The sickest patients in the Hawaii system of public hospitals are the hospitals themselves, which are hemorrhaging losses at an alarmingly increasing rate.
The cure is not going to be easy, but the basic framework of House Bill 1075, which would legally enable the state to transition management of Maui’s hospitals to a private partner, represents a strategy the state desperately needs.
It would extricate at least Maui’s part of the Hawaii Health Systems Corp. from a fiscal downward spiral. The House should move the measure along for further discussion and refinement once it comes up for a floor vote early next week.
The plan is not without its risks, and legislators need to get more information on the deal that’s beginning to take shape. State Rep. Sylvia Luke, who chairs the Finance Committee that just passed out HB 1075, confessed to wanting more evidence that the bill would produce the best deal for the state.
The same worry was raised in public testimony by Randy Perreira, executive director of the Hawaii Government Employees Association, representing some of the labor force at the three facilities covered by the plan: Maui Memorial, Kula and Lanai Community hospitals.
The HGEA, joined by United Public Workers in opposing the bill, argues that the plan favors a single private entity and is too generous with the taxpayers’ money.
Luke’s specific call — which is reasonable — is for more information about the process of finding prospective partners, which so far includes just one. Maui executives for the HHSC are in negotiations only with Hawaii Pacific Health, the nonprofit health care system that runs Oahu’s Kapiolani Medical Center for Women & Children, Pali Momi Medical Center and Straub Clinic & Hospital and Wilcox Memorial Hospital on Kauai.
The proponents of the bill now have the opportunity and duty to explain more fully the search that’s gone on for such a partner. In past iterations of this bill, the overtures had been made to the Arizona-based Banner Health Systems Corp.; the out-of-state prospect drew criticism from unions and many in the local community.
This time both HPH and Kaiser Permanente, both companies with a prominent local presence, showed interest, although Kaiser later declined to pursue the option further, said Wesley Lo, HHSC’s Maui region chief executive officer.
Two factors seem to be propelling the current proposal, and with good reason:
» Lawmakers have been asked to double what it appropriates for the statewide hospital system to cover its losses and subsidize operations, from $100 million to $200 million. The state budget simply can’t sustain that kind of overhead, which already has been a drain for a number of years.
» The response from the community is now much more supportive of the privatization idea. Luke said the feedback from Maui this year is much more positive than it had been when Banner was the leading candidate for the partnership.
The Maui Chamber of Commerce, for example, asserted that the partnership could provide "coordinated and cost-effective health care services to our entire community." There was opposition from some who feared reduction in staff and benefits and cited the provision that the state would split with the private partner the cost of capital improvements for 10 years.
But other residents testifying countered with support, adding that they worried instead about the survival of Maui’s only major hospital. And that should be the predominant issue. The county needs to consider, first and foremost, the maintenance of health services to its residents.
The bill would cap the subsidy at current, 2014 levels and, Lo rightly said, this alone could represent significant savings, even factoring in the state’s share of capital improvement projects.
HB 1075 would require any lease and management plan produced through negotiation to be approved by the HHSC Maui board and the governor, and for the transition to be reviewed by the state’s attorney general.
That seems a prudent precaution for what is plainly a new direction for providing Hawaii’s health care safety net. A new direction is necessary, given where the status quo has left us now.
