STAND. COM. REP. NO.  1715

 

Honolulu, Hawaii

                , 2009

 

RE:   S.B. No. 44

      S.D. 2

      H.D. 2

 

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

 

Sir:

 

     Your Committee on Finance, to which was referred S.B. No. 44, S.D. 2, H.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO THE HAWAII HEALTH SYSTEMS CORPORATION,"

 

begs leave to report as follows:

 

     The purpose of this bill is to better understand the financial situation concerning the Hawaii Health Systems Corporation (HHSC).  More specifically, this bill:

 

(1)  Authorizes the Department of Health (DOH) to assume the liabilities and debts or other obligations of HHSC accrued prior June 30, 1996, by the community hospitals while the community hospitals were operating within DOH's Division of Community Hospitals;

 

(2)  Requires HHSC with the assistance of DOH to determine the amount of liability established prior to July 1, 1996, that still exists; and

 

(3)  Requires the Auditor to contract with an independent auditing entity to perform annual management and performance audits of HHSC that will include a full evaluation of all HHSC assets, liabilities, and contracts that deal with the management, running, and provision of services by HHSC.

 

     The Department of Budget and Finance; HHSC's Corporation Board, East Hawaii Regional Board, and Kauai Regional Board; and United Public Workers Local 646 AFL-CIO opposed this bill.

 

     Your Committee has amended this bill by replacing the provisions concerning the transfer of debt and other obligations of HHSC to DOH, with contents similar to provisions in H.B. No. 694 authorizing HHSC and the Maui Regional System Board to remove the Maui Regional Health Care System (System) and its facilities from HHSC by transferring regional assets to a legal entity that will finance and continue to provide health care services to Maui provided that the transfer:

 

(1)  Is to a legally constituted entity that is financially capable, independent of HHSC, of continuing to provide the same level of health care services currently provided by the System;

 

(2)  Relieves HHSC of all debts, obligations, and liabilities of the System;

 

(3)  Is approved by the legally constituted entity, HHSC corporation board, Maui Regional System Board, and the Governor; and

 

(4)  Cannot take effect prior to July 1, 2012.

 

     Your Committee has retained as Part II, the provisions requiring the annual audit of HHSC.  Your Committee finds that such an audit, conducted under the auspices of the Auditor, is necessary to improve the management and operation of the State's community hospitals.  Your Committee emphasizes that part II is to take effect upon approval, with the first audit of the management and operation of HHSC to be conducted during fiscal year 2008-2009.

 

     Your Committee has further amended this bill by:

 

(1)  Changing the effective date for Part I of the bill to July 1, 2020, to encourage further discussion; and

 

(2)  Making technical, nonsubstantive changes for clarity, consistency, and style.

 


     As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 44, S.D. 2, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 44, S.D. 2, H.D. 2.

 

Respectfully submitted on behalf of the members of the Committee on Finance,

 

 

 

 

____________________________

MARCUS R. OSHIRO, Chair