Legislature(2021 - 2022)BARNES 124
03/18/2022 09:00 AM House LABOR & COMMERCE
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| Audio | Topic |
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| Start | |
| Presentation: Economic Impacts of Health Care Costs | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
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ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 18, 2022
9:05 a.m.
MEMBERS PRESENT
Representative Zack Fields, Co-Chair
Representative Ivy Spohnholz, Co-Chair
Representative Calvin Schrage
Representative Liz Snyder
Representative David Nelson
Representative Ken McCarty
MEMBERS ABSENT
Representative James Kaufman
COMMITTEE CALENDAR
PRESENTATION: ECONOMIC IMPACTS OF HEALTH CARE COSTS
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
JON BITTNER, Executive Director
Alaska Small Business Development Center
Anchorage, Alaska
POSITION STATEMENT: Provided a PowerPoint, titled "Economic
Impacts on Alaska's Workforce."
LORI WING-HEIER, Director
Division of Insurance
Department of Commerce, Community, and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Provided a PowerPoint, titled "Health Care
Costs in the Last Frontier."
JASMIN SMITH, CEO and Founder
The Business Boutique
Anchorage, Alaska
POSITION STATEMENT: Discussed the economic impacts of health
care costs to small businesses.
ELIZABETH RIPLEY, President and CEO
Mat-Su Health Foundation
Wasilla, Alaska
POSITION STATEMENT: Provided a PowerPoint, titled "Mat-Su
Health Foundation - House Labor & Commerce."
SANDRA HEFFERN, Project Coordinator
Alaska Healthcare Transformation Project
Anchorage, Alaska
POSITION STATEMENT: Provided a PowerPoint, titled "House Labor
and Commerce Committee Healthcare Costs and Cost Drivers."
ACTION NARRATIVE
9:05:55 AM
CO-CHAIR IVY SPOHNHOLZ called the House Labor and Commerce
Standing Committee meeting to order at 9:05 a.m.
Representatives McCarty, Fields, Nelson, and Sponholz were
present at the call to order. Representatives Schrage and
Snyder arrived as the meeting was in progress.
^PRESENTATION: Economic Impacts of Health Care Costs
PRESENTATION: ECONOMIC IMPACTS OF HEALTH CARE COSTS
9:06:36 AM
CO-CHAIR SPOHNHOLZ announced that the only order of business
would be a presentation on the economic impacts of health care
costs.
9:07:43 AM
JON BITTNER, Executive Director, Alaska Small Business
Development Center, provided a presentation, titled "Economic
Impacts on Alaska's Workforce" [hard copy included in the
committee packet]. He noted the rising costs of health care and
said this is a significant driver of costs to small businesses.
He noted that, on average, employers pay $750 per employee per
month for health care. Since the global economic downturn
during the COVID-19 pandemic, he said there has been an
unprecedented rise in workforce costs because of inflation and
the need for competitive employee pay and benefits. He pointed
out the cost-of-living index and that, compared with 300 other
cities, 5 cities in Alaska have the highest health care costs.
9:17:06 AM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community, and Economic Development, delivered a
PowerPoint presentation, titled "Health Care Costs in the Last
Frontier" [hard copy included in the committee packet]. She
explained that health care costs are high in Alaska because of
the population size. She explained that there are not enough
primary care providers, and recruitment and retention costs for
providers are high in Alaska. She mentioned that the state's
senior population is growing and pointed out that providing
services to patients in rural Alaska is expensive. She pointed
out that Medicaid and Medicare have low reimbursement rates, and
to make up for the difference, providers will "cost shift" to
other plans or payers. She stated that all these factors
contribute to the high cost of health care in the state. She
pointed out that between 2010 and 2018, Alaska's health care
costs rose 38 percent. As of 2017, Alaska was the highest
paying state for health care practitioners. As of 2018, health
care was the state's largest private sector employer. As of
2021, 39,200 Alaskans were employed in the health care industry.
MS. WING-HEIER stated that the Affordable Care Act requires that
individual and small group insurers spend at least 80 percent of
premium dollars on health care and quality improvement. She
continued that, according to FairHealth, when compared to
national averages, the COVID-19 pandemic had a significant
impact on medical and hospitalization costs in Alaska. She
expressed the opinion that insurance premiums are expected to
rise next year. She stated that the division is supportive of
direct health care agreements, and this would make a big
difference in the cost of insurance.
9:30:18 AM
JASMIN SMITH, CEO and Founder, The Business Boutique, detailed
affordability issues from a business standpoint. She stated
that it is very difficult for businesses to offer health
insurance and provide a livable wage. Because of the expense of
health insurance, she said it is more difficult for businesses
to stay competitive and appear compassionate to its employees.
She suggested there should be more flexible opportunities and
options for employers to offer health insurance, as it is not
financially feasible for small businesses to offer employees'
health care. She added that this has created a long-term
disparity for Black, Indigenous, and People of Color (BIPOC)
businesses and owners.
9:35:00 AM
ELIZABETH RIPLEY, President and CEO, Mat-Su Health Foundation,
gave a PowerPoint presentation titled, "Mat-Su Health Foundation
- Labor and Commerce" [hard copy included in the committee
packet]. In reference to the Mat-Su Health Foundation, she
stated that an LLC partnership was formed with an equity partner
to bring in the capital to build the Mat-Su Regional Medical
Center. She explained that the Mat-Su Health Foundation takes a
share of the profits from the medical center and invests them
back into the community in the form of grants and scholarships;
the more the hospital makes, the more the foundation receives to
provide grants to the community; however, she added that
lowering costs is necessary to create health care reform. She
stated that per-capita health care costs are rising, and the
Mat-Su Health Foundation has rallied its support for the
expansion of Medicaid. She stated that Medicaid expansion
dollars would fill significant gaps in reimbursements, but
prices continue to rise for all payers. The Mat-Su Regional
Medical Center has reduced waste and inefficiency and decreased
the cost of doing business; however, the price of medicine is
still going up. She expressed the opinion that large medical
institutions are taking advantage of Alaska's weak policies.
Families, employers, school districts, and governments are
bearing the brunt of the rising cost of health care. The
National Academy for State Health Policy recommends limiting
cost increases over time through a total cost-for-care cost-
growth benchmark. This would help control hospital cost by
using a more stringent insurance rate review, containing costs
and reducing cost-shifting through an all-payer or global
hospital budget model, and addressing health care consolidation
through action by the attorney general.
9:45:27 AM
SANDRA HEFFERN, Project Coordinator, Alaska Healthcare
Transformation Project, offered a PowerPoint presentation,
titled "House Labor and Commerce Committee Healthcare Costs and
Cost Drivers" [hard copy included in the committee packet]. She
described that the Alaska Healthcare Transformation Project is a
cross sector collaboration of payers, providers, policymakers,
and patient advocates working together to transform Alaska's
health care system. The cost of Alaska's health care is $7.5
billion and climbing, which amounts to an estimated $12,500 per
Alaskan. From 1994-2014 there was a $6.4 billion increase in
health care spending. This amounts to a 371 percent increase.
According to a report from the Robert Wood Johnson Foundation,
technological change is the most important driver of health care
spending increases over time. She pointed out that half of real
health expenditure growth is attributed to medical technology.
Discussing the health care per patient percentages, she pointed
out that the costliest 1 percent of patients account for about
20 percent of all the health care spending. People with three
or more chronic diseases generally fall into this 1 percent
category. The top 5 percent of patients consume 49 percent of
all health care spending. The top 50 percent consume 97 percent
of health care spending. According to the Center for Disease
Control, the leading causes of death in Alaska, outside of
"COVID years," are heart disease, cancer, accident, stroke, and
chronic obstructive pulmonary disease.
MS. HEFFERN noted that Senate Bill 74 [passed during the Twenty-
Ninth Alaska State Legislature] provided the legislation which
allowed the then Department of Health and Social Services to
solicit coordinated-care demonstration projects. She pointed
out that there are projects which are ready but lack the
authority and financial redesign from the Department of Health
to move forward and address health care policy evaluation. She
advised that this evaluation should be based on current and
accurate data analysis, and this would go beyond the inevitable
changes in future administrations. She concluded that health
care reform is a long road that requires continuity and focus.
9:53:38 AM
CO-CHAIR SPOHNHOLZ mentioned time constraints with the House
floor and the possibility of resuming the conversation of
economic impacts of health care costs in Alaska at a later date.
9:55:09 AM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
9:55 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HL&C Health Care Costs Hearing_ISER_3.18.22.pdf |
HL&C 3/18/2022 9:00:00 AM |
Health Care Costs |
| HL&C Health Care Costs Hearing_AK Healthcare Transformation Project_3.18.pdf |
HL&C 3/18/2022 9:00:00 AM |
Health Care Costs |
| HL&C Health Care Costs Hearing_AKSBDC_3.18.22.pdf |
HL&C 3/18/2022 9:00:00 AM |
Health Care Costs |
| HL&C Health Care Costs Hearing_Mat-Su Health Foundation_3.18.22.pdf |
HL&C 3/18/2022 9:00:00 AM |
Health Care Costs |
| HL&C Health Care Costs Hearing_Division of Insurance_3.18.22.pdf |
HL&C 3/18/2022 9:00:00 AM |
Health Care Costs |