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Banner Health’s interest in HHSC seems to be waning

January 23, 2014 - 10:49am

Discussion of private nonprofit organizations partnering with the state public hospital system is likely to take center stage among health care concerns this Legislative session, according to state Sen. Josh Green, chairman of the Senate Health Committee.

“It will be one of the top two or three issues we’ll take up in the health care committees this year,” he said Wednesday.

The Hawaii Legislature was spurred to address the issue last year after Hawaii Health Systems Corp. revealed that it had been in talks with Arizona-based Banner Health about the possibility of handing over management of its facilities to the much larger company in an effort to combat flagging revenues and increasing costs.

Legislators said they would have to craft a bill that would allow public health care facilities to enter into such partnerships, but several attempts fell by the wayside by the end of last session, including a bill that would have formed a task force to explore the issue further.

It now appears as though Banner’s interest may have waned. Company spokesman Bill Byron said Wednesday morning that he was unaware of any ongoing discussions with HHSC, and declined to comment further.

Avery Chumbley, chairman of the health system’s corporate board, said Wednesday afternoon that HHSC had not had any contact with Banner in recent months.

Chumbley added that HHSC had conversations with other local entities about forming partnerships, but would not elaborate on the details.

Green said he would not be surprised if other nonprofits were to show interest in partnering with HHSC in the coming year. He said he was aware of two bills currently in the draft stages that attempt to address nonprofit partnerships for Hawaii’s public hospitals. Among them is a bill he planned to introduce today.

“I’m going to float a bill which is essentially us trying to encourage local partnerships with hospitals — health care systems already in the state of Hawaii — while also maintaining the same criteria I brought up last session, including honoring people’s history of work in our state, and the benefits that they’ve earned. … That would allow us to begin to reduce the tax burden on our people,” he said.

In reference to the Banner Health discussions, Green said he believed that many people balked at the idea because Banner was from out of state, and therefore was not aware of Hawaii’s unique situation, and had not had time to build relationships with other organizations here.

“The reason for encouraging local people is that they have a full understanding of our state. They understand the health care system and the challenges it faces. They’ve also already built up a relationship of trust,” he said.

Under his bill, companies such as Straub Clinic &Hospital, Hawaii Pacific Health, Queen’s Medical Center and others could partner with public hospitals, provided they follow a few caveats.

“One, services are not to be decreased. Two, the state has to honor all of its responsibilities as far as maintaining full pensions and those accrued by employees,” Green said.

These requirements would help alleviate fears raised during the Banner discussions, when employee unions pegged the company as anti-union.

According to a February 2013 briefing on the Hawaii Government Employees Association website, “If Banner Health takes over, they will most likely terminate all employees and re-hire only those who pass pre-employment requirements. Since Banner Health is against unions, employees will no longer be state employees, and civil servant service status as well as retirement benefits (except what is vested) will be lost.”

“Banner Health may also cut vital services that our communities depend on,” the briefing states. “In addition, Banner Health expects the State of Hawaii to fund at least 50 percent of any capital expenditures — Hawaii taxpayer dollars will be supporting and funding a mainland company to provide Hawaii health services.”

Green added that he heard the same concerns from many of the people he spoke with before the beginning of this year’s session.

Green said the goal is to wean the hospital system off of state subsidies, but any such move will have to be done slowly over a period of years, to give any new partner the opportunity to prepare to shoulder a larger burden.

Email Colin M. Stewart at

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