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February 16, 2014 - In This Issue:
Denning Official Senate Photo
  • Farm Income at 40 Year High
  • Consumer Credit Increased 6.2%
    • Retail sales project to increase 5% in 2014
    • Kansas economy expanding at steady clip
  • West Texas Intermediate Oil Price
    • Hit $100 barrel last week
    • Expected to settle in between $90-95 through 2014
  • Inflation Rising
    • Expected to rise to 1.8% in 2014
    • 1.5% in 2013
Health Care Cost Transparency
Patient's Out of Pocket Costs Continue to Increase

Senate Bill 251 addresses this issue head on.  We have all received the surprise medical bill thirty days after we have received medical services. High deductible plans and high co-insurance plans are now dominating both the private sector plans and the Obama Exchange Plans. The need for health care cost transparency is the most important business issue for private practices, hospitals, and of course patients. 


This bill would allow computers in doctor's office to query the payment database computers at the insurance company's office to get an accurate estimate of patients out of pocket costs in real time. The query would utilize existing industry approved HIPAA secure transaction. The objective is to let patients know their ESTIMATED out of pocket costs for non-emergency services before they are consumed. This bill will allow patients to make informed decisions with their physicians about their health care and associated health care costs.  


A question was raised by industry and the committee as to the interest level at physician practices to use such technology to obtain the out of pocket estimate. The Greater Kansas City Medical Managers Association (GKCMMA) conducted a survey with their membership on February 11, 2014. The results show overwhelmingly support for the proposed legislation.  A recap of the survey is as follows.



Question 1.  Would you use a technology solution to get a real time estimate of patient out of pocket expenses?


98% said yes



Question 2.  To what extent are high deductible plans increasing patient out of pocket expenses?


84% of patients are experiencing large out of pocket expenses, with

67% experiencing very large expenses



To review the complete survey click here.



The following example is the current state of health care transparency in Kansas.




Chairman of the Senate Insurance Committee, Rob Olson, formed a special sub committee to study SB-251. The goal is to bring Industry and patients together to reach a compromise on the bill which will work for all parties. The special subcommittee will meet Monday February 17th at 10:30 am in room 142-S.  Several positive amendments will be considered to improve the bill. The Chairman understands the significance of SB-251.  It will affect 1/6 of the Kansas economy. We have to get it right.

Kansas Exports on the Rise
Over 3,400 Kansas Businesses Export

U.S. goods and services exports are at record setting high. U.S. exports reached $2.3 trillion in 2013. Kansas helped in reaching the record with state exports totaling $12.5 billion in 2013, a 6.5% increase over 2012 levels.


The following is Kansas' largest markets exported to.



Kansas' Exports by Category
Kansas Oil Production
Renaissance - The Great Crude Oil Revival
Picture Courtesy of Greg Lovelady

Having grown up in Western Kansas I understand how important Oil and Gas production is to the Kansas economy. My dad was a rough neck and pipe fitter. My parents raised nine children on his salary. I loved it when he would take me to a drilling site to off load pipe or drop off equipment. Sometimes a caterpillar would have to tow us in if we followed a rain. He cussed it, I loved it. Of course I got to stay in the cab while he got out in over ankle deep mud.


This is my fourth year serving in the Kansas legislature. I have always been assigned to budget committees. In the House I was on the Appropriations budget committee. Now in the Senate I serve as Vice Chair of the Ways & Means budget committee.  In the private sector I was trained as a financial analyst. I remain interested with any kind of trend or percentage. When we are out of session I spend extra time going through budgets trying to get my arms around the States $14 billion appropriations. Most of time it feels like I have my arms around a big marshmallow, just barely able to touch my fingers.


One trend that I monitor is the oil severance tax receipts. We are all aware of the increased oil production activity in Kansas. A drive through Western Kansas is evident from the rigs, oil wells pumping, and service trucks on the road. Over 6,400 permits to drill oil and gas wells were issued in Kansas in 2013. The Kansas oil and gas industry invests over $1 billion annually into Kansas. As a result Kansas oil and gas industry supports nearly 67,000 jobs which results in over $3 billion in family income.






An average annual 27% increase in tax collections is impressive. It shows the important role oil production is playing in the Kansas economy.  What should also be noted is the contribution the Oil industry makes as part of the state's overall tax collections. As a percentage of overall taxes collected oil severance taxes have grown from .8% of total taxes to 1.5% of total taxes collected. Doubling since 2010. This is the result of higher oil prices and increased production.


The following table shows Kansas crude oil production compared to other oil producing states.






The figures above represent barrels of oil per day being pumped.  New methods of drilling such as horizontal and fracking have really increased the production capacity in the U.S.  Kansas oil production is robust and growing.


The one major difference between Kansas and the other oil producing states is Kansas does not have a direct producer open access pipeline to Cushing Oklahoma. Cushing is where most North American oil is gathered and distributed to the rest of refineries and markets. It is referred to as the "Demand Market" for most North American oil. From Cushing the oil moves towards the Texas Coast through large diameter pipelines.


The map below shows the major pipelines traveling through Kansas transporting other states and Canadian oil to Cushing Oklahoma where it is marketed. Colorado, Wyoming, and Canadian oil pipelines pass through Kansas without any Kansas on ramps for Kansas produced oil. Think about I-70 with no on ramps.





Kansas Oil producers, especially the independents, are demonstrating the ability to increase production on an annual basis. I have asked the Governor's office as well as the Department of Commerce to inquire with the pipeline owners to determine if Kansas could have an on ramp access point. The job and economic potential for Kansas to participate at a larger scale in the oil production renaissance occurring in the United States is dependent on large part in getting our oil to the demand market at Cushing, Oklahoma in the most economical way. Pipelines are the most efficient and safest way to accomplish this.

Other News

After losing two unplanned legislative work days last week, the legislature hit the ground running this week as we are quickly approaching our first major deadline on February 28th. This date is known as "Turnaround." What this means is all non-exempt bills that have passed on the floor are exchanged with the other Chamber. House passed bills go to the Senate, and Senate passed bills goes to the House. If a non-exempt bill has not made it through the Chambers floor by the 28th it is basically dead until next session.


Last week, the House passed House Bill 2453 - also known as the Religious Liberty Bill and it is now in the Senate. Constituents, business leaders, and employees have weighed in on the bill voicing concerns it is too broad and has unintended consequences. The Senate Judiciary Committee will be responsible for taking any further action on this bill.  I do not support the bill, as written, and certainly in its present form it has little support in the Senate caucus. It should be noted that both Chambers serve as a back stop to each other when situations like this arise. Before a bill becomes law it must pass both Chambers. I will note that last year a senate floor amendment was added to a Commerce bill during debate on the floor. Based on the amendment the bill passed the senate and went over to the House for consideration. About an hour after the bill passed it was determined that the amendment was defective and would have cost the taxpayers over $1 million dollars. The Chair of the House Commerce Committee was made aware of the defect. He reviewed and understood what occurred and corrective action would be in order. The House corrected it in their Committee. I just share this example to document that a system is in place to have another set of eyes review legislation and correct any deficiencies that may not have been known or realized when voting. The process also allows citizens and businesses to weigh in before the other Chamber starts working on a bill sent over from across the rotunda.  And they all did relating to this bill.



If you make your way to Topeka please stop in for a visit and see the renovations at the capitol. The renovations are stunning.  I always enjoy meeting  constituents and appreciate a perspective from those outside of the Statehouse.


Capitol Office
300 S. W. 10th Street, Room 541-E
Topeka, KS 66612

Overland Park
8416 W. 115th Street
Overland Park, KS 66210



Paid for by Jim Denning for Kansas Senate - Kathy Vance, Treasurer

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