HB 229-HEALTH INFORMATION/DATABASE/PUBLIC CORP.  4:21:05 PM CHAIR SPOHNHOLZ announced that the final order of business would be HOUSE BILL NO. 229, "An Act establishing the Alaska Health Care Transformation Corporation; relating to an all-payer claims database; and providing for an effective date." 4:21:54 PM SANDRA HEFFERN, Project Coordinator, Alaska Healthcare Transformation Project, began by discussing the numerous efforts to address Alaska's health care system by the last three administrations. She noted the Alaska Healthcare Commission under the Palin administration that studied issues related to health care in Alaska and reported recommendations and activities to the legislature. The commission was defunded in 2015 and is no longer active. Additionally, under the Parnell administration there was a Medicaid taskforce in 2010, as well as a Medicaid reform advisory group in 2014. The purpose of those groups was to look at the stability and predictability in budgeting, increase the ease and efficiency of navigating the system by providers, and provide whole care for the patient by uniting physical and behavioral health treatment. She also mentioned SB 74, the omnibus Medicaid reform bill that was signed into law in 2016 during the Walker administration. She said that while there have been incremental improvements, the Anchorage Economic & Development Corporation found that since 2010 the rising cost of employee health has been reported as the number two issue in hindering business growth. Furthermore, the cost of health care in Alaska continues to be close to the most expensive in the U.S. She reported that the per capita spending on health care is higher than other high-income countries, which could lead one to believe that Alaska has some of the highest health care costs in the world. MS. HEFFERN directed attention to her PowerPoint presentation, entitled "Alaska Healthcare Transformation Project." She informed the committee 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 (slide 2). The project management committee consists of 7 people, including Representative Spohnholz and Senator von Imhof. The committee's role is to provide overall direction, guidance, and support to the project, and to monitor it to ensure successful delivery of expected outputs and outcomes within the scope and budget (slide 3). 4:27:20 PM REPRESENTATIVE FIELDS asked how many of the project management committee members' employers have endorsed the current version of HB 229. MS. HEFFERN replied that both the Mat-Su Health Foundation and the Alaska Primary Care Association support HB 229. 4:28:31 PM REPRESENTATIVE STUTES asked if HB 229 is meant to be a precursor to health care reform. MS. HEFFERN said to effectuate change within Alaska's health care system with a small population, it will require looking at the entire health care system rather then just one siloed area, like Medicaid. REPRESENTATIVE STUTES questioned whether the intent of this project is to reform the health care system to work more efficiently. MS. HEFFERN answered yes, the focus is to look at the entire health care system instead of focusing only on one area. CHAIR SPOHNHOLZ clarified that the Alaska Healthcare Transformation Project's effort is to transform the entire health care system; however, the all-payer claims database (APCD) will not necessarily do that work. She reiterated that they are discussing two separate topics. 4:31:16 PM MS. HEFFERN resumed her presentation. She related the projects vision, which is to improve Alaskan's health while also enhancing patient and health professional's experience of care and lowering the per capita health care growth rate (slide 4). The project's guiding principles are to focus on improving individual and population health, consider health coverage with common basic benefits for all, focus on whole person and integrated systems of care, use evidence-based practices, and recognize the effect of social determinants of health (slide 5). She went on to paraphrase slide 6, the project's goals, which read as follows [original punctuation provided]: Healthy Alaskans:  ? The percentage of Alaskan residents with a usual source of primary care will increase by 15% within five years Healthy Economy:  ? Reduce overall per capita healthcare growth rate to the greater of 2.25% or CPI within five years Everybody's Business: ? Align all payers, public and private, towards value- based alternative payment models with streamlined administrative requirements within five years MS. HEFFERN directed attention to a graph on slide 7, entitled "Alaska Healthcare Per Capita Growth Rate." She stated that from 1991 to 2014 the health care cost growth rate was 7.8 percent in Alaska compared to 6 percent in the U.S., indicating that medical prices in Alaska are growing faster than in the rest of the country. The Alaska Healthcare Transformation Project narrowed its focus to five strategy areas: increasing primary care utilization, coordinating patient care, changing the way health care is paid for in Alaska, increasing data analytics capacity, and addressing social determinants of health (slide 8). The project gathered a strategy development team that decided to assemble the previous work that had been done in Alaska. Slide 6 highlights the research compiled by the NORC, which read in its entirety as follows [original punctuation provided]: Meta-Analysis. Identify and assess a group of Alaska-focused reports and studies issued over the past decade (2008 to the present) that focus on delivery system reform related to the triple aim of improved health, improved quality of care and experience with care delivery (for patients as well as the health care workforce), and reduced per capita costs. Alaska Historical Project Scan. Identify and assess selected delivery system reform experiments in Alaska over the past decade (2008 to the present), with priority to characterizing regional innovation within the state. National Scan. Develop case studies for selected states where delivery system reform relevant to Alaska's five key topics of interest offers lessons for prospective innovation. Drivers of the Health Care Costs and Spend in  Alaska. Review health care spending in the state and the prospects and limitations of available data sources that would support a fine-grained analysis of cost drivers relevant to these reforms. Based on this review, prepare a set of estimates of potential reform-related savings and a draft roadmap with proposed short-term (within one year) and long-term steps that comprise one or more pathways to reform. MS. HEFFERN reported that they narrowed eight NORC recommendations down to three areas: set multi-payer goals for value-based payment using the Health Care Payment Learning Action Network framework; develop the details, parameters, and build consensus around the collection of cost and quality data and ensuring sufficient analytic capacity to effectively analyze and use the data; and determine the structure and responsibilities of leadership governance (slide 10). From those recommendations, she said, they decided to consider an all-payer claims database (APCD). The recommendation was to develop a corporation that was connected to state government while remaining dependent of state government. She stated that the result is HB 229. In closing, she said Alaska is not alone in its efforts to collect, analyze, and report health care data. Nationally, people are trying to get a handle on the cost of health care and an APCD is one of the ways to do that. She added that President Trump issued an executive order in June 2019, with the focus on improving price and quality transparency in American health care. 4:43:14 PM MS. HEFFERN said, in closing, there are states in the process of transforming or reforming their health care system that have utilized their health care cost data to set a statewide growth rate, which can't be done without data. She reiterated that the recommendation for establishing an APCD would require a trusted entity so all parts of the health care industry would support the information and the story that the data is telling. 4:44:28 PM REPRESENTATIVE HANNAN asked where Mark Foster derived the data for his study, which found that Alaska has spent $8.5 billion on health care. MS. HEFFERN said she can provide a copy of that report, which cites all his references. She added that it further supports the need for an APCD. 4:45:54 PM REPRESENTATIVE FIELDS questioned whether the project has performed an analysis to find the percentage of rising health care cost that is related to Alaska's aging population. He offered his understanding that it's the most rapidly aging population on a per capita basis in the country. MS. HEFFERN replied they couldn't get to that level of detail because they couldn't get their hands on the data. REPRESENTATIVE FIELDS questioned whether it's possible to establish an all or most-payer claims database with or without a corporation. MS. HEFFERN opined that an APCD could be established in several different ways. Other states have done it through an office of financial management, division of insurance, healthcare authority, and a nonprofit organization. The issue is finding a trusted entity that everyone in the state will trust to produce accurate and fair data that won't be used against them. REPRESENTATIVE FIELDS asked how many states have a something like the project's proposed corporation that has regulatory power. 4:48:27 PM NORM THURSTON, Executive Director, National Association of Health Data Organizations, addressed questions from the previous bill hearing. First, he said of the 10 smallest states by population, four of them have all-payer claims databases. He noted that this has traditionally been a movement coming out of the smaller states and into the larger states. Second, he said states that have a good relationship with the business community tend to do very well, some getting upwards of 30-40 percent of businesses to participate voluntarily. He said it's not unreasonable to think that a state like Alaska could easily be at 60 percent of its population with the possibility of going much higher. 4:50:53 PM REPRESENTATIVE STUTES asked of the states that participate in all-payer plans, how many have shown quantifiable savings in their medical expenses. MR. THURSTON stated it's a difficult question to answer because data is collected, analyzed, and released, followed by the cost - not decreasing - but increasing less rapidly, which is bending the cost curve down. He approximated that one-third of the participating states have had a major strategic effort to use the data to bend the cost curve with varying degrees of success. 4:52:23 PM REPRESENTATIVE FIELDS inquired as to how many states have corporations with regulatory power that manage their all-payer claims databases. MR. THURSTON said he does not know. He noted that Colorado has an independent regulatory agency that has the ability to make rules of its governance. Mr. Thurston informed the committee that he is a legislator in Utah, adding that most of the APCDs can regulate within their sphere to set standards for data submission and enforce compliance. REPRESENTATIVE FIELDS asked how many of the 20 states manage their APCDs through some entity within state government versus a standalone corporation. MR. THURSTON approximated that half of them are embedded in a state agency, while the other half do something else. REPRESENTATIVE FIELDS asked how much it costs those states with a standalone corporation. MR. THURSTON recounted from his experience in Utah that the core operations of a database costs roughly $600,000. He added that the database costs the same regardless of the population. He said it would be consistent as a fixed cost of operations. 4:56:36 PM REPRESENTATIVE HANNAN inquired as to the first state to have an APCD. MR. THURSTON offered his belief that Maine and Massachusetts were the pioneers. REPRESENTATIVE HANNAN questioned whether APCDs have addressed policy issues related to people leaving a jurisdiction for medical cost reasons. MR. THURSTON said he is not aware of any state where that has been a policy priority. 4:59:03 PM REPRESENTATIVE FIELDS asked of the 20 states with an APCD, which is most similar to Alaska in the sense that there are a low percentage of people with private health insurance plans and a high percentage of residents on IHS health care, tri-care, and Medicaid. MR. THURSTON answered New Mexico. 5:00:52 PM REPRESENTATIVE STORY asked what the framework is for creating an APCD within a state department. MR. THURSTON explained that the Utah APCD is a bureau within the Utah Department of Health. He said it's a sister agency to the Medicaid agency and is set up with a bureau director that reports to a division director. He said Utah's APCD is the quintessential example of an APCD embedded within the government. He added that most of the work is done by a contracted vendor, leaving the [Utah] Department of Health to focus mainly on project management. REPRESENTATIVE STORY asked how much that costs. MR. THURSTON said the contracted cost for an outside vendor is roughly $400,000 per year. Furthermore, there's the agency staff to manage the contract and analyze the data. 5:02:50 PM CHAIR SPOHNHOLZ asked if there are other states that have put their APCD within another agency like, for example, the Division of Insurance. MR. THURSTON said in Arkansas they developed everything in the Arkansas Center for Health Improvement, which is part of the state government. He noted that Arkansas doesn't do any contract outsourcing at all. CHAIR SPOHNHOLZ asked for the advantages and disadvantages of both routes. MR. THURSTON explained that the advantage of using an outside vendor is that the technology already exists, which makes it easier to set up. He added that the analytics tools that an outside vendor offers will be much more powerful than a state could develop on its own. The disadvantages of working with an outside vendor is the lack of stability. REPRESENTATIVE FIELDS asked if there is a consistent time lag in the data. MR. THURSTON stated that most states now have monthly submission processes, so claims that were processed in January would be submitted to the APCD by February 15th. Subsequently, by the end of March, the January payments should be available in a preliminary format. He noted that the lag is not as big on the data collection and processing site as it is on the claim payment site. Most states allow claims to be submitted for payment up to one or two years after service is rendered. He added that any service provided in October would be ready for examination in six months. 5:07:35 PM JOHN CULLEN, MD, Valdez Medical Clinic, LLC; Board Member, Alaska Academy of Family Physicians, stated that the American Academy of Family Physicians is in favor of an APCD. He reported that he has seen it work in practice, adding that it's a necessary step towards health transformation. He said that family physicians have a strong interest in reducing the cost of health care for their patients. He noted that other states have had success with mandatory primary care investment. He offered his belief that creating an APCD is a necessary first step in figuring out why the cost of health care is so high. 5:11:29 PM REPRESENTATIVE FIELDS surmised that much of the high cost of health care in America is related to federal policies that allow "big pharma" to consistently rip people off and private health insurers that have higher administrative costs compared to Medicaid, for example. He questioned what is within the state government's control versus what is outside its control at the federal level. He asked where the relative opportunities for achievable cost saving rests. DR. CULLEN opined that the reason America's health care is so expensive is due to pharmaceutical costs, administration costs, and high-volume/high-cost procedures, like MRIs and CT scans. He said from a primary care perspective, having and APCD that could provide information on which of those procedures are excessively expensive could help them better choose the right providers for their patients. He added that the administrative and pharmaceutical costs are controlled at the federal level. REPRESENTATIVE FIELDS expressed interest in state innovation regarding high drug prices in the context of this conversation. CHAIR SPOHNHOLZ noted that Alaska's health care costs have grown significantly more than the rest of the country. She said it would be difficult to argue that those are completely driven by the federal government. She pointed out that Alaska adopted several rules that were designed to incentivize increased access to specialty care by allowing specialists to increase their rates, which has increased access to Alaska for specialists, like cardiologists and pulmonologists, while also growing the cost of health care in the state. 5:15:35 PM LAURA YOUNG, Executive Director, HealtheConnect Alaska, explained that HealtheConnect is the health information exchange for the state of Alaska that was set up under SB 133 and has been in operation since 2013. The organization is public, nonprofit, and independent and has a similar structure and governance as the "health care transformation corporation" that is being proposed. HealtheConnect collects and exchanges real time clinical data versus claims data. She said it's their believe both efforts should be complementary. She further noted that they've set standards for how data is collected and exchanged and established privacy and security requirements. To conclude, she offered her belief that "the independent, neutral organization of such an effort is really critical rather than aligning it to any one entity or agency is crucial for keeping the data neutral." 5:18:19 PM [HB 229 was held over.]