Bill would create task force on public hospital takeover


State legislators are moving toward creating a task force to consider the implications of privatizing some of the state’s public hospitals.

Legislators introduced two bills this session relating to the proposed turnover of Hawaii Health Systems Corp. hospitals to Banner Health, out of Arizona. The Senate version, SB 1306, originally called for allowing the regional health boards to transition their hospitals to nonpublic status and allow Banner to take over without a competitive bidding process. That bill has made no progress since early March.

On the House side, HB 1483 calls for a task force to study the proposal. Sen. Josh Green, a Kona Democrat who is also a practicing physician, will chair the conference committee, composed of senators and representatives, to discuss that bill. Green said it’s likely the requirement for a task force will remain in the bill, despite some requests to remove it.

“It’s hard to know whether (the task force) will be meaningful or not,” Green said, adding he would want to see the group address three issues.

One, Green wants to know what the implications of privatizing the state’s hospitals would be. Two, he wants to know what are reasonable expectations of state subsidies for private hospitals. Three, he wants to know how much investment a private entity would make in the community.

The senator said he hasn’t heard an update on the status of negotiations between HHSC officials and Banner Health.

HHSC CEO Bruce Anderson referred questions about those discussions to HHSC board Chairman Avery Chumbley, who was attending a special board meeting on Wednesday. A message left on Chumbley’s cellphone was not immediately returned.

Anderson said the board did not take a formal position on the creation of a task force.

“The corporate board did request that the bill be restored to its original form, which was in support of privatization,” he added.

Banner Health is one of the largest nonprofit hospital systems in the country. It owns 23 acute-care hospital and health care facilities in seven states and has more than 36,000 employees, according to its website. The company was looking to take over up to eight of HHSC’s properties, and began discussions with the HHSC board last summer, officials said. Banner was initially interested only in Maui and Big Island hospitals, Chumbley told West Hawaii Today in January.

While semiautonomous, HHSC still relies heavily on state aid to keep its hospitals’ doors open. HHSC receives about $82 million in subsidies a year to fund all 14 public hospitals on five islands, Chumbley said earlier this year, adding a partnership with Banner could help wean the facilities off state subsidies.

Banner was looking at taking over Kona Community Hospital, Hilo Medical Center, Kohala Hospital, Ka‘u Hospital and Hoola Hamakua on Hawaii Island and Maui Memorial Medical Center, Lanai Community Hospital and Kula Hospital in the Maui HHSC region.