Legislature(2015 - 2016)CAPITOL 106

01/27/2015 03:00 PM House HEALTH & SOCIAL SERVICES

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03:02:30 PM Start
03:03:03 PM Presentation: Department of Health & Social Services Tele-health Program
03:46:34 PM HB39
04:41:44 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
+ Department Presentations: TELECONFERENCED
Health & Social Services
-- Public Testimony --
         HB 39-PUBL EMPL HEALTH INS; WELLNESS COMMITTEE                                                                     
3:46:34 PM                                                                                                                    
CHAIR SEATON announced  that the next order of  business would be                                                               
HOUSE BILL  NO. 39, "An  Act establishing the  Advisory Committee                                                               
on Wellness;  and relating to  the administration of  state group                                                               
health insurance policies."                                                                                                     
Chair Seaton passed the gavel to Vice Chair Vazquez.                                                                            
3:47:26 PM                                                                                                                    
The committee took a brief at-ease.                                                                                             
3:48:31 PM                                                                                                                    
CHAIR  SEATON,  as  the  bill  sponsor,  introduced  HB  39,  and                                                               
paraphrased  from  the sponsor  statement,  which  read, in  part                                                               
[Included in members' packets]:                                                                                                 
     HB 39  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 percent per year.                                                                      
     HB 39  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.                                                                                            
CHAIR SEATON  directed attention  to Section  1 of  the Sectional                                                               
Analysis [Included  in members'  packets] and explained  that the                                                               
legislative findings  and the intent  language state that  we can                                                               
prevent disease  by lowering the  incidence of disease,  and that                                                               
prevention will slow  the rate of health care cost  in the state.                                                               
He referenced  House Concurrent Resolution 5,  passed unanimously                                                               
in  2011, which  called upon  the governor  to use  prevention of                                                               
disease  as the  primary model  of health  care by  making people                                                               
aware  of prevention  strategies, including  Vitamin D  use.   He                                                               
stated  that the  previous administration  had  not pursued  this                                                               
goal, but  he was hopeful  that the current  administration would                                                               
work toward  this.  He moved  on to Section 2  which required the                                                               
Department  of Administration  (DOA), to  the extent  legally and                                                               
reasonably  practical, to  implement the  recommendations of  the                                                               
Advisory Committee  on Wellness and reduce  the annual escalation                                                               
of health care costs to no more than 2 percent.                                                                                 
3:50:51 PM                                                                                                                    
CHAIR  SEATON   explained  that  Section  3   listed  these  same                                                               
requirements  to be  applied for  self-insurance and  excess loss                                                               
insurance.  In  Section 4, the Advisory Committee  on Wellness in                                                               
the Department  of Administration was established,  requiring the                                                               
DOA  to respond  within six  months to  the recommendations.   He                                                               
allowed that  there had been  an advisory committee in  the past,                                                               
but  there had  not been  any requirement  for accountability  to                                                               
address  the recommendations.    He pointed  out  that a  similar                                                               
panel, the Citizens Review Panel,  made suggestions to the Office                                                               
of Children's  Services in  the Department  of Health  and Social                                                               
Services.    The department  was  required  to respond  to  these                                                               
recommendations, and  it was  this accountability  structure that                                                               
he wanted  to duplicate in Section  4 of the bill.   The proposed                                                               
bill did  not mandate anything  except a wellness  committee that                                                               
would  make recommendations  to  DOA to  the  extent legally  and                                                               
reasonably practical  to lower the escalating  health care costs.                                                               
He allowed that he had focused  on Vitamin D and the many studies                                                               
that  showed its  ability to  prevent disease.   In  the proposed                                                               
bill,  this committee  would  be established  to  focus on  state                                                               
workers   and  retirees,   as  the   state   has  a   contractual                                                               
relationship  with them.   Directing  attention to  slide 2  of a                                                               
PowerPoint  presentation  titled  "HB 39  Prevention  of  Disease                                                               
Decreasing the  Alaska Healthcare  Liability," he  referenced the                                                               
huge estimated  annual growth in costs  for healthcare liability.                                                               
Moving  on to  slide  3, he  pointed out  that  $3.8 billion  was                                                               
related  to  the  unfunded liability  for  PERS/TRS  health  care                                                               
because  the  contribution  rates  had been  established  for  an                                                               
estimated 2 percent  annual growth in cost.  All  the cost beyond                                                               
this 2 percent was an unfunded  liability.  He opined that it was                                                               
possible  to keep  the growth  under  2 percent,  and this  could                                                               
eliminate  the $3.8  billion of  unfunded liability.   He  stated                                                               
that  there were  more  than 17,000  active  state employees  and                                                               
64,000 retired employees  and dependents covered by  the State of                                                               
Alaska health  care, slide 4,  "Why are we  here?"  Moving  on to                                                               
slide 5, "Alaska's Health-Care Bill:  $7.5 Billion and Climbing,"                                                               
he pointed to Government Employees,  Other, and Medicaid Expenses                                                               
as the  target areas for proposed  HB 39, pointing out  that more                                                               
than 60  percent of  health care dollars  were spent  on hospital                                                               
care,  clinical  services, and  doctors,  as  shown on  slide  6.                                                               
Moving on to slide  7, he asked the question:   "How can we avoid                                                               
disease  and prevent  illness  instead of  just  paying for  sick                                                               
CHAIR SEATON  directed attention to  slide 8, "Active  Plan," and                                                               
pointed  to the  studies  that  showed 66  percent  of the  total                                                               
grouping of  diseases directly related  to low Vitamin D.   Slide                                                               
9, "Retiree Plan,"  also reflected on diseases  with studies that                                                               
reflected responses related to low Vitamin D.                                                                                   
CHAIR  SEATON moved  on  to slide  10,  "Meta-analysis of  breast                                                               
cancer risk,"  which showed five  different studies  stating that                                                               
the  meta-analysis  showed  a  50   percent  reduction,  while  a                                                               
Grassroots Health  clinical trial  of women  above age  60 showed                                                               
there was a 75 percent  reduction for breast cancer, when Vitamin                                                               
D levels were 50ng/ml  or above.  On slide 11,  he noted that the                                                               
monetary  savings for  a 50  percent reduction  of breast  cancer                                                               
would  save more  than  $3  million annually,  and  a 72  percent                                                               
reduction of breast cancer would recognize a $4,355,000 savings.                                                                
3:59:48 PM                                                                                                                    
CHAIR  SEATON directed  attention to  slide 12,  "Meta-analysis,"                                                               
which depicted a  50 percent reduction in  colorectal cancer when                                                               
Vitamin D  levels were 34  ng/ml, even lower than  breast cancer.                                                               
Reviewing  the costs  on  slide  13, a  50  percent reduction  in                                                               
colorectal cancer would save about  $2 million each year.  Moving                                                               
on to  slide 14, "Type 2  Diabetes," a clinical trial  showed the                                                               
NHANES  (National Health  and  Nutrition  Examination Survey)  in                                                               
2006 showed the new incidence of  Diabetes to be 8.5 per thousand                                                               
people, whereas an average of 48  ng/ml showed an average of less                                                               
than 1  incident per thousand people.   He pointed out  that this                                                               
was a  90 percent reduction  in type 2  Diabetes.  He  pointed to                                                               
the cost savings, slide 15,  which reflected more than $4 million                                                               
in savings  with a  90 percent reduction,  and almost  $2 million                                                               
savings for a 38 percent reduction in Type 2 Diabetes.                                                                          
4:01:56 PM                                                                                                                    
CHAIR SEATON  moved on  to slides  16 and  17, and  discussed the                                                               
incidence of pre-term  birth in Alaska.  He shared  that March of                                                               
Dimes was working  on lowering the rate of pre-term  birth to 9.3                                                               
percent, while  an eight year  study in South  Carolina sponsored                                                               
by the  National Institutes  of Health  (NIH) suggested  that the                                                               
use of  Vitamin D could  reduce this to  7 percent, a  32 percent                                                               
reduction from the current rate in  Alaska.  He reported that the                                                               
savings in Alaska could be  about $1,300,000 per year.  Directing                                                               
attention to  slide 18, "Upper Respiratory  Tract Infections," he                                                               
allowed  that, although  not expensive  diseases, studies  showed                                                               
that   there  were   50  percent   fewer  infections,   including                                                               
pneumonia,  tuberculosis, flu,  and colds,  for those  who had  a                                                               
higher level of  Vitamin D.  He declared that  this could be very                                                               
significant  for  Alaska.    He  spoke  about  "inflammatory  gum                                                               
disease,"  slide 19,  reporting that  the body  protected against                                                               
most inflammation  by laying on  plaque, and pointed out  that 80                                                               
percent of  gingivitis was eliminated  in 90 days when  Vitamin D                                                               
use was more than 2000 IU/day.   He shared that, as heart disease                                                               
also started  from inflammation,  this study on  gingivitis could                                                               
be  a good  indicator of  how increasing  Vitamin D  levels could                                                               
save a lot on other diseases, as well.                                                                                          
4:06:22 PM                                                                                                                    
CHAIR  SEATON pointed  to  slide  20, "House  Bill  No. 39,"  and                                                               
focused on Section  2 of the proposed bill, slide  21, which read                                                               
in  part:    "to  the  greatest  extent  legally  and  reasonably                                                               
practicable..."   He  declared  that the  proposed  bill was  not                                                               
trying  to mandate  anything, instead  proposing to  move forward                                                               
with  better health  to help  lower the  annual rate  increase of                                                               
health care cost.                                                                                                               
4:06:54 PM                                                                                                                    
REPRESENTATIVE FOSTER stated  that he would like  to have someone                                                               
from his  district appointed to the  proposed advisory committee,                                                               
and asked how regions for the committee would be delineated.                                                                    
CHAIR  SEATON  replied  that  there was  not  any  guideline  for                                                               
regional appointments  and, as it  was a volunteer  position, any                                                               
interested persons would be welcome to apply.                                                                                   
REPRESENTATIVE  FOSTER,  in  reference  to  the  best,  new,  and                                                               
innovative practices,  asked for  suggestions on  how information                                                               
about  the  benefits of  adequate  Vitamin  D could  become  more                                                               
CHAIR   SEATON  clarified   that   the  aforementioned   wellness                                                               
committee  would be  at  least  seven members,  and  it could  be                                                               
expanded.   He suggested that  the proposed committee  could meet                                                               
telephonically, in order  to save travel expenses.   He expressed                                                               
his  hope  that   the  proposed  bill  would   engage  the  state                                                               
workforce.   He opined that public  recognition and understanding                                                               
for such a dramatic decrease in  a variety of diseases would lead                                                               
to an increased use of Vitamin  D.  He pointed out that, although                                                               
the federal government  already mandated that Vitamin  D be added                                                               
to milk  to aid in the  prevention of rickets, the  proposed bill                                                               
did not include any mandates.   He suggested that generating talk                                                               
in the communities,  villages, and town councils would  go a long                                                               
way  toward  broadening  the  education,  and  would  lead  to  a                                                               
healthier Alaska.                                                                                                               
REPRESENTATIVE FOSTER noted that  the proposed advisory committee                                                               
had a zero  fiscal note.  He  added that he would  tout Vitamin D                                                               
in his next constituent newsletter.                                                                                             
4:13:26 PM                                                                                                                    
REPRESENTATIVE  TARR  referenced  an existing  informal  wellness                                                               
committee within  DOA, and  she asked  if the  proposed committee                                                               
would transition this existing  committee toward more permanence.                                                               
She stated  that it  was obvious  how this  would work  for state                                                               
health  plan beneficiaries,  but  asked  how the  recommendations                                                               
from the wellness committee would influence Medicaid recipients.                                                                
CHAIR  SEATON, in  response to  Representative Tarr,  opined that                                                               
the current  informal committee had  been less active  over time,                                                               
as  there  was  not  any  formal  committee  report  or  response                                                               
necessary.    He compared  this  to  the effectiveness  from  the                                                               
Citizen  Review   Panel  report  to  the   Office  of  Children's                                                               
Services,  with its  requirement of  a  response from  DHSS.   He                                                               
offered his  belief that expensive recommendations  could come to                                                               
the committee, which  may not be possible  for the administration                                                               
and the  department to  utilize.  He  noted that,  however, there                                                               
could also  be huge benefits at  very little cost.   He offered a                                                               
few incentive  ideas, which  included a  co-pay and  agreement to                                                               
increase  Vitamin  D,  pointing  out that  ideas  which  did  not                                                               
require  a big  change  in  your lifestyle  were  much easier  to                                                               
4:17:54 PM                                                                                                                    
VICE CHAIR  VAZQUEZ declared that she  was a big fan  of wellness                                                               
and prevention,  and that she  was delighted to see  the proposed                                                               
bill  come before  the  committee.   She  asked  how  to get  the                                                               
concept  for  the  importance  of   Vitamin  D  to  the  Medicaid                                                               
population,  acknowledging  that  there  could  be  many  complex                                                               
issues.   She  suggested  that Legislative  Legal Services  could                                                               
offer guidance.                                                                                                                 
CHAIR SEATON  suggested that, as  the Alaska state  employees and                                                               
retirees addressed  in this  bill were almost  10 percent  of the                                                               
population, the Department  of Administration lowering healthcare                                                               
cost escalation  would be instrumental in  leading the Department                                                               
of Health  and Social  Services to take  this approach,  as well,                                                               
which is  where the  Medicaid population would  be impacted.   He                                                               
opined that other employers throughout  Alaska would also respond                                                               
to  any  savings.     He  directed  attention  to   a  study  for                                                               
presenteeism  and its  impact on  work productivity  [Included in                                                               
members' packets].                                                                                                              
4:22:27 PM                                                                                                                    
REPRESENTATIVE   TARR  suggested   that  care   coordination  for                                                               
pharmaceutical use  by Medicaid recipients in  other states could                                                               
be a model.                                                                                                                     
CHAIR SEATON  shared that many  of his constituents  had declared                                                               
appreciation for this information.                                                                                              
VICE  CHAIR  VAZQUEZ  added  that this  was  also  a  "compassion                                                               
REPRESENTATIVE   TALERICO   reported   that   an   Alaska   labor                                                               
organization  had  instituted  a wellness  policy  that  required                                                               
physical examinations, and that the  rate of co-pay was increased                                                               
if healthy attributes  were not attained.  He opined  that it was                                                               
necessary to improve the cost  effectiveness in order to continue                                                               
to  pay   for  services,  especially   during  times   of  budget                                                               
CHAIR SEATON  stated that it  was good  to have Vitamin  D levels                                                               
checked,  and he  shared that  DOA had  been more  receptive than                                                               
DHSS  in   the  recent  past   for  the  financial   impact  from                                                               
prevention.  He relayed that  soft tissue responded best to daily                                                               
doses  of Vitamin  D, which  only had  a 24  hour half-life.   He                                                               
noted  that  there  was  sufficient data  for  the  ingestion  of                                                               
various amounts  of Vitamin D, and  that it had been  shown to be                                                               
most effective for 83 percent of  the people to be above 40 ng/ml                                                               
of Vitamin D.                                                                                                                   
CHAIR  SEATON, in  response  to  Representative Foster,  directed                                                               
attention to page 2, line 24,  of the proposed bill, which stated                                                               
its goal  to slow  the escalation  of health  care costs  to less                                                               
than 2 percent annually by administering the policies.                                                                          
4:30:24 PM                                                                                                                    
REPRESENTATIVE  WOOL asked  for clarification  that the  proposed                                                               
bill would set up an advisory  committee on wellness to guide the                                                               
administration,  and that  this would  be enforced  through group                                                               
health  insurance   to  increase   the  overall  health   of  its                                                               
recipients.     He  asked  if   there  would  be   other  healthy                                                               
recommendations from the advisory committee.                                                                                    
CHAIR SEATON expressed his agreement,  noting that there could be                                                               
many simple solutions.  He  shared that previously there had been                                                               
a  focus  on exercise  as  a  solution.    He reported  that  the                                                               
aforementioned studies  were an example that  would allow numbers                                                               
and percentages to be put on  "this pretty simple and cheap thing                                                               
that we could do for Alaskans."                                                                                                 
REPRESENTATIVE  WOOL mused  that research  supported that  it was                                                               
necessary  to get  people to  take Vitamin  D daily  and maintain                                                               
that level, although  a big part of the issue  was to "get people                                                               
educated about it."                                                                                                             
CHAIR  SEATON   expressed  his  agreement  that   compliance  was                                                               
difficult, even  as the  Vitamin D studies  showed a  decrease in                                                               
fatigue, pain, and bone breakage.   He pointed to six new studies                                                               
which showed  that the rate  of dementia and Alzheimer's  was cut                                                               
in half with a  good level of Vitamin D.   He stated that sharing                                                               
this   information   in   newsletters  would   allow   a   better                                                               
understanding of the benefits, and would help with compliance.                                                                  
4:34:41 PM                                                                                                                    
Vice Chair Vazquez returned the gavel to Chair Seaton.                                                                          
4:34:56 PM                                                                                                                    
REPRESENTATIVE  FOSTER  asked  if   someone  from  Department  of                                                               
Administration would coordinate the proposed wellness committee.                                                                
MICHELE MICHAUD,  Chief Health Official, Division  of Retirements                                                               
and   Benefits,  Department   of  Administration,   replied  that                                                               
currently  there  was  a wellness  coordinator  who  chaired  the                                                               
committee,  and  she opined  that,  at  the least,  the  wellness                                                               
coordinator would  serve on  the committee, if  not serve  as the                                                               
chair.   In response  to Representative Tarr,  she said  that the                                                               
wellness newsletter  was sent electronically to  active employees                                                               
and posted  on Facebook for  the retired employees.   She pointed                                                               
out that  many retired  employees did  not use  electronic means,                                                               
and,  as  postage  was expensive,  the  department  was  somewhat                                                               
limited in the frequency for  its communications with the retiree                                                               
REPRESENTATIVE  TARR offered  to include  the information  in her                                                               
REPRESENTATIVE  VAZQUEZ  asked Ms.  Michaud  for  her opinion  to                                                               
consideration of  an amendment to  the proposed bill  which would                                                               
require an annual report be  sent to the Alaska State Legislature                                                               
from both the advisory committee and the DOA.                                                                                   
MS. MICHAUD  offered her  belief that this  would not  change the                                                               
fiscal note.                                                                                                                    
4:38:02 PM                                                                                                                    
CHAIR  SEATON  asked  if the  Department  of  Administration  had                                                               
reviewed the  proposed bill other  than for the fiscal  note, and                                                               
if so, was DOA supportive of it.                                                                                                
MS.  MICHAUD  said  that  DOA  supported  wellness  and  wellness                                                               
measures, but  there were  challenges to hold  under an  annual 2                                                               
percent cost growth.                                                                                                            
CHAIR SEATON clarified that, although  this was a goal, exceeding                                                               
the 2 percent was not a violation of the proposed statute.                                                                      
4:39:37 PM                                                                                                                    
CHAIR SEATON opened public testimony.                                                                                           
4:39:58 PM                                                                                                                    
CHAIR  SEATON,  in response  to  Representative  Foster, said  he                                                               
would  like to  hold  the  bill until  the  committee meeting  on                                                               
February  5, as  there would  be further  testimony for  lowering                                                               
health care costs.                                                                                                              
REPRESENTATIVE VAZQUEZ noted that  her research, while working on                                                               
her  MBA  in health  care  services  administration, showed  that                                                               
wellness programs were often very effective in cost savings.                                                                    

Document Name Date/Time Subjects
SDS Tele-Health Presentation_1-27-2015.pptx HHSS 1/27/2015 3:00:00 PM
HSS presentation
Continuum of Care_7 2014_Telehealth handout.pdf HHSS 1/27/2015 3:00:00 PM
HSS presentation
HB 39_Ver A.PDF HHSS 1/27/2015 3:00:00 PM
HB 39
HB 39 SponsorStatement.pdf HHSS 1/27/2015 3:00:00 PM
HB 39
HB 39 Sectional.pdf HHSS 1/27/2015 3:00:00 PM
HB 39
HB 39 supporting document_Mayo Clinic review.pdf HHSS 1/27/2015 3:00:00 PM
HB 39
HB 39 Supporting Documents_Background Materials by Seaton.pdf HHSS 1/27/2015 3:00:00 PM
HB 39
HB 39 Wellness Presentation.pdf HHSS 1/27/2015 3:00:00 PM
HB 39
HB 39 Support KPBSD.pdf HHSS 1/27/2015 3:00:00 PM
HB 39
HB039-DOA-DRB-01-21-15.pdf HHSS 1/27/2015 3:00:00 PM
HB 39