HOUSE BILL NO. 204 "An Act increasing the number of students pursuing a medical education who are provided postsecondary educational services and programs; and providing for an effective date." REPRESENTATIVE NANCY DAHLSTROM, SPONSOR, related that the bill would add four students to the medical education program. 9:19:22 AM SAM DIX, STAFF, REPRESENTATIVE NANCY DAHLSTROM, explained that the purpose of the bill is to add four more medical students and eventually establish a 30-student program. It is an attempt to maximize the facilities at the University of Alaska - Anchorage. Vice-Chair Thomas asked if the bill pertains only to medical doctors. Mr. Dix said that was correct. Vice-Chair Thomas hoped to see the bill expanded to include dentists. He asked if the administration supports the bill. Representative Dahlstrom reported that the administration does support the bill. She offered to work on expanding the bill to include other areas. Vice-Chair Thomas expressed frustration and thought he might not support the bill. 9:21:38 AM Representative Dahlstrom offered to work on that problem. Representative Austerman inquired about the cost of the program. He wondered, since it is a loan program, why general fund dollars would be needed. Representative Dahlstrom stated that it was a loan forgiveness program. 9:23:02 AM DIANE BARRANS, EXECUTIVE DIRECTOR, POSTSECONDARY EDUCATION COMMISSION, DEPARTMENT OF EDUCATION, agreed with Representative Austerman that the program is funded with state general funds. The existing program operates in excess of $2 million a year. She reported that it is a work obligation program with a trigger if someone in the program fails to return to Alaska. Representative Austerman asked how long the obligation was. Ms. Barrans replied that students have 15 years to pay if they fail to return to the state and provide three to five years of service. Representative Austerman presented an example of a doctor who returns to the state, provides service, and has the loan forgiven. Ms. Barrans agreed with his analysis. She clarified that the service obligation is in lieu of repayment. 9:24:38 AM Representative Fairclough reported that she followed the bill last year and the discussions in the HESS committee. She asked about the dismal return rates and wondered if a residency program would help solve the program. Ms. Barrans explained that past return rates proceeded the loan obligation period of the program. The actual return rate of Alaskans varied between 45 and 55 percent and should now increase. Out of state WWAMI students also chose to participate in Alaska. She explained how the residency requirements work. It takes about seven years to complete the program. The cohort of students that would have completed a three-year residency in the fall of 2008 was the first group with the contractual service obligation. 9:27:27 AM Co-Chair Hawker asked for more information about return rates. DENNIS VALENZENO, DIRECTOR AND PROFESSOR, WWAMI PROGRAM, UNIVERSITY OF ALASKA, ANCHORAGE, via teleconference, related that the return rate of Alaskans is actually quite good compared to outside programs. About 50 percent come back to the state to practice. Students coming to the state from other states to do short clinical experiences impact the statistics. The overall return on the investment is about 88 percent since the beginning of the program in 1971. It takes about seven years to complete the program. Residency is the most important factor as to where doctors choose to practice. Where students go to school is the second most important factor. Through WWAMI Alaska is able to offer three of the four years of medical school. 9:30:39 AM Representative Fairclough had heard a different scenario. She wished to research the statistics further. Co-Chair Hawker asked if the state would benefit more by increased residency programs or by more students in the WWAMI program. SUZANNE TRIPP, DIRECTOR, REGIONAL PROGRAMS, UNIVERSITY OF WASHINGTON SCHOOL OF MEDICINE, via teleconference, first addressed Vice-Chair Thomas's concerns about dentists. She related that through the University of Washington, there was an option for developing dental programs in Alaska based on the WWAMI model. Ms. Tripp turned to the issue of residency training. She maintained that it was a huge factor in WWAMI. Residency programs are being developed currently. She spoke of overcoming obstacles related to developing residency programs in Alaska. There needs to be sufficient technical expertise, adequate finances - based on Medicare bed rates, and enough case volume in order to qualify to take on residents. Branch programs in pediatrics and in psychiatry are currently being developed. Internal medicine programs will be next. 9:33:11 AM Representative Fairclough summarized that residency is the number one factor. She wished to check further. Representative Gara agreed with the expansion of family practice residency. He voiced support for the bill. He mentioned a concern about an acute shortage of internists, family care physicians, and gerontologists. He suggested focusing scholarships in those areas. Representative Dahlstrom offered to meet to discuss this issue and to include the Committee's concerns. She added that she has concerns with lack of medical care in parts of the state. 9:36:22 AM Representative Gara said he was open to a conversation. Co-Chair Hawker asked for an opinion of Representative Gara's comments. Mr. Valenzeno agreed that targeting an area of medical practice was a good idea. He thought it would be difficult to hold a student to that choice. Representative Gara hoped there was a way to make it work. 9:38:10 AM Representative Austerman wondered whether returning doctors are required to serve high-need areas or rural areas. Ms. Barrans reported that there is an incentive to accelerate the discharge of the financial obligation by choosing a rural area. 9:39:12 AM Vice-Chair Thomas asked what the average obligation to the state was. Ms. Barrans said it was $90,000, which would increase by about 4 to 6 percent per year. That amount is in addition to about $100,000 of education debt the student has already incurred. Vice-Chair Thomas asked if $190,000 was the amount forgiven. Ms. Barrans explained that the $100,000 was owed to the federal government or other lenders. Vice-Chair Thomas wondered why 15 years was allowed for paybacks. He suggested the payback be accelerated if the student does not return to the state. Ms. Barrans observed that collectability must be considered. It is difficulty to leverage an accelerated repayment on such a large amount without collateral. 9:41:56 AM Representative Fairclough inquired about the delinquency rate of the loans. Ms. Barrans reported that currently there is zero delinquency. Representative Austerman asked about the forgiveness period and amount collected. Ms. Barrans reported that $170,000 is the amount collected with interest by the state if they don't return and work in the state. Representative Austerman asked if the $90,000 original loan was forgiven if the student returns to the state to work for five years. Ms. Barrans said that was correct. 9:43:37 AM Representative Salmon asked about incentives to bring physicians to come to Alaska to work. Ms. Barrans was not aware of such a program. Co-Chair Hawker opened public testimony. 9:44:27 AM Ms. Tripp clarified that the average amount of debt for an Alaska WWAMI graduate is about $130,000 because they pay tuition in addition to state support. The amount of money the state sends to the University of Washington is equivalent in context, not amount, to the amount of general fund used by the University of Alaska. It makes the partnership of the University of Washington and the state's medical school, similar to any publically funded medical school. The money the state pays is not a scholarship or a grant; it is the state's support for medical education. In addition, students may receive scholarships or loans and pay tuition to the University of Washington and the University of Alaska. Students usually have more than $200,000 worth of obligation upon completion of their education. In Alaska there is a need for primary care physicians. There is a correlation between debt and the type of medicine practiced. 9:46:39 AM Co-Chair Hawker closed public testimony. Co-Chair Hawker requested information about the fiscal note. Mr. Dix explained that in 2012 the total operating budget would be $210,300. For 2013 it would be $425,200. For 2014 it would be $550,300 and for 2015 it would be for $557,400. Co-Chair Hawker asked why it accelerates over the years. Ms. Tripp related that it accelerates because there are more students in the program every year. Co-Chair Hawker concluded that it was a cumulative bill. 9:48:37 AM Representative Gara asked if the WWAMI subsidy was for four years of medical school, but not for the residency because the students would be getting paid. Ms. Tripp said that was correct. Representative Austerman inquired if the amount was for four new students. He asked if there was already $2 million in the program. Ms. Tripp said that was correct. Vice-Chair Thomas asked if the fiscal note covers the student that has an assistant. Ms. Tripp stated that it does include all expenses. Vice-Chair Thomas asked how many more teachers would be added. Ms. Tripp explained the apprenticeship program and how sites are found. Additional persons are then brought on, however, she did not know how many. 9:50:57 AM Vice-Chair Thomas thought extra individuals were hired to supervise the students. Ms. Tripp recalled that there was a coordinator who would help students navigate through medical school, as well as career counselors. In the third and fourth year additional supervisors are involved. Vice-Chair Thomas wanted to know the costs in addition to funding the students. 9:52:04 AM Representative Joule wondered what the shortage of doctors would look like without this program. He asked where residencies take place. Ms. Tripp reported that residency training can happen in a number of sites, determined by the population of the town and type of residency. One of the requirements for pediatricians is that a doctor be available on site for training. In Bethel the residents go out to various rural sites for one month. Ms. Tripp addressed the issue of physician training and the physician shortage in Alaska. There is a need for 30 more physicians a year in order to address the shortage of doctors in the state. There are currently 260 WWAMI doctors in the state. A primary care physician has about 3,000 patient visits a year. Representative Joule thought that was a "pretty good picture" of the situation. 9:54:58 AM HB 204 was heard and HELD in Committee for further consideration. 9:55:47 AM