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Monday, July 7, 2008
Hospital layoffs: HMSA, lawyers profit
By Andrew Walden @ 7:37 AM :: 7873 Views

by Andrew Walden

The same problems which are driving doctors out of Hawai`i are again threatening services at the already under funded sister-island Hawai`i Health Services Corp hospitals.

For two years in a row, hammered by demands for medical malpractice reform and demands to introduce more competition into the Hawaii medical insurance market so that doctors and hospitals both would have lower expenses and higher incomes, the Democratic caucus of the State legislature has delivered a flat “no!”

Now the chickens are coming home to roost.

Government employee union members, who have invested so much of their dues money in electing what they thought would be friendly Democratic legislators are getting a rude awakening. Their support is taken for granted. Trial lawyers and the HMSA insurance monopoly out rank them. As a result, dozens of HGEA-represented hospital employees will be laid off. Even worse, services at HHSA hospitals in Hawai`i and Kaua`i Counties will be sharply curtailed, although legislators will claim otherwise in order to avoid triggering the state constitutional requirement that they approve any reduction in services.

The “non-profit” HMSA-Blue Cross insurance monopoly has accumulated $600 million in reserves from the surplus of insurance premiums over payouts for care. This fund allows HMSA to invest in Hawai`i projects and exercise the kind of political power which keeps them in their quasi-monopoly position. The inaction of Hawai`i’s Democratic Congressional delegation has allowed high cost Hawai`i to be lumped in with California in the calculation of Medicare and Medicaid payouts. HMSA payouts are calculated as a percentage of those federal numbers. The result is the emerging sister-island medical care disaster.

The HHSC management has announced a $62 million budget shortfall for the fiscal year starting July 1. The legislature provided only $14 million for the fiscal year ending June 30. Governor Lingle is pledging to speed up state Medicaid payments in order to avert insolvency, but that is just a holding action. Already overtime has been eliminated at several HHSC hospitals. Physicians and other medical professionals will no longer be paid to stay ‘on call’ meaning that some emergencies will not be taken care of until a doctor can be rounded up or until the patient would be transported to O`ahu. Another early cut: physician recruitment programs.

Kona Community Hospital may lay off as many as 60 employees. Layoffs are also proposed for the three HHSC hospitals on Kaua`i and for HHSC corporate headquarters where nine of 60 employees will be furloughed. Maui Memorial officials claim that their operating budget will not be affected in part due to a $100 million capital improvement bond the legislature agreed to guarantee in 2007. This implies that capital funds are being used for operating expenses. Even so, reports from sources on the MMMC staff indicate that some vendors have been balking at providing further good or services to MMMC for fear of not being paid.

Socialized medicine is just as much a failure in Hawaii as it is world wide. This latest mess comes after the state bureaucracy last year denied a request for a so-called “certificate of need” for a privately-funded hospital on Maui. Privately funded hospitals are continuing to attempt to break into the rural Hawaii medical care marketplace. Because of the legislature and Congressional delegation’s aggressive refusal to address the problems facing HHSC, the public call for private hospitals to be allowed on the sister islands will only increase. On the Big Island the only privately-funded hospital is North Hawaii Community Hospital in Waimea. In Maui County and Kaua`i County there are no private hospitals. Without HHSC health care, the nearest hospital for most would be on O`ahu.

In spite of the long and loud warnings, some Democrat Senators and Representatives are still claiming that there is not much of a problem. Lawyer Dwight Takamine, now seeking a Big Island Senate seat claims, “there will be no reduction in service at any of the hospitals.” Perhaps he is indicating that all the soon-to-be-laid off HGEA members were not needed in the first place? Or perhaps he is referring to the “services” provided by trial lawyers, which definitely have not been reduced.

Any reduction in services must be approved by the Legislature. Many legislators do not want to be in the position of voting to cut services in an election year. After threatening to close schools, closing hospitals is a bit much. So the more likely solution is that the problem will be allowed to fester until after November 4.

Senator Russell Kokubun apparently does not read Hawai`i Free Press. He claims: “we were not given the full picture.” Expressing doubt that legislators will return from their busy legal practices to attend to the problem Kokubun says, “(HHSC is) running out of money, and they need to take some measures to address that.”

One of the few Democrats to demand tort reform and higher HMSA payouts, HHSC doctor Rep Josh Green, MD, is facing retaliation from his party. Green defends only the HHSC, opposing the private hospital proposed for Maui--but this is too much for some in his party. Rep Tommy Waters (D-Kaneohe) introduced legislation which would have forced Green to choose between his HHSC job and his legislative seat. Now Green faces Democrat Virginia Isbell in the September 20 primary for the Kona Senate District 3 seat being vacated by retiring Republican Senator Paul Whalen. Also pulling papers in the race is Republican Charles Hosley, former chair of the West Hawai`i Committee.

Waters decided not to seek reelection as it became apparent that Republican Quentin Kawananakoa was entering the HD 51 race.

HHSC is the nation’s fourth-largest public hospital system with 4,200 employees and 800 affiliated doctors.


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