Friday, February 5, 1999



Hawaii State Seal

Bill looks at revised
HMSA bylaws

Legislature Directory
By Pat Omandam
Star-Bulletin

Tapa

The Hawaii Medical Services Association has a lot in common with Kamehameha Schools/Bishop

Estate, says Larry Geller.

Both organizations are large, both exist to serve beneficiaries -- and both are being criticized in the media for their management style, Geller told state senators yesterday.

"My comparison of HMSA to the Bishop Estate is not frivolous," he said.

"HMSA is the largest insurer in the state, with about 60 percent market share, and it enjoys tax-exempt status. Currently, it has an annual surplus of over $60 million, a huge sum in view of Hawaii's small population," Geller said.

1999 Hawaii State Legislature The Senate Consumer Protection Committee yesterday heard a bill that pits Hawaii's largest health insurer against beneficiaries and health care practitioners who are upset at changes to HMSA's constitution and bylaws approved at a special meeting last November. They contend the revisions strip power from HMSA's 600,000 members and give it to its 27-member board.

HMSA, however, insists the move has preserved and enhanced member rights.

The dispute has spilled over to the state Legislature in the form of Senate Bill 872. The measure bans HMSA from changing its constitution or bylaws except upon a two-thirds vote of its members. And it prohibits special meetings of the membership except when five board directors or 200 members ask for it.

Other limitations in SB 872 require HMSA to publish meeting notices in daily newspapers at least 30 days before a meeting. Also, a written notice must be sent to each member or be highlighted in HMSA's publications.

The Senate committee will vote on the bill Feb. 16.

Dr. Richard E. Ando, a member of the 1,700-member Hawaii Medical Association, was outraged at the actions taken at the Nov. 2 special meeting. Ando called it "a mockery of the philosophy of a mutual benefit society."

Adopted at the meeting were amendments that raised the number of HMSA members needed to call a special meeting (from 100 to 19,000), authorized HMSA to open branch offices on the mainland, delegated investment decisions to one or more investment advisers and required all board nominees to be screened in advance by a board-appointed nominating committee.

"As a tax-exempt entity, HMSA needs to be held accountable to their members and to reverse these recent actions," Ando testified.

Mutual benefit societies are governed by a section of the state insurance code that exempts them from paying taxes and from undergoing the same scrutiny as other insurance companies, since they are established for the sole benefit of their members. HMSA is currently the only such entity operating in the state.

Retired law professor Richard S. Miller, a member of the patient advocacy group Hawaii Coalition for Health, said HMSA's strong position in Hawaii's health insurance industry has made it a lucrative operation that has generated a $60 million surplus last year.

"Arguably, in a well-planned health insurance enterprise with no profit motive or commitment to increase the wealth of stockholders, significant surpluses should not exist," he said.

But Stacy Evensen, HMSA assistant vice president of government relations, responded that the $60 million is a government mandated reserve, not a surplus.

She argued the bill itself stems from a disgruntled few -- mostly doctors -- who wrongly assume changes to HMSA's constitution reduces members' rights in how the association is run.

"It is inappropriate to use the legislative process to advance a clearly self-serving, political agenda under the guise of a members' rights issue," she said.

Evensen said the special meeting was legal, fairly noticed and appropriately conducted. Moreover, HMSA provides high quality, affordable health care, and membership approval of their health plan is very high, she said.

She explained raising the percentage of membership needed for a special meeting was necessary to reduce HMSA's risk a very small minority could usurp its assets.


Organ donation bill
passes House committees

By Lori Tighe
Star-Bulletin

Tapa

A month ago, Carol Hagiwara's daughter, Amy, would have turned 12. Next month, the Hagiwaras observe the second anniversary of her death; Amy, who had cerebral palsy, died in her sleep from natural causes.

Today a teen and a 33-year-old father see with Amy's corneas. A young girl in Houston and a boy in Los Angeles can run because of Amy's heart valves.

"Tissue donation allowed us to turn the tragedy into something positive. Amy's light shines on," Hagiwara said, testifying at yesterday's House Health and Human Services committees hearing for a bill to encourage organ donations.

1999 Hawaii State Legislature "Organ and tissue donation is the ultimate expression of aloha."

As Hagiwara told her story, she mentioned others whose family members had given and others who had received an organ donor gift. Each person stood before the committees to show their support, until a dozen stood.

"That was as powerful a testimony as I've ever heard," said Rep. Alexander Santiago, chairman of the House Health Committee.

The bill would require hospitals to report the suitability of an organ donation on or before a person's death, to the appropriate organ agency. Then the hospital or agency would approach the survivors for permission to donate.

Without opposition, the committees passed the bill with amendments to be decided Tuesday.

To help increase the state's organ supply, the bill also calls for a statewide advisory committee to propose future legislation and a public education effort.

But the Department of Health opposes the provision because of its limited resources to oversee the advisory committee and public education fund.

The public needs education because Hawaii has one of the lowest donor rates in the nation, said Christine Bogee, in charge of public education for the Organ Donor Center of Hawaii.

"We support the overall intent of this measure ... However, the department feels that its passage would impact our priorities," said Health Director Bruce Anderson in written testimony.

The bill would also allow hospitals to check a deceased patient's drivers license to see if the person chose to be an organ donor.

"One of the biggest reasons people don't donate their loved one's organs is that they don't know their loved one's wishes," said Robyn Kaufman, executive director of the Organ Donor Center of Hawaii.

Required hospital referral offers every family the opportunity to consider donation, Hagiwara said. "Access to the drivers' license data base," she added, "makes sure the family knows of a loved one's wishes to be a donor."



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