Hawaii’s World

By A.A. Smyser

Tuesday, April 6, 1999

Operating former
state hospitals

ON March 23 I said government unions must relinquish management rights they have usurped from state and county governments. Otherwise big government may sink our economy.

Today I report on a small step in the right direction -- the creation of a public benefit corporation to operate 12 former state hospitals. It isn't for profit like Straub or nonprofit like Queen's, St. Francis and other of our big health centers. It still needs state subsidy because it must continue the low-cost or no-cost benefits these hospitals previously provided. It also must continue paying state-level pay and benefits to its 3,000 employees. These rigidify 65 percent of costs.

But the new entity, called Hawaii Health Systems Corp. (HHSC), still used what wiggle room it has to trim system losses from $46 million in fiscal 1997 to $17.7 million in 1998. It increased income $26 million with higher levies on insurers and others and by offering added services. It held expense growth to $3.5 million and defrayed expenses by 95 percent with no reduction in services.

It has four acute-care hospitals -- Hilo Medical, Maui Memorial, Kauai Veterans and Kona Community; four long-term care facilities -- Maluhia and Leahi on Oahu, Kula on Maui and Samuel Mahelona on Kauai; and four rural facilities -- one on Lanai and three on the Big Island at Kohala, Honokaa and Kau. A new physicians' center for West Kauai, at Waimea, ties in with Kauai Veterans Hospital.

Management is under 14 unpaid directors appointed by the governor. Their chairwoman is Diane Plotts, the savvy former fiscal officer for developer Chris Hemmeter's Hawaii operations. The paid president and CEO, chosen after a national search, is Thomas M. Driskill Jr., a former top administrator for Tripler and Walter Reed Army hospitals.

The state auditor identified numerous management shortcomings over the two-year period from creation until last June 30. The board mostly agrees but says it is unfairly rapped because it took five months until the Department of Health transferred the hospitals and 13 months (until last Aug. 1) before the permanent director was on the job. The audited financial improvements I quoted earlier include six months following the auditor's report period.

HHSC has created citizen and physician advisory committees in five geographic districts. It also regularly consults with the Hawaii Government Employees Association and the United Public Workers on relaxation of work rules to increase efficiency. Floating of nurses between departments in a hospital is one example that can bring significant savings.

A major step toward medical care improvement is the implementation, in part with a $3 million Weinberg Foundation grant, of an HHSC Telemedicine System that links with STAN, the State of Hawaii Telehealth Access Network. Medical images can be transmitted quickly to take advantage of expertise remote from the treatment site.

Through PEACESAT, HHSC also has established services in American Samoa and plans to reach out to other present and former U.S.-administered islands in the Pacific. This fits with Governor Cayetano's goal of building Hawaii as a Pacific health center.

Plotts and Driskill say further cost cutting will be restrained by the legislative restrictions. They hope, however, that their direct talks with the unions can lead to more economies such as the ability to "float" nurses within the system.

A.A. Smyser is the contributing editor
and former editor of the the Star-Bulletin
His column runs Tuesday and Thursday.

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