SB 300-HEALTH CARE: PLAN/COMMISSION/FACILITIES  5:21:07 PM CHAIR DAVIS announced the consideration of SB 300. 5:22:48 PM SENATOR THOMAS joined the meeting. DON BURRELL, Staff to Senator Davis, read the sponsor statement into the record as follows: The Alaska Health Care Strategies Council, established by Governor Sarah Palin, met during the 2007 Legislative Interim to set long term goals for the health care of Alaskans. During the Legislative Interim these legislators, health care professionals, and committed citizens of Alaska provided seven clearly delineated goals for 'Making Alaskans the healthiest people in the nation.' Among the Council's top recommendations, Senate Bill 300, sponsored by the Senate Health, Education, & Social Services committee, would establish the Alaska Health Care Commission to develop policy recommendations and oversee the newly formed Health Care Information Office. The Alaska Health Care Commission would also oversee the database and website implementation regarding health care and healthy living in Alaska. The commission would be comprised of 15 members including Alaska health care providers, a small business owner, state officials and public members. Chaired by the Medical Director of the Department of Health & Social Services, the Alaska Health Care Commission would meet regularly, establishing specific goals designed to promote the health and well being of the citizens of the State of Alaska. SB 300 will also establish the Alaska Health Care Information Office and related database Internet sites to provide transparency to the Alaska Health care industry for health care consumers. The information provided by the Alaska Health Care Information Office would be consistently updated as specified in the bill. These two functions of the bill will provide the citizens of Alaska a great avenue for choosing health care for themselves and their families. It is with Alaskan citizens in mind that your consideration and passage of this bill to the next committee of referral is requested. 5:24:12 PM CHAIR DAVIS said this bill had taken Sections 1 and 2 from SB 245, addressing only the commission and the database system. She noted that this would be the first time it had been heard in committee so she would like to hear any questions or concerns from the committee; she intended to bring it back on the following Friday under previous bills heard. SENATOR ELTON said he'd like to discuss the effective dates. Discussion on the previous bill indicated there were stress points from effective dates just over the horizon; in this bill, the effective date for Section 2 was July 1, 2013. CHAIR DAVIS interjected that the 2013 date was actually the sunset date of the commission. The effective date for establishment of the commission was July of 2008. SENATOR ELTON understood that, with regard to the information office component, an aggressive effective date could be problematic for the department. SENATOR DAVIS said she could have the department speak to that. She also recollected that in one version of the bill, establishment of the database would be in 2009 and the effective date [of the commission] in 2008. 5:27:30 PM MR. BURRELL responded that those dates were still in the current bill. On page 9, line 5, under Mandatory Reporting, the effective date of mandated reporting was July 1, 2009. page 11, line 26, Sec. 7 was the sunset date for the Alaska Health Care Commission; line 28, Sec. 9 was the effective date for the Alaska Health Care Commission. 5:28:02 PM SENATOR ELTON queried how Section 2, the reference on page 11, line 26, sunsetted anything. MR. BURREL said the drafter, Jean Mischel, was on line and could answer that. CHAIR DAVIS said Jean Mischel should be able to walk them through it; those were the requested dates. SENATOR ELTON said that on page 11, lines 17-18 did say that some of the statutory provisions were repealed, but line 26 seemed to indicate that Section 2 did not take effect until July 1, 2013. CHAIR DAVIS said Jean Mischel would have to address that. SENATOR COWDERY asked if Chair Davis intended to work on this bill during the summer. CHAIR DAVIS said no, she intended to pass it during this legislative session. 5:30:14 PM JEAN MISCHEL, Attorney at Law, Legislative Legal and Research Services Division, Legislative Affairs Agency, replied that Section 2 simply removed the reference to the commission at sunset in 2013, causing existing law to revert to the way it was before the Act. She agreed that it was confusing, but explained that Section 1 added a cross reference to the Alaska Health Commission to the duties of the department; Section 2 removed that cross reference on the sunset date in 2013. SENATOR ELTON said it would be helpful if someone from the hospital association would chime in and tell the committee whether this bill addressed the concerns they had expressed earlier. 5:32:04 PM ROD BETIT, CEO, Alaska State Hospital and Nursing Home Association (ASHNH), said the association could support the language in this version of the bill [CSSB 300 Version \O]. It addressed the time lines, making it clear that July 1, 2008 was the beginning of a long journey in terms of trying to understand what health care information would be helpful to consumers, and putting that into a user friendly web format. He admitted that the July 1, 2009 date as a starting point to actually begin loading information into the system was still very ambitious; but information was already being provided to the department that could be made available and added to as the site evolved. CHAIR DAVIS opened the meeting to public testimony. 5:33:40 PM MARIE DARLIN, Coordinator, AARP Capital City Task Force, said the task force had submitted a letter of support for SB 300. She said they would have preferred to have the three issues that were addressed in the original bill separated into three distinct bills; however since CON had been dropped, they were able to support this version. With regard to establishment of the commission, she questioned whether the Governor ought to be making so many of the appointments. They were confident that the information office would be very helpful in making the marketplace more competitive by spotlighting information on the cost and quality of services to the public. 5:35:57 PM DON KUBLEY, Lobbyist, Mat-Su Regional Hospital, thanked the committee for their time and effort in the area of health care and expressed support for SB 300. 5:37:53 PM DR. TODD CURZIE, Treasurer, Alaska Chiropractic Society, said the Society had reviewed SB 245 and SB 300 and were generally supportive of the idea of a health planning commission. They were concerned about the composition of the committee; both bills provided seats for 3 public members from the health care community, one representing physicians. State statute designated 3 classes of primary physicians: Allopathic, Osteopathic and Chiropractic. If all of the physicians appointed to the committee were Allopathic, they were not confident that chiropractic patients would be well represented. They proposed the bill be amended to seat a chiropractic physician as a member of the commission. 5:39:37 PM KARLEEN JACKSON, Commissioner, Department of Health and Social Services (DHSS), said they would like the Governor's Health Care Transparency Act to pass; if that was not possible, they would support this bill as a vehicle to help them with these two components [Alaska Health Care Commission and Alaska Health Care Information Office]. CHAIR DAVIS announced that she would like to propose an amendment to SB 300 and had distributed copies to the committee. 5:40:50 PM DON BURRELL, Staff to Senator Davis, said the amendment would add the phrase "relating to a certificate of need study;" to the title starting on page 1, line 2 of the bill. The title would then read: "An Act establishing the Alaska Health Care Commission and the Alaska Health Care Information Office; relating to health care planning and information; relating to a certificate of need study: and providing for an effective date." This would require the commission to conduct a study of the CON and come up with recommendations for regulatory and statutory changes. 5:42:29 PM SENATOR THOMAS pointed out that the new verbiage was actually inserted as the second information in the title [after the phrase "relating to health care planning and information;"]. He also suggested that they discuss a timeframe for bringing the results of that study to the legislature. SENATOR ELTON said that as he read the title, it now had three components: 1) establish the Health Care Commission and the health care information office, 2) relating to health care planning and information, and 3) providing for an effective date. He assumed they wanted the Health Care Commission to do the contracting, and wondered if the title change was in the right spot. 5:44:08 PM MS. MISCHEL, responded that Senator Thomas was correct. It was a stand-alone phrase that appeared after "information;" and was a generic reference to put people on notice that the Certificate of Need study was also in the bill. The title change did not reference who would conduct the study or modify the first phrase in the title. page 1, lines 6-11 of the amendment inserted the study into uncodified law for the end of the bill, just as the House version had done; but it placed the authority to conduct the study with the Health Care Commission itself. She agreed that they could certainly add a time frame for that study. 5:45:37 PM SENATOR ELTON noted that another part of amendment went to page 11 and wanted to verify that it was just renumbering to accommodate the addition of an earlier Section. CHAIR DAVIS said that it was. 5:46:13 PM SENATOR THOMAS said he would be willing to add a timeframe if someone could suggest what an appropriate time would be to complete such a study. 5:46:36 PM SENATOR DYSON joined the meeting. CHAIR DAVIS explained that she had not included a time frame for that very reason, because she was not sure how long it would take. She chose to leave it open-ended and let the commission make the determination. SENATOR THOMAS said he could accept that, but conjectured that it would be done more timely if a date was specified. CHAIR DAVIS proposed they set a starting date rather than a date for completion. MS. MISCHEL said the effective date of the bill as drafted, July 1, 2008, would apply to this section. 5:48:16 PM SENATOR THOMAS asked if Ms. Mischel meant the effective date of the bill determined the starting date of the study. MS. MISCHEL said yes. It established the Health Care Commission and included the mandate that they contract for a study as of July 1, 2008. What was not included was when the report would be due to the legislature, or any end date other than the sunset date for the commission itself. 5:49:48 PM SENATOR ELTON surmised that this might change the fiscal note dramatically. COMMISSIONER JACKSON said it would change the fiscal note; it also assumed that the commission would be up and running before they could contract for the study. CHAIR DAVIS wondered how they would determine the amount of the new fiscal note. COMMISSIONER JACKSON said she could provide that information to the committee when they met next to consider the bill. SENATOR ELTON said he understood that a negotiated regulation process by a group of stakeholders had already begun studying the CON. He asked Commissioner Jackson what she thought the best process would be: continue the negotiated regulation process involving the stakeholders, begin an independent study, or both. COMMISSIONER JACKSON replied it would depend on what the study was trying to accomplish. If the study was intended to determine what should happen with the Certificate of Need program in Alaska, the committee had heard volumes of testimony both pro and con from many experts, and that would be part of the body of knowledge already out there. The Certificate of Need Task Force had met and come up with some definitions that would also be part of that body of knowledge. She expected all of that would be taken into consideration, but she would not presume that the providers who came together for the negotiated rule-making task force would necessarily have the time and energy to do all of that work on their own; she presumed they would need a contractor to put the existing knowledge together in a report and recommendation. 5:53:09 PM SENATOR THOMAS reflected that this could be discussed forever; but maintained that if they got someone with no dog in the fight to evaluate the existing information, (s)he should be able to provide a recommendation rather quickly. He reiterated that he did not see why it should take more than a year to bring that report to the legislature; because legislature would not be in session July 1, 2009 however, they would probably have to make it an 18 month study to bring the due date to January 2010. COMMISSIONER JACKSON responded that the sticking point was going to be how quickly the commission could get up and running, and that would depend in part on who was responsible for assigning people to that commission. If the Governor was making the appointments that would be one thing; if legislators were also appointed from each body, the time line would have to accommodate them. Once the commission was operational and the contract in place, she agreed that it should not take very long. SENATOR THOMAS speculated that 18 months would allow 4 to 5 months to get the commission going and a year to complete the study, which should be plenty of time. COMMISSIONER JACKSON agreed and said she hoped they could do it quickly, but reiterated that a lot depended on getting that commission up and running. 5:55:44 PM CHAIR DAVIS did not want to add a timeline to the amendment. SENATOR THOMAS asked if they had adopted the original bill. CHAIR DAVIS said they had not. SENATOR THOMAS moved to adopt SB 300, Version \A the as the working document of the committee. There being no objection, the motion carried. SENATOR THOMAS then moved to adopt Amendment 1 to SB 300, Version \A. There being no objection, the motion carried. 5:56:56 PM SENATOR ELTON objected. He said that he was trying to find the most polite way possible to voice his concern and hoped he had been successful; in charging the Health Care Commission to do this work, the Governor had made it very clear what she wanted to happen with the CON. She had made it so clear that she was not willing to negotiate a position in the middle. He pointed out that this commission was a commission of 15, 11 of whom would be appointed by the Governor. He would rather have the program reviewed by the stakeholders, who were customers of the state and the program, than by a commission, most of whom were appointed by the Governor who had made very clear what she thought the outcome should be. He said he was also uncomfortable doing this without any idea what the cost would be. CHAIR DAVIS said it was true that many of the members would be appointed by the Governor, but the study would not be done by the commission. She stressed that they had been discussing the matter for years without coming to any conclusion; it had to be done by another body. She was not sure how they could come up with a cost however, and suggested they set an outside limit. SENATOR ELTON said was not sure either, but reiterated that 11 out of 15 of these people would be appointed by Governor. He remembered the expert witness hired by the department, the first person to testify on the Governor's bill on her behalf, who he felt did not have a good perspective and could not see any shades of gray in a very important discussion. His concern was that, because the Governor hadn't shown any flexibility on this, that person could be the contractor if the Governor wanted and she had 11 votes on the 15 member commission. 6:00:58 PM SENATOR DYSON agreed the issue was convoluted and the lines were firmly drawn in the sand; he hoped this study would get down to the fundamental issues. Much of the problem was driven by the actions of government, which had told many of the providers, particularly the hospitals, that they must take everybody who came in the door, knowing that a significant portion of the cost of their care would not be recovered. That forced the providers to shift costs; other patients and/or their insurers ended up paying the cost for the indigent in kind of a shell game. He was clear that he was not saying they should not offer services to those people, but that this had put the health care providers in an untenable position. SENATOR DYSON continued that if the legislators as representatives of the public, and the public decided to provide some kind of health care to indigents, then that should be paid for from the tax base and not forced on the care providers. He noted that everyone he had heard supporting the existing or even a modified CON process, agreed that they had to maintain it and continue offering those services on which they could make a profit in order to support the areas in which they were doing, for want of a better term, charity work. He hoped this commission and this study would point that out and rub their noses in the fact that this was an unfunded mandate by government and one that government should accept. He said that he did not know this Governor's intention but sensed a cannon shot across their bow. That's why he thought having the commission deal with it would be a good thing; but he appreciated Senator Elton's concern about the Governor "stacking" it. He was worried about the composition being too heavy with care providers whose fiscal life was on the line as well. He thought that perhaps they should require the commission to submit recommendations and let this committee decide who would conduct the study, or let Legislative Council choose. In summary he said he appreciated Senator Elton's dedication to getting this dealt with in a fair and straight way with all the cards up on the table. Almost everybody that testified had a pretty big, rabid dog in the fight, and it was all spun information, with all due respect. 6:05:36 PM CHAIR DAVIS added that both Senators Elton and Dyson had made her think about more than just passing her amendment at this time. She would like to know the approximate cost to do that. She also liked the idea of having the commission bring back recommendations for legislative approval of who whould conduct the study. So rather than voting on the amendment as offered, she proposed writing up another to replace it and withdrawing the motion on the floor. 6:06:35 PM CHAIR DAVIS withdrew Amendment 1, \A.1 SENATOR DYSON said he would like to see this whole process finished by the time they reconvened in January. He pointed out that the packets distributed by Mr. Burrell contained some communications that raised significant questions, and asked if those had been discussed. CHAIR DAVIS replied that they had not. SENATOR DYSON said some of them seemed to contain important detail, so he would like to review those and get some answers. SENATOR THOMAS asked if everyone was looking at the same fiscal note, the contractual aspect of the fiscal note in the period of 2009-2013. He pointed out that was in the range of $250,000 for each of those 5 years for contractual work alone. The total was $750,000 in the first year and $660,000 in each of the other 4 years; so it was over $3 million during the 5 year period. He thought that should be enough. CHAIR DAVIS reiterated that she was going to come back with another amendment on Friday. She asked if there were other concerns or issues regarding SB 300 to be addressed at this time. She held SB 300 in committee.