Thursday, October 29, 1998

HMSA members
urged to fight changes

By Helen Altonn


A fight about proposed changes to the Hawaii Medical Service Association's constitution and by-laws is expected at a special meeting of its members Monday.

The Hawaii Coalition for Health and Hawaii Medical Association are urging all HMSA members to attend and vote down amendments they call "outrageous."

The coalition says the "draconian measures" would effectively reduce or abolish the power of 600,000 HMSA members to amend HMSA's constitution, approve by-law changes, call special membership meetings and get adequate notice of proposed meetings.

"It may be the last chance to retain any power in the hands of HMSA members to affect decision-making by HMSA," said the coalition of about 950 physician and lay members.

Fred Fortin, HMSA vice president for community relations, said the changes are intended to update the bylaws and maintain HMSA's stability in a "highly politicized" and "regulatory" health-care environment.

"No membership right has been changed here," he said. "Nothing can happen without the membership." Members still would vote on the directors, auditor, constitution and bylaws changes and make motions from the floor, he said.

Fortin cited three reasons for the proposed changes: "To bring some of the governance practices in line with other nonprofit organizations, for example, in investment of reserves and indemnification provisions." Also, "to keep HMSA competitive" and "to strengthen the continued orderly governance of the association."

Members must present their HMSA card and identification at registration before Monday's meeting at 9:30 a.m. in the Iwilei Ballroom, 735 Iwilei Road.

Founded 60 years ago, HMSA is Hawaii's largest health-care provider and is a member of the Blue Cross and Blue Shield Association.

Last year, it tangled with the Hawaii Coalition for Health, HMA and Hawaii Federation of Physicians and Dentists over its proposed physician contracts. A two-year deal emerged after HMSA made changes to address concerns.

At a health-industry meet earlier this month at the Turtle Bay Hilton, "the whole scene at (the) retreat was 'let's start trusting each other more, let's start communicating with each other more,'" said Dr. Gerald McKenna, HMA spokesman on HMSA issues.

Nothing was ever mentioned about HMSA by-law changes that "would appear to be disenfranchising HMA members ...," he said. "I would think all the people at the conference, including HMSA members, would ask, 'Are we meeting in good faith?'"

HMSA is supposed to be for the benefit of the members, not the directors, said McKenna and Richard Miller, retired law professor and volunteer consultant to the health coalition.

Only members approve amendments but the proposed changes also would require approval by a majority of the board, the two noted. And at least 18,000 members would have to join to call a special meeting instead of the present 100, they said.

"They certainly know there's no way that would ever happen," McKenna said. "So in essence, the membership, which is supposed to be partly directing this organization, has been effectively shut out."

Fortin said, "We're the only health plan in Hawaii that has this type of membership arrangement, that has this type of membership meeting."

He said the intent is to strengthen the board to ensure that community interests are broadly represented. "But it is still a partnership between the board leadership and membership."

He said the association has a "really large responsibility" to ensure continuity and accountability for benefits and services. "It is a very viable structure. But it can be manipulated by a well organized group of individuals."

Among the most disturbing proposals to the coalition and HMA is one to indemnify not only HMSA officers and directors -- but also employees and agents, former and current, against claims or lawsuits related to their services. HMSA also could advance defense costs with board approval.

"They're using your money, and my money, if we happen to be HMSA members, in order to do that," said McKenna.

Said Miller: "They're protecting employees so they don't have to worry about the deterrent effects of negligence."

The two also questioned the timing of the special meeting.

A notice appeared in the Star-Bulletin Oct. 22 when many of HMA's 1,600 members were on Kauai for an annual meeting. The American Medical Association's annual meeting started Sunday in Chicago.

Numerous bylaw changes proposed

Among major changes proposed to the Hawaii Medical Service Association's constitution and bylaws:

Bullet The Board of Directors would have primary responsibility, instead of the treasurer, to invest the association's reserves and could delegate its authority to investment committees or advisers.

Bullet Special membership meetings could be called only by 12 or more directors, or by 3 percent (18,000) of HMSA members, rather than five directors or at least 100 members at present.

Bullet Amendments to the constitution and bylaws would require approval not only by members but by a majority of the directors.

Bullet HMSA would be required to indemnify all present and former employees and agents, as well as directors and officers, "with respect to claims arising out of acts or omissions in connection with their performing services" if they aren't guilty of gross negligence or willful misconduct.

Bullet HMSA could establish branch offices outside the state and provide services to groups with members outside Hawaii.

Bullet Membership meetings would require 20 days' notice instead of 10. Notice would be in any association publication distributed free to members, such as "Island Scene," rather than in newspapers or by mail.

Helen Altonn, Star-Bulletin

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