Task team to ID cost savings, reform structure

The hospitals and long-term care facilities of the Hawaii Health System Corp. (HHSC) provide critical and essential health care services that form the "safety net" for many of our neighbor island and rural communities. This year, HHSC requested a general fund subsidy of $150 million, a significant increase from previous years. We must make changes to the system to ensure that it is financially sustainable, and this effort must be led by the governor’s office to be successful.

The effort will require participation by all stakeholders, including the public employee unions, legislators, community members, private hospitals and service providers and employees. If I am elected governor, I would convene a task team made up of all stakeholders. We would begin deliberative fact-finding work to identify cost drivers in HHSC that increase the general fund subsidy, and gather essential data on utilization and services needed by neighbor island residents.

The team must focus on each facility individually to identify its unique challenges when developing the long-term plan.

The team must focus on the HHSC facilities as a system to identify opportunities for savings and cost reductions that result from economies of scale and coordination of care and services.

The team must look for changes that will improve the financial performance of the system if it remains as a state entity. This would include changes to labor contracts and work rules that would have to be negotiated with the appropriate unions. This would also include assessments of essential services for each facility, and opportunities for coordinating care with private and other HHSC facilities to reduce operating costs.

The team would also initiate discussions with private entities that may be interested in public-private partnerships to identify potential opportunities in changing the structure of the HHSC facilities.

The changes at HHSC will require a sustained effort over several years, and must include a specific plan for each facility.

There is much work to be done; however, these basic principles would guide my decision-making:

»Essential, high-quality hospital services (a "safety net") on the neighbor islands must be maintained.

»Labor costs must be better controlled through negotiations with affected employees’ unions for specific changes for employees that work in the HHSC facilities. Vested benefits must be protected.

»Efficiencies in other cost drivers must be identified and implemented.

»The general fund subsidy for the HHSC system, or its successor, must be reduced and, if possible, eliminated.

»Communities served by HHSC or its successor must not expect the hospitals to provide "all services for all people." Some hospitals may have to refrain from providing non-essential services available elsewhere under a coordinated health care network.

»The division of assets and liabilities must be fair.

I will be open to considering any reform structure that complies with these principles. A public-private partnership between HHSC hospitals and a private health care provider has received the most attention recently. Also promising, but not discussed much, is a structure giving each HHSC region greater autonomy and more collective bargaining authority while preserving centralized efficiencies. Different structures for different regions also must be considered since each has unique needs.

If elected governor, I look forward to the opportunity to lead the HHSC reform effort to ensure quality health care services for all of our communities in a cost-effective manner.