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.]