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HHSC partnership bill falters at last step

April 29, 2014 - 12:05am

A bill that would have authorized Hawaii’s semipublic hospitals to work with private partners won’t become law this year.

Senate Bill 3064, sponsored by Sen. Josh Green, D-Kona, Ka‘u, died late Friday night, when officials failed to release it.

The bill had made significant progress, Green said Monday.

“In spite of an incredible amount of consensus build, there still wasn’t political will (to pass the bill this session),” Green said.

Jay Kreuzer, CEO of Kona Community Hospital, said he was “devastated” by the bill’s abrupt halt, after months of progress in both chambers of the Legislature.

“We need to pull together a plan that’s more sustainable,” Kreuzer said. “Respectfully, the Legislature isn’t able to fund us at the level we need.”

It’s a catch-22 for the Hawaii Health Systems Corp. hospitals, Kreuzer said. Legislators can’t find the funding to cover the hospital’s shortfalls, but also won’t authorize the hospitals to work with private partners who can help the hospitals grow and increase revenue.

“We all want it to be better,” Kreuzer said. “We’ve got to find a way to do it better.”

The final draft allowed for Hawaii-based partners only, Green said. That was a difficult provision to include, because legislators didn’t want to approve a bill that violated the U.S. Constitution’s Commerce Clause. Many meetings with the state Attorney General’s Office resulted in a bill that allowed limiting the partners to organizations with a long, proven track record in Hawaii, Green said.

The bill also created a transition task force, which would have been the group to issue a request for proposals for individual HHSC hospitals seeking private partners, of 19 members. The existing union contracts would have remained in place during the transition from public leadership to private management, Green said, and the transition period would have allowed time for the private partner to draft a new plan with public unions that were authorized to create private bargaining groups for existing employees. Then, after a new plan was in place, state legislators could vote to veto the finalized management plan. Green said the plan veto would have required two-thirds of legislators to vote in favor of it to block a plan — a difficult hurdle to overcome, but one that would have allowed legislators to have some control in case a particularly untenable plan was proposed.

That transition period would offer potential private partners a “no risk” period to test out running the hospital, he added.

This was the Health Committee’s most complicated bill this session, Green said. He plans to reintroduce the bill next session, if he is re-elected in November.

“It’s going to be done fairly, but everyone is going to have to agree to compromise a little bit,” Green said. “Sooner or later, we have to pass a bill like this to allow HHSC to move forward.”

Green said he noted, with some irony, the Legislature approved $15 million in emergency appropriations for HHSC in next year’s budget. The semi-autonomous health system had asked for $18 million, he said.

While some critics of the bill had expressed a desire to see mainland companies be allowed to work with HHSC hospitals, Green said most legislators had opposed that proposal. That could eventually happen, he added.

“If we found nobody was interested in a local suitor, we could look to the outside,” he said.

Kreuzer said a public-private partnership is West Hawaii’s vehicle to get a new hospital. About 40 percent of West Hawaii residents travel off island for medical care, he said, and a partner looking to work with Kona Community Hospital could capture some of that business just by increasing services here.