In the beginning, long before statehood, there were rural hospitals in Hawaii that began as plantation-owned clinics and hospitals or as county-owned tuberculosis sanitariums. From 1950 to 1965, the state gave small subsidies to the counties to help run these facilities. From 1965 to 1967, the hospitals transitioned from county-owned to state-owned facilities, eventually coming under the Division of Community Hospitals within the Department of Health. Money was generally not a big concern. Hospitals often neglected to send out bills and operated under their own annual capitol budgets instead. The DOH became the state’s largest single employer and hospitals served as much to provide employment as to provide health care to our communities.
In the beginning, long before statehood, there were rural hospitals in Hawaii that began as plantation-owned clinics and hospitals or as county-owned tuberculosis sanitariums. From 1950 to 1965, the state gave small subsidies to the counties to help run these facilities. From 1965 to 1967, the hospitals transitioned from county-owned to state-owned facilities, eventually coming under the Division of Community Hospitals within the Department of Health. Money was generally not a big concern. Hospitals often neglected to send out bills and operated under their own annual capitol budgets instead. The DOH became the state’s largest single employer and hospitals served as much to provide employment as to provide health care to our communities.
The original Kona Hospital was founded in 1914 in mauka Kealakekua. In 1939, a new Kona Hospital was built, the wooden structure that now houses the county courthouse and the West Hawaii Community Mental Health Center. In 1975, the hospital was relocated to its present site higher on the hill. In 1982, the hospital became part of the state Health Department. Kona Community Hospital’s annual budget in 1986 was $5 million. It quickly increased as new physicians arrived with new skills and Kona residents demanded that modern medical care be provided locally instead of requiring a flight to Oahu for anything worse than the sniffles. There was dissatisfaction with the old Division of Community Hospitals. In its great wisdom, the Hawaii state Legislature created the entity known as Hawaii Health Systems Corporation in 1996 to run its hospitals but it kept the management of this multi-island public benefit corporation centralized on Oahu, and funded the new system with an amount of money intentionally insufficient. The Legislature never trusted HHSC and wanted to keep it under control, keeping it eternally indebted by requiring special subsidies from the state every year.
The Legislature was successful. HHSC did govern all the hospitals from Oahu and came on bended knee to the Legislature for money every year. In 2007, HHSC was reorganized, giving more local control to each hospital region to better enable the hospitals to manage their clinical responsibilities. But fiscal management never went far from Oahu. The central HHSC board still held the financial reins. While each hospital has become more efficient in its operations and with billing, the cost to run each hospital is always higher than its income and HHSC must continue to beg the Legislature for subsidies every year. This is intentional.
Since the establishment of HHSC and before, our monolithic insurance behemoth, Hawaii Medical Services Association — a nonprofit, mutual benefit association — has continued on its path to reduce the number of physicians in Hawaii. Its goal has been simple. Fewer doctors, less health care, less cost to them, more profit for it to keep and pay its executives (compensation for its chief executive Michael Gold was boosted by 19 percent to $1.3 million last year). They were successful. They have reduced the reimbursement rates for almost all medical treatments to the lowest in the United States. Young doctors with high student loans to pay off have stayed away from here. The only ones to come are those who can be employed. Taking up that challenge, HHSC has been able to hire doctors to come to Hawaii by paying reasonable salaries (lower than on the mainland, but still reasonable) although it cannot actually afford this unless it is subsidized by the Legislature. Know that the Legislature still is able to control availability of medical care here, and in collusion with HMSA keeping reimbursements low, the number of doctors in Hawaii can be kept low.
Far be it for me to impugn the motives of today’s legislators. I’m sure they want Kona’s problems to go away. Several of them attended an informational briefing at Kona Community Hospital on Sept. 22, which was reported in West Hawaii Today Sept. 23 titled “Legislators mull options for hospitals” and heard KCH’s administrators tell them the same facts they’ve told to every legislative committee since time began. The legislators expressed surprise (again). They had the temerity to discount the hard work and sacrifice Kona Community Hospital and its employees have undertaken in response to all the obstacles the Legislature and HMSA put in the way. They still blame KCH for problems created and perpetuated by themselves — and previous legislatures — and HMSA.
Solution? Tell the truth. What is the true cost to maintain our state hospital system? Include not only operating expenses but needed capitol expenses for repair, reconstruction and replacement. Tell the truth about civil service rules. They’re not bad rules — but they can be costly. Look at HMSA. It has never had an independent audit. Then make decisions. Where should our money go? Quality health care is expensive. Is HMSA making the correct decisions? Is our Legislature? Of course we must economize where possible. But decide. Keep our hospitals open and keep our doctors, or get rid of them. If health care isn’t worth funding, tell that to our citizens and tell the visitors not to come here. Tell the truth.
Barry Blum is a physician and resident of Kailua-Kona.
Viewpoint articles are the opinion of the writer and not necessarily the opinion of West Hawaii Today.