Lawmakers meet with KCH

Medical director: There is no negotiation with HMSA

By ERIN MILLER
West HaWaii today
emiller@westhawaiitoday.com

     Big Island legislators wanted to know Monday how Hawaii came to have the lowest overall reim­bursement rate for hospitals in the country.
     That was one of several ques­tions state senators and represen­tatives posed to Kona Community Hospital administrators and regional board members dur­ing a meeting Monday evening. The answer to that particu­lar question, medical director Barry Blum and interim Chief Executive Officer Earl Greenia said, is a lack of negotiation on the part of the state’s largest health insurance provider.
     “There is no negotiation with HMSA (Hawaii Medical Service Association),” Blum said. “HMSA says what they will do and that’s the answer. This year, HHSC (Hawaii Health Service Corp.) did some standing up and said we’re not going to accept your offer. As a result, there was a slight movement on the part of HMSA.”
     Greenia told Rep. Josh Green, in response to a question the representative raised about the impact of requiring HMSA to reimburse the hospital for services at a rate set at 135 percent of the rate paid by Medicaid, that such a move would have a “significant impact on our bot­tom line.”
     Also a consideration, and a request Green already sent to Gov. Linda Lingle’s office, was the possibility of money from special funds being provided to the hospital to offset some of the immediate cash flow problems.

HOSPITAL: Cutting some services may limit physician recruitment

     Rep. Dwight Takamine pressed Lingle’s West Hawaii liaison, Andy Smith, about the money; Smith said Lingle was awaiting the outcome of next week’s Senate Ways and Means committee meetings before making any decision.
     If the $11 million Greenia said the hospital needs to pay off its out­standing bills, as well as accounts through the end of this fiscal year, became available, Green wanted to know if the hospital would rescind the layoffs announced last month.
     “Josh, if you bring the money to the table, we’ll be very happy to revisit those cuts,” Greenia said.
     The hospital now takes between 120 and 180 days to pay its vendors, Greenia said. Three-quarters of its revenues go for labor costs, includ­ing salary and benefits, and hospital officials are trying to create new ways of bringing in revenue, including a public-pri­vate partnership with Straub Clinic to open an outpatient surgical clinic, he added.
     As Greenia and West Hawaii Regional Board Chairwoman Liz Heiman Zagorodney went through some of the proposals to increase revenue, Rep. Cindy Evans asked why the state shouldn’t force the hospitals to focus on “safety net” services and allow private businesses to enter the state’s health market and take over other services.
     “What is going to be the mission of our safety net hospitals,” she asked.
The comment spurred a variety of reactions from hospital officials, physi­cians and board members. Cutting out the possibil­ity of those services will limit physician recruit­ment, HHSC board mem­ber Rick Vidgen warned.
     “If you take away opportunity for doctors to expand their horizons, you’re not going to attract doctors,” he said. “We can be just a safety net, but it will be a declining sys­tem. People who are any good want an opportu­nity to earn money.”
Greenia noted that the hospital’s radiation and oncology services wouldn’t fit into a safety net designation, but if the state asked that the hospital no longer pro­vide that service, the size of the hospital’s need­ed subsidy would grow, because the unit gener­ates revenue.
     West Hawaii board member Rich McDowell, who is also an emergency room physician, said the state has told the hospital previously to pursue pub-lic-private partnerships that will create revenue.
     “We haven’t been given an opportunity to do what we were told to do,” he said.
     If Kona Community Hospital and Hilo Medical Center were allowed to develop only as safety net hospitals, the communi­ty would not accept the changes, Blum added.
     “A community doesn’t believe it’s enough to have a glorified urgent care,” he said.
     Representatives Bob Herkes, Jerry Chang and Faye Hanohano, as well as Sen. Paul Whalen, did not attend the meeting.