Legislators seek state hospital system’s plan to stay afloat

State lawmakers want to hear the Hawaii Health Systems Corp.’s plan to streamline operations and address anticipated budget shortfalls in preparation for next legislative session when they expect to once again consider proposals for potential privatization of the financially strapped system.

A series of statewide briefings, which will include details from members of the various regional boards, is scheduled to begin Wednesday before heading to Kauai on Monday. Briefings are expected to be held on Hawaii island and Maui in July and August.

Meetings are being convened by the House Health Committee.

"One goal is to have a public hearing of what the operational plans and budgets are and how they’re going to address the shortfalls within each region," said Rep. Della Au Belatti (D, Moiliili-Makiki-Tantalus), House health chairwoman. "Secondarily, it’s to facilitate community conversations about what a public-private partnership might look like.

"I think we’re taking this interim to really have a conversation here on Oahu, but there’s going to be a real effort to also take these conversations out to the various regions."

Representatives from the Governor’s Office and the corporate board of HHSC have been asked to brief lawmakers. Members of the Kauai Regional Board also are slated to pre­sent information on its regional budget and plans.

Last month HHSC — the largest provider of health care in the islands — announced plans to close its Kala­­heo primary care clinic on Kauai’s South Shore in September, citing inadequate funding and rising medical expenses. The Legislature granted the rural health care group $102 million for 2015. The organization had requested $150 million, leaving a $48 million shortfall, most of which will come from forgoing collective-bargaining salary increases.

"As we move forward, the committee is going to learn a lot about what the options might be," Belatti said. "I’m approaching this with a very open mind."

Earlier this year lawmakers explored legislation that would pave the way for privatization, but the bill stalled in the closing days of the session.

Senate Bill 3064 would have allowed for HHSC facilities to partner with or be purchased by a local nonprofit provider while also prohibiting any decrease in services for at least five years. It also would have continued the state’s financial support and protected workers’ negotiated benefits.

Belatti said various models of privatization have emerged in recent years that merit further study, including a public-private partnership and a management agreement model with a local partner that includes an option to buy.

The management agreement option emerged late in session this year and needed further vetting, she said.

The other option is to maintain the hospitals under state control and continue to foot the bill.

"It’s a realization and a recognition that as a statewide safety net system, we continue to fund that system, and we need to understand what the true costs are and then have the political will to sustain that subsidy going forward," she said.

"I think the difficulty with that option is that the subsidy will always be increasing."

HHSC comprises 12 facilities and four affiliates: Kahuku Medical Center, Rose­lani Place, Yukio Oku­­tsu State Veterans Home and Alii Health Center.