How Healthy is Healthcare in Hawaii? - Extended Version
Leading doctors and other experts discuss major trends and problems in Hawaii healthcare
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Pressler: Coral, a couple of questions. First, the connector will be up and running in January 2014?
Andrews: Right, January 2014.
Pressler: Will we have everybody insured? Right now, we have about eight percent uninsured in the state. Will we go to zero percent uninsured ever?
Andrews: That is a good question. For those of you watching the news, we’re really not sure what is going to happen to the individual mandate that is being contested, which is part of the Affordable Care Act. So, I would say that conceptually the idea is to reduce that.
Pressler: About two percent?
Andrews: I will have to say fewer than five percent. But I think that we will have to see how it plays out. Certainly, it’s a goal.
Pressler: Okay, one other question. Right now, we have all this federal dollars to get the connector up and running. In 2014, we need to be able to pay for it ourselves. Is that correct? How do we sustain this after the federal dollars dry up?
Andrews: The Health Connector is governed by an interim board so we have a lot of voices at the table, including the insurance companies, and the consensus among the group is that we’re want it to be sustainable by fees assessed on the insurance carriers. As you can imagine, we need a large volume to pass through the exchange, so the ruling on whether or not the individual mandate stands up is going to be critical for us to anticipate how many users will be passing through the exchange.
Bruce Anderson (Hawaii Health Systems Corporation): I think the best single word that best summarizes what we do is safety net. Hawaii Health Systems Corporation or HHSC is the safety net of the care system in the state of Hawaii. We provide emergency services and other essential services to the uninsured, the underinsured, those on Medicaid, and others with special healthcare needs.
There are many other facilities that think of themselves as safety nets but our business is really to keep our doors open and make sure that people in Hawaii have the services they need. In many areas, particularly the rural areas, we are the only providers of healthcare. We work in partnership with physicians and clinics and others in all these communities, but we are the most important and largest provider of care on most of the neighbor islands and, in fact, HHSC is the fourth largest public health system in the United States.
People don’t realize that but it’s a very large system by any standard. We have 13 medical facilities. I’m going to share a little bit about what we are, because people on Oahu often don’t know about HHSC unless they’ve driven by Leahi or Maluhia, but we do provide care on most of the islands. West Hawaii, East Hawaii, Maui, Oahu, and Kauai are separate regions in the HHSC system. Each is very different and has different healthcare needs.
In Maui and the Big Island, we maintain three large acute care facilities that provide the full spectrum of healthcare and they are supported by critical access hospitals, which have an emergency room and provide long-term care to the communities that we serve. On Maui, we have a major facility in Kahului and also a long-term facility in Koloa. On Kauai, we have two facilities that provide care on the east and west side in collaboration with Wilcox, which is a partner of Hawaii Pacific Health. And on Oahu, we really just have two facilities, Leahi and Maluhia, which are primarily long-term care facilities. Kahuku is an affiliate of HHSC and we provide care for the North Shore community, emergency room services, and we have about 25 long-term care beds. So, that’s a basic picture of what we do and what we are, but again, our major function is to provide care and support to those communities in the rural areas. We’re not unlike many other mainland organizations in that respect. The major challenges that we face today are related to maintaining those critical services in view of cutbacks and state funding and the Medicaid QUEST and federal cuts to the Medicare program.
The majority of patients we see are Medicare patients. In fact more than 60 percent are Medicare or Medicaid patients, and as many of you know, funding for these programs are entitlements to the state regardless of the cost and the state received approximately a one-to-one match in federal funding to cover the cost of services to patients who qualify for these programs. If the state cuts back on the eligibility or coverage, the costs are then shifted exclusively to the state that is to you as taxpayers.
The Federal Health Care Reform will actually have a tremendous impact on HHSC. It is projected to adjust the reduction in the market basket. Those are the inflation area adjustments that are rejected, will cost HHSC approximately $56 million and lower Medicaid reimbursements over the next ten years. Exacerbating the situation is that Hawaii receives the lowest investment for hospitals overall. We have an annual budget of about $600 million, receive approximately $72 million from the state in taxpayer’s dollars. In other words about $9 out of $10 are reimbursed by the payers, but we are very concerned by the cutbacks and federal funding, assuming we need to maintain these services.
I just wanted to mention a couple of things we’re doing, in keeping with some of the suggestions that we have heard already. We recently signed a contract with Siemens Healthcare to assist in planning and installing a comprehensive electronic medical record system. We spent $58 million on this project and we will actually spend that much over the next five years, but that will facilitate the transfer of medical records and improve patient safety.
Pressler: Bruce, do you ever foresee a time when the Hawaii Health Systems Corp., the state hospitals — will be self-sufficient and not requiring appropriations every year from legislature?
Anderson: Candidly, no, I don’t. I think we can reduce our expenditures. We have actually looked at increasing efficiencies and we are trying to work more closely with the private sector facilities and coordinating care. So, I think we can work more efficiently. Our workforce is all unionized. Many of you know that. So, we are trying to figure out ways to be more efficient and more flexible in managing our workforce. So, we can reduce the cost but I think there is always going to be a need for a state subsidy to keep the safety net intact.
Pressler: Okay. One other question, which is a little harder, I think, I know there have been consultants that have looked at solutions to the ongoing costs of the State Health Hospital System and recommended privatization of the state hospitals. What are your thoughts on that?
Anderson: Stroudwater Consulting Group recommended that we eliminate the civil service system, which I don’t think is going to happen. My view is to try to make the system work. We are working closely with the unions to try to get that flexibility that the private sector has, going more toward a 30-day daytime off system instead of the excessive vacation and sick leave days that many state workers currently enjoy, but we are looking more to working like a private sector organization would. That’s been the focus for us for the last few months.
Pressler: Now I’m going to give the panelists an opportunity to field a few questions amongst themselves if they wish, and if they don’t wish to, we have lots of questions from the audience. Do any of you want to field any questions to each other? While you’re thinking about that, let me ask one that pertains to all of us. I’ve got quite a few questions here about prevention. Now, why aren’t we focusing on prevention? What are we doing about prevention? Let’s look at this from the perspective of the economic transformation. Who wants to address the issue of prevention?
Tsang: I could start. Prevention has had a slow uptake in terms of policies and that has largely to do with the evidence and in the literature in terms of the economics of prevention. The Congressional Budget Office, as well as a lot of the hardcore literature, hasn’t shown equivocal evidence or unequivocal evidence that prevention saves money. I know that’s counterintuitive but that’s what the evidence shows. But with that said, a lot of what Beth and I are doing does have a prevention aspect because you’re talking about care coordination and you’re talking about identifying outliers in the system that would benefit from interventions. That set of interventions would have a huge prevention piece of it. When you have 200,000 patients in the Medicaid system and you can identify, with the push of a button, which patients have not received a colonoscopy, that’s using technology to do population health and population health management in the area of prevention. We may not have said it explicitly in our talks but I think it’s definitely there.
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