Lawmakers in the House want to abolish the Hawaii Health Systems Corp. and temporarily move the 13 public hospitals back to the state Health Department—a move Health Director Chiyome Fukino says would be “;catastrophic.”;

Citing critical issues such as nontransferable certificates, licenses and permits, Fukino told House members their proposal could result in “;very real potential collapse of the entire hospital system.”;

HHSC said the bill “;would devastate HHSC hospitals so dramatically by the first few months of fiscal year 2011 that emergency rooms and then the hospitals would be closed before the Legislature would be able to take corrective action in the 2011 Legislature.”;

“;By no means do we feel they should stay with DOH,”; said House Health Chairman Ryan Yamane. He said the transfer would be temporary, from July 1, 2010, to June 30, 2012.

A transition committee would be formed to recommend a permanent structure for the hospital system that meets state health needs, especially on the neighbor islands, he said.

Yamane (D, Waipahu-Mililani) said the House proposal stems from the state's fiscal crisis, annual HHSC requests for emergency appropriations and questions raised by the state auditor in a financial review of the corporation.

But senators disagree.

“;You just don't go backwards,”; said Sen. Rosalyn Baker (D, Honokohau-Makena). “;What's the point of moving them to DOH? How does that improve anything? One reason we took them out of the DOH initially, they were dying on the vine.”;

The House overhauled SB 1673, which proposed giving regional hospitals the option to become other types of entities and attract public-private partnerships. The Senate also proposed increased operational and construction funds for HHSC, which it said “;must stay intact”; to provide support services for regional systems remaining part of the agency.

House-Senate negotiators are wrestling with the contrary positions in meetings on the bill. The conference committee meets at 3:30 p.m. today in Room 229 of the state Capitol.

“;In defense of the House,”; said Baker, one of the authors of the original Senate bill, “;I think they're frustrated, as we all are. We're hoping we can come together at least to begin to chart the path. We have to provide ways for the acute-care hospitals to partner with other entities to try to pull down additional funds.”;

She said the state hospitals, like all other hospitals, are suffering from rising health care costs, increased demands for services and low reimbursements.

HHSC was established by state law in 1996 as a public benefit corporation to operate the public hospitals.

“;We did not give them any operating capital, and we saddled them with all the debts coming out of the Department of Health and put the employees in collective bargaining rather than biting the bullet,”; Baker said.