successful implementation of the
recommendations.
REPRESENTATIVE SEATON replied that the language of the proposed
bill allowed a lot of latitude. He said that the millions saved
would make a huge difference.
REPRESENTATIVE TARR said that she supported the idea and any
efforts at prevention. She suggested a need for clarifications
of the criteria for the seven volunteer committee memberships.
REPRESENTATIVE SEATON explained that the proposed bill suggested
at least seven committee members, though there could be more to
even better create a geographical representation. He emphasized
the necessity for a clear intent from the legislature.
4:47:37 PM
MIKE BARNHILL, Deputy Commissioner, Office of the Commissioner,
Department of Administration (DOA), expressed his appreciation
to the sponsor, and stated that DOA shared the enthusiasm for
wellness initiatives and the idea to trend medical costs down to
2 percent. He questioned whether this was achievable, however.
He offered to share past DOA programs, which included a wellness
committee for the 2012 state employee health plan. There were
over 90 applications for the 12 positions on the wellness
committee. He explained the "first dollar preventive care" in
the state employee health plan, which meant that certain
preventive care services were not subject to the deductible. He
opined that it was too early to measure the efficacy of any of
these measures; although some of these initiatives were popular
with certain constituencies, there was also an equally prominent
constituency that was skeptical of government telling them what
to do and how to live their lives. He offered his belief that
this was the larger segment, and he questioned how to engage
with this population for an effective wellness campaign.
MR. BARNHILL said that a variety of issues drive health care
costs. He stated that end-of-life care was very expensive, and
there were many expensive behavioral issues, as well. He stated
that many people will not change the way they live their lives.
He opined that, although the benefits of Vitamin D was an
interesting proposal, there were health costs driven by issues
not addressed by Vitamin D, noting especially the high cost of
orthopedic fractures. He reported that AETNA was developing "a
more robust network particularly for specialists," as
controlling these costs was very important.
4:54:37 PM
REPRESENTATIVE TARR asked about the suggested wellness committee
approach in the proposed bill.
MR. BARNHILL replied that there were discounts for State of
Alaska employees at gyms, recreation clubs, etc. and that there
were intermittent programs, competitions, and initiatives. He
expressed his understanding that this would only appeal to a
certain percentage of the workforce.
MR. BARNHILL, in response to Representative Tarr, said that
there was a strategic health initiatives coordinator who
coordinated these program discounts.
VICE CHAIR KELLER asked for details about the current wellness
committee.
MR. BARNHILL replied that the 12 members met monthly.
VICE CHAIR KELLER asked if the committee had considered the use
of Vitamin D.
MR. BARNHILL replied that he did not know.
REPRESENTATIVE SEATON said that the wellness committee had not
met "since AETNA came on-line." He referred to the New Zealand
report which advocated for Vitamin D, noting that usage had
jumped from 15 percent to 74 percent, with a 32 percent
reduction in aged residential care in the emergency department
from falls and fractures. He expressed the need to reach out to
residential senior facilities across Alaska, and his desire to
give the administration a tool for use in contract negotiation
for prevention programs. He suggested that the legislature
adopt a policy for healthy Alaskans.
5:00:10 PM
VICE CHAIR KELLER asked that the DOA discuss its support and
report back to the committee. [HB 356 was held over.]
5:00:43 PM
ADJOURNMENT
There being no further business before the committee, the House
Health and Social Services Standing Committee meeting was
adjourned at 5:00 p.m.