It won't be business as usual for the Hawaii Health Systems Corp. and the 13 public hospitals it manages on five islands if the governor signs a bill passed by the Legislature.

House Health Committee Chairman Ryan Yamane (D, Waipahu-Mililani) said the bill, SB1673, will give the public hospital system “;shock treatment,”; with a significant shift to a decentralized operation.

Discussing the legislation at a news conference yesterday, legislators said it will provide the foundation for a more sustainable hospital system.

Access to health care is a major concern on the neighbor islands and in rural areas, said Sen. Health Committee Chairman David Ige (D, Aiea-Pearl City). If the governor signs the bill and releases funds appropriated for the state hospitals, he said, “;We will be very well positioned to deliver improved health care to residents.”;

Key features of the legislation are aimed at giving the hospitals the flexibility to control costs similar to private hospitals, while providing for increased fiscal and management transparency.

HHSC regional systems—established by legislation two years ago—will have more autonomy and authority and can enter into public-private partnerships, legislators said.

The regional systems will be allowed to reduce, eliminate or expand services with community involvement in the decisions. The HHSC or any regional board also can negotiate for employees to change any collective bargaining agreement or items subject to collective bargaining.

The 15-member corporate board will be reduced to 12 members and reorganized by July 1, 2010, to improve regional representation.

Thomas Driskill Jr., HHSC president and chief executive officer, said the bill is “;a very positive step forward. ... Health care is changing and we need to change with it so we can be here for the community in the future.”;

A notable omission is lack of funding for salaries in 2011 for Driskill or Kelley Roberson, chief operating officer and chief financial officer, respectively.

“;The corporate structure will be less robust,”; Yamane said, suggesting it will be up to the HHSC corporate office to find money to pay the salaries.

The Legislature appropriated $14 million in emergency funds to help HHSC pay bills this fiscal year. And it added $39.5 million in general funds for the biennium, to be matched by $20.1 million in federal funds.

Lawmakers also authorized $5.5 million in special funds that can be used to compete for a federal grant to implement information technology in the facilities, Ige said.

A grant could result in $55 million from the federal government for a total additional investment of more than $114 million in HHSC, he said.