HB 78-INCENTIVES FOR CERTAIN MEDICAL PROVIDERS  3:41:45 PM CHAIR KELLER announced that the next order of business would be HOUSE BILL NO. 78, "An Act establishing a loan repayment program and employment incentive program for certain health care professionals employed in the state; and providing for an effective date." CHAIR KELLER offered an analogy for HB 78 to that of investing in new tires for an old car that has everything wrong. He offered his belief that the destiny of the Patient Protection and Affordable Care Act was still in the court system, and that the costs of the health care system were no longer supportable. He opined that a government subsidy for loans, as proposed by HB 78, was not a solution. 3:43:29 PM REPRESENTATIVE HERRON expressed his appreciation for the opportunity to hear testimony regarding incentives for medical providers and for the "possible passage of this bill through the House." 3:44:25 PM LIZ CLEMENT, Staff, Representative Bob Herron, Alaska State Legislature, directed attention to the latest proposed committee substitute. 3:44:51 PM REPRESENTATIVE DICK moved to adopt the proposed Committee Substitute (CS) for HB 78, 27-LS0147\I, Mischel, 3/2/11, as the working document. There being no objection, Version I was before the committee. 3:45:10 PM MS. CLEMENT emphasized the challenges to the health care workforce in rural and urban areas. She explained that proposed HB 78 offered incentives to attract certain medical providers to Alaska. She reported that 46 states had sponsored "support for service programs" and that many states had found these to be extremely beneficial for immediate alleviation of workforce shortages. She confirmed that research had indicated that loan repayment and incentive programs, similar to proposed HB 78, had been among the most effective methods for recruitment and retention of quality health care providers. She pointed out that medical providers could receive either loan repayment assistance or direct cash incentives. She pointed out that few states offered a direct cash incentive, which could attract recent graduates as well as experienced mid-career medical professionals. 3:47:22 PM MS. CLEMENT announced that the program would be administered by Department of Health and Social Services (DHSS) and allow for 90 participants each year, from 10 approved health care professions, which included dentists, pharmacists, nurse practitioners, and physical therapists. She reported that the various levels of loan repayment or financial incentive would be determined by community location and profession. She noted that these determinations would be in statute and monitored by DHSS. She pointed to the numerous letters of support [Included in members' packets]. 3:48:59 PM REPRESENTATIVE MILLETT asked for the definition to "a very hard- to-fill position." MS. CLEMENT explained that these would be designated by DHSS, based, in part, by the time necessary to recruit a provider for that position. 3:50:37 PM REPRESENTATIVE MILLETT asked if this would be determined by the DHSS commissioner. MS. CLEMENT agreed. 3:51:06 PM CHAIR KELLER suggested that a question to be asked would be for the determination of the criteria. 3:51:35 PM CHAIR KELLER opened public testimony. 3:51:49 PM DR. MARY LOEB, Medical Director, Sunshine Community Health Center, testified to the difficulty in filling key medical positions. She detailed that it was 18 months to recruit a dentist, 24 months to recruit a behavioral health specialist, and another 18 months to recruit for numerous provider positions. She stated that this would offer needed support for recruitment of qualified personnel. 3:54:02 PM NANCY DAVIS, Executive Director, Alaska Pharmacists Association, informed the committee that there were no public programs in Alaska to actively recruit and retain pharmacists. She reported that Alaska was one of only four states without a pharmacy school, so recruitment was the only method to obtain the necessary pharmacists. She testified that the 250 association members were in support of HB 78. 3:55:18 PM ELIZABETH RIPLEY, Executive Director, Mat-Su Health Foundation, explained that the Mat-Su Health Foundation was a non-profit organization, which invested into grants to improve the health and wellness of Alaskans living in Mat-Su. She detailed that one of the four strategies to reach the goal of becoming the healthiest borough in Alaska was to reduce the barriers to health care access, which included a lack of health care professionals. She directed attention to her letter detailing the recruitment experience and offering support for proposed HB 78 [Included in members' packets]. She acknowledged that all recruits reviewed opportunities before making a decision, as competition was quite robust. She pointed out that culture, climate, geography, and lack of amenities all combined to make recruitment even more difficult. She identified these as significant difficulties for recruitment in rural clinics and community health centers. She opined that the work force had numerous options throughout the United States, as 47 states had loan repayment programs. She stressed the necessity for a quality health care work force in the primary care settings in order to keep people out of costly acute care. She declared that an investment in loan repayment and direct incentive programs was a solid investment with a healthy return. She offered support of proposed HB 78. 4:00:26 PM MS. RIPLEY, in response to Chair Keller, said that the direct incentive programs were highly successful in other states. 4:01:24 PM REPRESENTATIVE SEATON, referring to page 3, line 22 of Version I, asked if the loan repayment differential between urban and rural health care professionals was adequate. MS. RIPLEY replied that although she was not specifically addressing the payment differential, it was adequate, but that urban hospitals had other tools to assist in recruitment. 4:03:17 PM JULIE MCDONALD, Pharmacist, shared her story of pharmacy school, and her consequent work history, and she reported that her student loans exceeded $200,000. She declared that costs were a major factor and that proposed HB 78 would be a powerful incentive to bring people here. 4:08:10 PM JIM TOWLE, Executive Director, Alaska Dental Society, shared a story of an inquiry from a person interested in dentistry in Alaska, but burdened with student loans, who expressed that incentives would influence her decision. He stated that these inquiries were not uncommon. He stressed that proposed HB 78 was a valuable incentive for recruitment. 4:09:49 PM REPRESENTATIVE SEATON asked if the loan repayment differential for urban and rural health care professionals was adequate. MR. TOWLE agreed that it was adequate. 4:10:23 PM RICHARD PECK, Board President, Iliuliuk Family and Health Services, Inc., stated that proposed HB 78 was necessary to attract and retain medical providers. He offered the support of the board for HB 78. 4:11:40 PM SHELLEY HUGHES, Government Affairs Director, Alaska Primary Care Association, shared that she had been a member of the stakeholders working group in 2008 looking for a solution. She emphasized that this strategy was "the best bang for the buck." She reported that nationally there was a shortage of physicians and Alaska was getting hit hard. She reported that it was expensive and difficult to recruit and retain, and even more so in rural areas. She relayed that the physician vacancy in tribal positions was over 28 percent, and the vacancy rate for other medical provider positions was over 35 percent. She stated that the medical directors from the Community Health Centers had relayed that applicants always inquired about incentive and loan repayment programs. She stated that the turnover rate for medical professionals was about three years. She remarked that the incentive and loan repayments would also complement the "grow our own" program, as Alaskans would return to Alaska. She compared the average loan debt to that of a mortgage. She pointed out that proposed HB 78 targeted people who were ready to work and, as there was not any pay until there was service, the return was 100 percent. She asked the committee to consider the costs of no action, as rural health care clinics generated revenue and were "economic engines." She opined that Medicaid costs would increase without additional medical providers in the bush. She pointed out that proposed HB 78 included a financial match so that the health care industry also had "skin in the game." She also noted that the Alaska Health Care Commission had recommended loan repayment and incentives as a strategy for increasing the medical workforce in Alaska. She directed attention to the wide spread support from all the medical industry sectors. 4:18:11 PM RHONDA RAYE, Physical Therapist, pointed out that there was not a physical therapy program in Alaska. She commented that a loan repayment program was a big incentive when searching for jobs. She spoke in support of HB 78. 4:20:29 PM REPRESENTATIVE HERRON asked if the financial incentive was enough to compete with other states, and he asked for a comparison with Alaska. MS. HUGHES, in response, said that the amounts were competitive, and she offered to report back with actual comparative numbers. She pointed to the importance of hiring experienced professionals in rural locations. 4:22:11 PM REPRESENTATIVE HERRON asked to confirm that "a very hard to fill position" was not designated solely to rural areas. MS. HUGHES replied that it was based on the length of the vacancy and the difficulty for hiring. She offered her belief that this would tend toward smaller, more remote locations. 4:23:39 PM JUSTIN RUFFRIDGE, Pharmacist, reported that there was little opportunity for loan repayment from the State of Alaska, especially as there was not a pharmacy school in the state. He stated his support of HB 78. He offered his belief that HB 78 was a necessary component in order for Alaska to be competitive with other states. 4:24:56 PM KAREN PERDUE, CEO & President, Alaska State Hospital and Nursing Association, reported on the medical work force shortages in Alaska, noting that some professions in the urban areas were doing well. She relayed that hiring was cyclical in Alaska, and she opined that the hiring situation would worsen with shortages in both rural and urban areas. She pointed to specialist areas which were very difficult to fill. She offered her belief that proposed HB 78 would offer much greater help to smaller clinics and community health centers than to hospitals. She stated that health care was defined by the providers and the service to the patients. In reference to an earlier analogy by Chair Keller, she suggested that HB 78 was a replacement for the motor, not the tires. 4:29:03 PM CHAIR KELLER asked if HB 78 offered an appropriate incentive. MS. PERDUE replied that the bill was a good start. 4:30:04 PM PAT CARR, Chief, Health Planning and Infrastructure, Division of Health Care Services, Department of Health and Social Services, stated that HHSS had been following HB 78. 4:30:45 PM CHAIR KELLER asked what the determinater of success would be in 5 years. MS. CARR replied that an evaluation for measures of success would include increased access to care, with increased providers. She referenced HB 78 and detailed that, among others, the number of applicants, the enrollees, the geographical area, the length of vacancies, the employment patterns, and the enrollment of professionals would be included in the evaluation process. She pointed to other surveys, including the Behavioral Risk Factor Survey, which could also be used in evaluation. She summarized that a tracking tool to determine the dispersal of the funding and to measure any decrease in length of job vacancies would be necessary for the evaluation. 4:34:22 PM CHAIR KELLER asked if criteria needed to be developed for the selection of applicants. MS. CARR replied that the criteria were not yet available. She directed attention to a current HHSS repayment program which would act as a model, and noted that the advisory group would also make suggestions. 4:35:38 PM REPRESENTATIVE HERRON, referring to Version I, pointed to page 2, line [17], and stated concern with "a lifetime maximum period of 12 years." He asked for a better definition of "hard to fill," and if any of these professions would be eligible for hire with the State of Alaska. MS. CARR, reflecting on discussions about "a lifetime maximum period of 12 years," stated that support for retention should be extended to people returning to school for continued education. She stated that the time frame was still under advisement. In response to Representative Herron, she said that "hard to fill" could either be defined in statute or be added as a program regulation for the discretion of the advisory committee or the commissioner. 4:38:50 PM REPRESENTATIVE HERRON asked if a recipient of the incentives or loan repayments in HB 78 could work for the State of Alaska. MS. CARR replied that this had not yet been defined. She noted that some of the professional categories referenced in the bill were employed by the state, and that the state also had difficulty with recruitment of certain health care providers. 4:39:37 PM REPRESENTATIVE SEATON, referring to the lifetime maximum period of 12 years, asked about any limitations. MS. CARR offered her belief that the bill did not preclude an individual from staying in the same position for the entire time. She pointed out that, within the 12 year period, there were periods of application renewal. 4:41:16 PM REPRESENTATIVE SEATON reflected that the program had a 90 person enrollment maximum, but that there was not a priority for any new entrants. MS. CARR, in response to Representative Seaton, said that this was not specified in the bill. 4:42:35 PM REPRESENTATIVE SEATON pondered whether the intent for the incentive program was to have someone receive payment for 12 years, if others were applying for the program. MS. CLEMENT, in response to Representative Seaton, said that more changes to HB 78 were forthcoming. 4:44:34 PM DELISA CULPEPPER, Chief Operating Officer, Alaska Mental Health Trust Authority, Department of Revenue, said that the Alaska Mental Health Trust Authority supported long term loan repayment and direct incentives and that these were important factors for workforce strategies. 4:46:03 PM MARIE DARLIN, Coordinator, AARP Capital City Task Force, directed attention to its letter of support for HB 78 [Included in members' packets]. She stated that HB 78 was important to increase the number of health care providers for seniors. She pointed out that proper medical care would allow seniors to remain in Alaska, and she noted that seniors provided an economic input of more than $1.5 billion to Alaska. 4:47:14 PM CHAIR KELLER closed public testimony. [HB 78 was held over.]