Study: Isle
hospitals in serious
financial pain

They're losing $195 million
a year because Medicare
payments have been cut

HMSA offering plan to
cover uninsured children

By Lori Tighe
Star-Bulletin

Hawaii's hospitals are losing $195 million a year because federal Medicare payments have been slashed, according to the Healthcare Association of Hawaii.

"Health-care facilities are in very serious financial trouble. They can't keep going on like this," said Rich Meiers, president and chief executive officer of the Healthcare Association of Hawaii, which paid for a study of the problem by Ernst & Young.

The association met with Gov. Ben Cayetano and legislators yesterday to discuss the findings and ask that any new health care benefits be stopped for the next two years.

"Medicare reimbursement is a federal issue," said Senate President Norman Mizuguchi, "and I hope the congressional delegation can meet with the governor, legislative leaders and health-care providers to formulate a strategic plan of action to address the problem."

The federal government is shortchanging Hawaii by reimbursing its Medicare services at a rate 30 percent lower than the rest of the nation, the study showed.

"That's a huge difference," said Joan P. White, vice president of Healthcare Association of Hawaii. "We feel HCFA (the Health Care Financing Administration) hasn't taken into account adequate costs in this state. We're looking into why."

Medicare and Medicaid cuts were brought about by the 1997 Balanced Budget Act. White said the act capped Medicare services and didn't keep up with increasing costs of health care.

The state has 156,000 Medicare beneficiaries, and will lose half a billion dollars in three years if things don't change, Meiers said.

"We knew there were significant negative impacts of the (Balanced Budget Act), but it was twice as bad as anyone predicted," White said.

The Healthcare Association of Hawaii decided to skip its annual convention and instead pay for the study to examine how deeply the state's hospitals are hurting.

Most health-care facilities in the state "have seen profit margins sink to zero and some are in the red," White said.

Kahuku Hospital on the North Shore talked about closing, but has managed to keep going month to month, he said.

Hospitals also pay $15 million a year for medical education; $20 million a year for community programs such as Kapiolani Hospital's Poison Control Center, and $50 million a year for bad debt and charity care.

Hawaii's widening number of uninsured worsens the problem, Meiers said. For years, Hawaii enjoyed the lowest rate of uninsured people in the nation -- 3 to 5 percent. But the uninsured figures this year grew to 13 percent of adults and 8 percent of children.

"If we can lower the uninsured that would help. They'll get better health care earlier, the system will get reimbursed and charity care will go down," Meiers said.

Parents have a role in this, he said. A few years ago, an estimated 13,000 children eligible for the QUEST program weren't signed up for it. Parents need to find out if their children qualify for state-assisted health care, he said.

Congress this year enacted relief for states to make up for the lost revenue under the Balanced Budget Act. But Hawaii will get just $4 million to $5 million.

"When we're losing $195 million a year," Meiers said. "It's nowhere near enough."

---

HMSA offering plan
to cover uninsured kids

One in 10 needs more health care,
the group says in unveiling its
Children's Plan

Star-Bulletin staff

Some 31,000 children in Hawaii are uninsured -- about one in 10 -- and studies show children without medical coverage get half the health care that insured children get, according to the Hawaii Medical Service Association.

To help those uninsured children get regular immunizations and other care, the HMSA yesterday announced a health plan aimed at them.

The HMSA Children's Plan covers primary and preventive care, and provides hospital benefits to children ages 1 month through 18 years, it said.

The plan, costing $58.50 each month for each child, was described as a "viable alternative for families unable to afford a more comprehensive plan."

Open enrollment begins Jan. 15, and the plan is effective April 1.

HMSA will target children whose families earn more than qualifying limits for the state's QUEST program, but don't have employer-based health plans.

HMSA noted that:

The federal Children's Health Insurance Program will help the state expand Medicaid coverage to include families with uninsured children under 19.

The Robert Wood Johnson Foundation recently gave $1 million over three years to the Hawaii State Primary Care Association to find and enroll uninsured children who qualify for QUEST or Medicaid.