Hawaii Considers Takeover Of State Hospitals

Published July 1, 2009

Hawaii legislators are considering a pair of bills to provide emergency funds for the state’s Health Department while eliminating the Hawaii Health Systems Corporation, a public-private entity responsible for managing the state’s hospitals. That would put the hospitals essentially under state control.

‘Hospital Bailout’

“This is not the first nor the last time the state will be looking for the best way to bail out its hospitals,” said Pearl Hahn, a policy analyst at the Grassroot Institute of Hawaii. “You don’t need to dig deep to see how poorly HHSC operates the government hospital system.

“The hospitals already receive a $53.6 million subsidy from the state, and asked for $62 million more last year,” Hahn added. “Abolishing the certificate of need would allow entry of private hospitals to compete with the state-run facilities, but this won’t take place any time soon as long as HHSC can frighten the legislature with what may happen as the result of a shutdown.”

House Bill 1064 concerns emergency appropriations to address the Aloha State’s health care budget shortfall. Senate Bill 1673 would shutter HHSC and transfer 13 rural public hospitals under its control to the state Health Department for two years while a successor to the corporation was established.

Spokespersons for HHSC, which has operated hospitals in Hawaii since 1996, warned such a move “would devastate hospitals so dramatically by the first few months of 2011 that emergency rooms and then the hospitals would be closed before the legislature would be able to take corrective action in the 2011 legislature.”

‘Shifting Chairs on Titanic’

The Hawaii legislature’s actions are “an example of shuffling problems elsewhere rather than fixing them,” said Paul Gessing, president of the Rio Grande Foundation. “Hawaii is simply shifting the deck chairs on the Titanic when it comes to moving hospitals to the state Health Department.

“Rather than putting these hospitals under the thumb of the Hawaii government, hospitals should be pushed to compete in as open and free a market as possible,” Gessing continued. “This would require policymakers to free hospitals from some of the regulations they face, but that doesn’t seem to be on the table. Instead, Hawaiians will continue to suffer from inefficient and more costly health care than would otherwise be the case.”

Krystle Russin ([email protected]) writes from Texas.

For more information …

Hawaii Senate Bill 1673: http://www.capitol.hawaii.gov/session2009/lists/measure_indiv.asp

Hawaii House Bill 1064: http://www.capitol.hawaii.gov/session2009/Bills/HB1064_HD1_.HTM