House bill would put
12 isle hospitals under
the state’s control

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By Helen Altonn
haltonn@starbulletin.com

Hawaii's 12 state-owned community hospitals, operated under the quasi-private Hawaii Health Systems Corp., would be returned to state control under a bill moving to the House floor for action.

Legislature Directory Legislature Bills & Hawaii Revised Statutes

The measure, HB 512, would transfer the system in July 2010 to the state Health Department's Community Hospitals Division, which operated them before the corporation was established.

A 48-hour advance notice requirement was waived so the Finance Committee members could consider the bill. It did not go through the House Health Committee.

Corporation President Thomas Driskill said he was in board committee meetings when he learned of the bill about 40 minutes before the hearing.

He arrived in time to testify against the proposed transfer, but Dr. Chiyome Fukino, state health director, did not make it.

She said she will submit late testimony strongly opposing the transfer because "HHCS is the health safety net for the state."

She said the corporation has brought the hospitals a long way. Costs may be a little high because they are repairing buildings and upgrading equipment, which must be done with hospitals, she said.

"In my 13 years of working closely with the Legislature, I have quite frankly never seen a piece of legislation brought up on short notice as this which allowed for almost nobody to be present for testimony, especially from the neighbor islands," said Rich Meiers, Healthcare Association of Hawaii president and chief executive officer.

Rep. Bob Nakasone (D, Waikapu-Wailuku-Kahului), the bill's author, said he is concerned about the system's impact on Maui's hospitals.

He proposed a bill last year to remove Maui Memorial, Kula and Lanai Community hospitals from the system. Maui Memorial is the only community hospital making money, but its profits are used to support hospitals that do not break even, he pointed out.

He said a general subsidy is needed for the system, "but at least give one district incentive to go on its own. ... I believe if profits were retained at the hospital, they could plan in terms of capital improvement projects, but everything depends on the health system."

Nakasone said he wants an audit of the system.

Driskill said the corporation has requested an emergency appropriation of $14 million this fiscal year, in addition to its $26 million budget, to repay the Employees' Retirement System for the 3,400 employees at the 12 hospitals.

The corporation has asked for $39 million in state funds in the next fiscal year and $43 million in 2004-2005. Almost half of that each year would be for the retirement system, he said.

Dr. Tony Manoukian, of Maui Memorial Medical Center, chairman of the system's physicians advisory group, said the Hawaii Health Systems Corp. "has done a good job in helping us provide care to our patients and the communities we serve," and it would be "a major step backward" to go to the Health Department.

Meiers said: "These kinds of attempts are very demoralizing to the 3,000-plus employees all across the state that work so hard within the Hawaii Health Systems Corp. to develop this system to where it is today. It's also frustrating to the patients who love the system."

Meiers was on a team appointed by former Gov. John Waihee that worked to produce the law establishing Hawaii Health Systems Corp.

At that time the hospitals were costing $50 million a year, he said, estimating more than $150 million to $160 million would be needed to run them under the Health Department today.

He said the corporation has done a good job trying to solve the system's problems and would do better if it had more autonomy and could negotiate its own salary schedules and retirement plans.