SENATE COMMITTEE ON HEALTH POLICY

 

 

February 28, 2005†††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† Hearing Room B

1:00 P.M.†††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† Tapes† 27 - 30

Corrected 9/29/2005

MEMBERS PRESENT:†††††††† Sen. Laurie Monnes Anderson, Chair

Sen. Jeff Kruse, Vice-Chair

Sen. Peter Courtney

Sen. Gary George

Sen. Bill Morrisette

 

STAFF PRESENT:†††††††††††††††† Rick Berkobien, Committee Administrator

Brittany Kenison, Committee Assistant

 

MEASURES/ISSUES HEARD:

Hospital Rate Regulation Ė Informational Meeting

SB 502 Ė Public Hearing

Panel discussion on hospital rate regulation and transparency Ė Informational Meeting

 

These minutes are in compliance with Senate and House Rules.† Only text enclosed in quotation marks reports a speakerís exact words.† For complete contents, please refer to the tapes.

 

TAPE/#

Speaker

Comments

TAPE 27, A

003

Chair Monnes Anderson

Calls the meeting to order at 1:04 p.m.† Opens an informational meeting on hospital rate regulation.

HOSPITAL RATE REGULATION Ė INFORMATIONAL MEETING

035

Robert Murray

Executive Director, Maryland Health Services Cost Review Commission.† Submits PowerPoint presentation on the Maryland Hospital Rate Setting System (EXHIBIT A).

040

John Colmers

Senior Program Officer, Milbank Memorial Fund.† Discusses the origins, history and operations for hospital rate setting in Maryland.

090

Colmers

Continues discussing the origins, history and operations for hospital rate setting in Maryland.

140

Colmers

Continues discussing the origins, history and operations for hospital rate setting in Maryland.

190

Colmers

Continues discussing the origins, history and operations for hospital rate setting in Maryland.

233

Chair Monnes Anderson

Asks who makes up the seven member commission for Marylandís Rate Regulation program.

235

Murray

Answers question.

243

Sen. Kruse

Asks if the memberís serve terms with the Governor.

245

Murray

Answers yes, they serve four year terms and are appointed by the Governor.

246

Colmers

Adds how the Governor can remove a member.

252

Sen. Kruse

Clarifies that the Governor cannot remove a member without cause.

255

Colmers

Affirms and states that it has never happened.

257

Sen. Morrisette

Asks to confirm that a consumer advocate is part of the seven member commission.

260

Colmers

States that he believes that there have not been a specific member as a consumer advocate and adds that there has been a labor leader.

265

Murray

Clarifies that there have been consumer advocates in the past and how positions can vary.

267

Sen. Morrisette

Comments that there should be a position for just consumer advocates.

270

Murray

Describes the background of the Governorís selecting well qualified citizens and how they bring their expertise to the commission.

275

Colmers

Discusses the benefits of having a smaller commission.

300

Colmers

Continues discussing the origins, history and operations for hospital rate setting in Maryland.

350

Colmers

Continues discussing the origins, history and operations for hospital rate setting in Maryland.

400

Colmers

Continues discussing the origins, history and operations for hospital rate setting in Maryland.

430

Colmers

Discusses operational dynamic for Marylandís hospital rate setting program.

TAPE 28, A

010

Sen. Morrisette

Comments on patients who owe tremendous amounts of money to hospitals.

015

Colmers

Discusses how Maryland hospitals set rates and that there is a provision for uncompensated care for people without health insurance.

030

Chair Monnes Anderson

Verifies that hospitals have different rate settings and that the commission works with each hospital.

035

Colmers

Affirms.† Provides further explanation.

045

Colmers

Continues to discuss operational dynamic for Marylandís hospital rate setting program.

055

Colmers

Continues discussion of the origins, history and operations for hospital rate setting in Maryland.

075

Sen. Kruse

Clarifies that commission regulates what the hospitals charge, but do not regulated what the physicians charge for services in the hospital.

077

Colmers

Affirms.

080

Sen. Kruse

Asks if that is the same with surgical centers.

082

Colmers

Answers that it depends on the location of the center and provides further clarification.

095

Sen. Kruse

Comments on the large cost from physicians and how they are not regulated in Maryland.† Asks how it is not an issue if it is unregulated.

097

Colmers

Answers that the physiciansí charges are 40 percent.† Notes that it is a big cost and provides further explanation.

120

Colmers

Continues discussion of the origins, history and operations for hospital rate setting in Maryland.

170

Colmers

Continues discussion of the origins, history and operations for hospital rate setting in Maryland.

200

Colmers

Review charts for cost per Equivalent Inpatient Admissions (EIPA) and hospital uncompensated care.

230

Chair Monnes Anderson

Asks Colmers to explain the chart again.

232

Colmers

Re-explains.

247

Sen. Morrisette

Asks if people with low incomes paying medical bills, receive time allowances.

250

Colmers

Explains how the commission designed a hospital incentive system.

260

Sen. Morrisette

Re-clarifies question.

265

Colmers

Answers re-clarification.

267

Sen. Morrisette

Confirms that there is nothing to preclude patients who are unable to pay medical bills, from the hospital filing a lien on their home.

271

Colmers

Answers no.

272

Sen. Morrisette

Explains that he is questioning the system to make sure that it is geared to helping people make payments.

274

Colmers

Comments on hospitals being able to pay for patients who cannot, so long as they are collect payments from patients that can.† Also comments that more people file for bankruptcy due to incurred medical costs.

278

Chair Monnes Anderson

Believes that in Oregon, 50 percent Ėplus or minus 5 percent- of the people who file for bankruptcy are due to medical care costs.† Asks witnesses if they know the percentage for Maryland.

283

Colmers

States that he does not, but adds that medical costs is the number one reason nationally for people who file for bankruptcy.

285

Colmers

Discusses hospital mark-up in Maryland.

335

Colmers

Continues discussion of hospital mark-up in Maryland.

373

Sen. Kruse

Asks for the percentage of business from Medicare and Medicaid in Maryland.

380

Colmers

States that Medicare is on the chart.

381

Sen. Kruse

Clarifies question.

385

Colmers

Defers to Murray.

387

Murray

Answers that in terms of revenue, Medicare is 45 percent, Medicaid is 13 percent, uncompensated care is 8 percent, and the balance is commercial.

398

Colmers

Review chart for Hospital excess profit margins in Maryland.

433

Sen. Kruse

Asks what would be under the category of unregulated activities.

435

Colmers

Provides examples.

443

Sen. Kruse

Assumes that Johns Hopkins Hospital in Maryland, receives a large amount of foundation money.

447

Colmers

States that like other academic medical schools, it is separated from the actual hospital.

457

Sen. Kruse

Asks how hospital foundations and fundraisers are categorized.

462

Colmers

Answers questions about regulated versus non-regulated categories.

TAPE 27, B

010

Colmers

Discusses how some of the hospitals in Maryland and around the nation, lost money with unregulated services.

013

Sen. Morrisette

Asks if they have examples of hospitals buying land around their facility and †leasing it out for profit.

020

Colmers

States that he cannot think of an example.

023

Colmers

Discusses the Medicare waiver in Maryland.

065

Sen. Kruse

Asks why West Virginia has had failure obtaining the Medicare waiver

070

Colmers

Answers that he does not know and speculates.

085

Sen. Kruse

Comments on the need to have the waiver to keep the system operating.

088

Colmers

Adds that waiver has kept the system in operation in Maryland.

105

Colmers

Provides overview of Marylandís hospital rate setting system.

140

Colmers

Discusses factors for political coalition and key success factors.

165

Sen. Kruse

Comments on problem with emergency rooms in Oregon and asks if it is addressed by the commission in Maryland.

173

Colmers

Answers that it is addressed within the commission and elaborates.

200

Murray

Begins discussing data and reporting with the rate setting system.

250

Murray

Continues discussion on data and reporting with the rate setting system.

290

Rick Berkobien

Committee Administrator.† Asks how healthcare professionalsí salaries compare.

296

Murray

Answers that there is variation and elaborates.

310

Colmers

Clarifies that Maryland is at the national average.

315

Murray

Discusses timeliness with data and reporting with the hospital rate system.

345

Murray

Discusses rate setting methodologies.

395

Murray

Continues discussing rate setting methodologies.

417

Sen. Kruse

Asks if there are general rates, Intensive Care Unit (ICU) for example, or if there are other structured rates within a department.

425

Murray

Answers that it is a general rate and provides a further explanation.

430

Sen. Kruse

Clarifies that no matter what they are in the hospital for, the rate is the same.

432

Colmers

Answers clarification.

450

Murray

Provides another example. Continues discussion on rate setting.

TAPE 28, B

003

Sen. Kruse

Confirms that it designed for patients to receive exams that are needed.

008

Murray

Defers to later section.

010

Murray

Continues discussing rate setting methodologies.

060

Murray

Continues discussing rate setting methodologies.

078

Sen. Kruse

Asks if there is a conflict between what the doctor prescribes and what the patients receives.

090

Murray

Explains what impacts the patientís quality of care.

105

Murray

Continues discussing rate setting methodologies.

155

Murray

Summarizes and concludes

160

Sen. George

Asks how the rate setting program compares to other states.

168

Colmers

Explains how that has never been compromise for quality of care.

172

Murray

Adds statistics on other states and elaborates.

180

Sen. George

Asks if Maryland considers rate adjustments.

185

Murray

Answer that it depends on the hospital and the issues involved.

195

Sen. Kruse

Ask why the waiver was cancelled.

203

Colmers

Speculates.

218

Sen. Kruse

Questions why the federal government is not allowing waivers anymore if it is saving them money.

220

Colmers

Explains that the waiver is still available.

225

Chair Monnes Anderson

Asks why other states stopped rate setting programs.

227

Colmers

Speculates.

231

Murray

Adds that New York stopped and speculates why.

236

Colmers

Comments on other states in comparison to Maryland.

253

Sen. George

Comments on Marylandís approach and asks if rate setting could be duplicated.

258

Colmers

Explains that the system was built for the state and that Oregon needs to design it best for Oregonians.

275

Chair Monnes Anderson

Closes informational meeting on hospital rate regulation and recesses meeting at 2:54 p.m.

TAPE 29, A

010

Chair Monnes Anderson

Reconvenes meeting at 5:34 p.m.† Opens public hearing on SB 502.

SB502 - PUBLIC HEARING

025

Rick Berkobien

Committee Administrator.† Explains the bill.

030

Lynn-Marie Crider

Service Employees International Union, Local 49.† Introduces herself.

040

Joe DiNicola

President, SEIU 503 Oregonís Public Employee Union (OPEU).† Submits and presents in support of SB 502 (EXHIBIT B).

090

Joe DiNicola

Continues to testify in support of SB 502.

100

Crider

Submits and presents written testimony to explain and provide support for SB 502 (EXHIBIT C).

145

Chair Monnes Anderson

Refers to sub section three (3) of SB 502.† Asks healthcare facility representatives would be not involved in the rate setting commission.

155

Crider

Answers question.

160

Crider

Continues to explain the bill.

190

Chair Monnes Anderson

Asks Crider to repeat where more clarification is needed.

192

Crider

Re-states the section.

195

Chair Monnes Anderson

Clarifies that that the intent of the bill is to cover the ambulatory surgical centers.

197

Crider

Responds yes.

200

Sen. Morrisette

Refers to lines seven (7), eight (8), nine (9), on page one (1) of the bill.† States that the section is not clear enough and it needs to be more specific.

204

Crider

Explains why the bill uses broad wording.

207

Sen. Morrisette

Again, states that the section could be clearer.

209

Crider

Continues to explain bill and address concerns.

230

Chair Monnes Anderson

Asks Crider to refer to line numbers instead of section numbers.

232

Crider

Continues to explain each section of the bill.

265

Berkobien

Asks if there will be extra provisions for the Oregon Health Policy and Research Office.

270

Crider

Answers, minimal.† Elaborates.

330

Crider

Provides recommendations of the bill.

380

Crider

Refers to list of recommendations in testimony.

410

Crider

Summarizes and concludes.

455

Maribeth Healey

Oregonians for Health Security.† Submits and presents written testimony in support of SB 502 (EXHIBIT D).

TAPE 30, A

015

Healey

Continues to discuss support of SB 502.

050

Steve Dixon

Oregon State Public Interest Research Group (OSPIRG).† Submits and presents written testimony in support of SB 502 (EXHIBIT E).

085

Martin Taylor

Oregon Nurses Association.† Testifies in support of SB 502.

125

Tim Nesbitt

Oregon American Federation of Labor Ė Congress of Industrial Organizations (AFL-CIO).† Testifies in support of SB 502.

160

Ellen Penny

Submits and presents testimony in support of SB 502 (EXHIBIT F).

230

Ken Rutledge

Oregon Association of Hospitals and Health System.† Submits and presents written testimony in opposition to SB 502 (EXHIBIT G).

290

Rutledge

Continues to provide reason for opposition to the bill.

340

Rutledge

Continues to provide reason for opposition to the bill.

390

Rutledge

Continues to provide reason for opposition to the bill.

420

Rutledge

Summarizes and concludes.

TAPE 29, B

003

Chair Monnes Anderson

Asks for the percentage of the costs from uninsured patients.

005

Rutledge

Provides percentages from 2002 and 2004.

022

Chair Monnes Anderson

Comments on hospitalís bad debt and the uninsured.† Comments that amounts are still too much Oregonians.† Adds that they want to find a program that works for Oregonians and cut costs that are being driven up.† Adds that SB 502 is a start and hospitals need to address how to cut costs.

047

Rutledge

Comments on current Oregon statistics.† Comments on rate regulations and the federal benefits Maryland receive.† States that cost drivers need to be addressed first.

095

Chair Monnes Anderson

Asks to confirm that the cost driver is from low reimbursement rates.

100

Rutledge

States that that is one of many.† Comments on other cost drivers.

135

Rutledge

Comments on per diem for Oregon and other states.

155

Chair Monnes Anderson

Closes public hearing on SB 502 and opens informational meeting for panel discussion on hospital rate regulation and transparency.

PANEL DISCUSSION ON HOSPITAL RATE REGULATION AND TRANSPARENCY Ė INFORMATIONAL MEETING

168

Murray

Discusses other features of the rate setting program in Maryland.

220

Colmers

States that Murray and himself are not testifying in support or opposition of SB 502, but to answer questions.† Comments on differences and similarities from Maryland to other states.

270

Chair Monnes Anderson

Refers to a previous comment by Rutledge on costs.† Asks if Maryland hospitals rates paid for themselves.

278

Colmers

Asks the Chair if she is referring to regulatory costs or the additional cost of Medicaid.

280

Chair Monnes Anderson

Answers both. Comments on higher reimbursement rates in Maryland then it is in Oregon.† Asks if a fee is charged

283

Colmers

Responds yes with Medicare.

285

Chair Monnes Anderson

Asks to clarify if they charge a fee to hospitals to run the program.

286

Murray

Answers that they are financed through user fees.† Elaborates

295

Chair Monnes Anderson

Asks how much is from the general fund.

296

Murray

Answers, none.

300

Chair Monnes Anderson

Asks Murray or Colmers to clarify the difference of Medicare between Maryland and Oregon.

310

Colmers

Explains the difference.

332

Chair Monnes Anderson

Comments on number of companies dropping health insurance and asks for the uninsured rate in Maryland.

340

Colmers

Answers that it is about 13 to 14 percent.

343

Chair Monnes Anderson

Asks for the percentage of uninsured in Oregon.

345

Colmers

Answers about 17 percent.† States that Marylandís uninsured rate has remained consistent, unlike Oregonís recent spike.

347

Chair Monnes Anderson

Comments that it has been due to the Oregonís Health Plan (OHP).

350

Rutledge

Speculates that it was from a recession.

358

Colmers

Comments on Oregonís increase in cost of bad debt and charity care and why Maryland addresses them both under uncompensated care, instead of separately.

385

Berkobien

Comments on shorter stay in hospitals in Oregon and asks why that may be.

390

Colmers

Provides speculation.

404

Berkobien

Asks why Oregon has a shorter stay than in Maryland.

406

Colmers

Explains that it is not a huge difference, and may be due to differences in medical practice.

432

Sen. Morrisette

Discusses start up costs for Oregon.† Asks what kind of waiver Oregon could obtain without paying 200 million dollars.

450

Colmers

Answers question.

TAPE 30, B

020

Rutledge

Clarifies previous comments on Medicare reimbursements.

045

Colmers

Suspects that it would still cover the uninsured patients.

048

Sen. Morrisette

Asks how a fiscal statement would be prepared and comments on start up costs.

058

Colmers

Explains how Maryland started out.

070

Chair Monnes Anderson

Clarifies that hospitals in Maryland were originally in agreement with the rate setting program.† Asks how many hospital officials were on the commission originally and if there was a majority.

073

Murray

Answers that the law in Maryland and in SB 502, prohibit a majority of people who are connected with hospitals.† Asks Colmers if there were healthcare officials on the first board.

075

Colmers

Answers, yes.

080

Sen. Morrisette

Asks who ran the hospitals when rate regulation started.

082

Colmers

Answers that it was Hospital Trusties and provides further explanation.

085

Sen. Morrisette

Asks to explain their motivation again.

090

Colmers

Answers question.

094

Sen. Morrisette

Asks how Oregon should set up in terms of hospital trustees.

098

Rutledge

Answers question.

112

Sen. Morrisette

Clarifies question.

115

Rutledge

Answer clarification.

137

Colmers

Comments on quality of staff in the hospitals in Oregon.

155

Colmers

Comments on failures of other states regulating the hospital rates.

172

Sen. Morrisette

Asks what mistakes West Virginia made that Oregon could avoid.

178

Colmers

Suggests that it would be worthwhile to research the information.† Offers to return information to the committee.

195

Murray

Comments on Marylandís timing implementing the hospital rate regulation.

210

Chair Monnes Anderson

Comments on need for transparency for hospitals.

230

Rutledge

Comments on possible website of hospital costs.

240

Sen. Morrisette

Comments on community hospitals in Springfield that have closed and that consolidation hurts small hospitals to benefit the larger hospitals.

275

Rutledge

Comments on consolidation of hospitals.

290

Chair Monnes Anderson

Expresses concern for high costs of healthcare.

315

Chair Monnes Anderson

Closes informational meeting for panel discussion on hospital rate regulation and transparency.† Adjourns meeting at 7:30 p.m.

 

 

EXHIBIT SUMMARY

 

A.     Hospital Rate Regulation, PowerPoint presentation, Robert Murray, 20 pp

B.     SB 502, written testimony, Joe Nicola, 2 pp

C.     SB 502, written testimony, Lynn-Marie Crider, 7 pp

D.    SB 502, written testimony, Maribeth Healey, 1 p

E.     SB 502, written testimony, Steve Dixon, 2 pp

F.      SB 502, written testimony, Ellen Pinney, 9 pp

G.    SB 502, written testimony, Ken Rutledge, 11 pp