THIRTIETH LEGISLATURE, 2020
STATE OF HAWAII
A BILL FOR AN ACT
relating to the hawaii health authority.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. (a) The legislature finds that the human-induced global climate crisis requires thoughtful but bold response on many fronts to make Hawaii communities resilient to the impacts of climate change that threaten the very survivability of the State. Lest Hawaii lose its leadership position in meeting the future of labor, justice and equity, the legislature embraces aloha ‘āina as a Green New Deal to decarbonize Hawaii's systems of food, energy, and transportation and sequester carbon through systems of agriculture, waste management and ecosystem restoration. This solid foundation finds synergies with expanded access to health care, housing and education, multiplying good jobs and ensuring justice and equity for Hawaii's citizens. The following measure represents a forward step in mitigating and adapting Hawaii to inevitable change.
(b) The legislature further finds that the Hawaii health authority was established in 2009 as an autonomous body responsible for the overall health planning for the State and for advising the State on the future capacity needs of the people of Hawaii for health providers, facilities, equipment, and support service providers. However, the legislature finds that the authority has been deprived of resources since late 2014 and needs to be reinvigorated and provided with necessary funding to carry out its duties and responsibilities. This includes developing a comprehensive plan for all individuals in Hawaii.
In developing a comprehensive health plan, the legislature asks the Hawaii health authority to consider including in the comprehensive health plan the use of the all‑payer healthcare model as adopted in the State of Maryland for hospitals. An
all-payer health care model:
(1) Requires the same price for the same service regardless of the source of funding for a given patient, thereby achieving substantial administrative savings and eliminating a major cause of discrimination against sicker, poorer patients, including those covered by medicaid;
(2) Establishes a standardized, simplified fee schedule for independent professionals that is negotiated between the State and associations representing health professionals, and applies to all payers doing business in the State of Hawaii;
(3) Pools hospital funding from all payers so as to pay hospitals with global operating budgets, instead of fee-for-service, eliminating most billing and collection costs, cost-shifting due to losses from uncompensated and under-compensated care, and substantially reducing other hospital administrative costs. Incentives for hospitals shall also be eliminated, allowing for resources to be focused on services that are profitable under fee-for-service, at the expense of needed services that are generally not profitable under fee-for-service, including emergency services, psychiatric services, and geriatric care; and
(4) Outlines actions needed for acquiring medicare and medicaid waivers from the federal government to implement an all-payer health payment system.
(c) The legislature further finds that the unfunded liabilities of the Hawaii employer-union health benefits trust fund must be addressed to avoid potentially millions of dollars in unfunded liabilities in later years and can be done so in the comprehensive health plan. A plan and structure that best address the liabilities that are currently unfunded have the following features:
(1) Provide health benefits to state and county employees and retirees using a self-funding model in which the state retains insurance risk, eliminating the need to pre-fund health benefits as required when contracting health benefits through fully insured health plans;
(2) Cap public employer prefunding through the Hawaii employer-union health benefits trust fund and other post-employment benefits trust fund once the separate accounts for each public-employer have a combined balance of at least $2,000,000,000;
(3) Thereafter, transfer any investment income and interest from the Hawaii employer-union health benefits trust fund and other post-employment benefits trust fund to a newly established rate stabilization reserve fund, which will provide reserve funding to stabilize the Hawaii employer-union health benefits trust fund when the trust fund has insufficient moneys to cover the costs of providing health and other benefits plans for active employees and retirees and their beneficiaries; and
(4) Continue to provide for the use of a portion of transient accommodations tax revenues to supplement deficient county public employer contribution amounts if necessary.
(d) Accordingly, the purpose of this Act is to enable the Hawaii health authority to fulfill its duties and responsibilities, which include developing a comprehensive health plan for all individuals in Hawaii, by:
(1) Directing the Hawaii health authority to submit a comprehensive health plan that includes an all-payer model and a funding source for the unfunded liabilities of the Hawaii employer‑union health benefits trust fund; and
(2) Appropriating funds to the Hawaii health authority for the hiring of an executive director and other staff and expenses necessary for the authority.
SECTION 2. Section 322H-1, Hawaii Revised Statutes, is amended to read as follows:
Hawaii health authority; establishment. (a)
There is established within the department of budget and finance for administrative
purposes the Hawaii health authority.
The authority shall be an autonomous public body corporate and politic
and an instrumentality of the State.
(b) The authority shall be composed of nine
members appointed by the governor as provided in section 26-34; provided that
three members shall be appointed from a list of nominees submitted by the
speaker of the house of representatives and three members shall be appointed
from a list of nominees submitted by the president of the senate[
. All]; provided further that beginning July
1, 2020, the governor shall provide for staggered terms. Thereafter, all members shall be
appointed for terms of four years each. The
majority of the members shall be health care professionals with direct patient
care experience. All members must share
a commitment to the goal of an integrated universal health care system covering
all residents of Hawaii, and the members shall be representative of the
diversity of the citizens of the State.
One member shall be selected to be the
executive director and confirmed by a majority vote of a quorum of the members
of the Hawaii health authority.] The authority shall hire an executive
director who shall be exempt from chapter 76 and such other staff as necessary
to assist in the performance of the authority's duties and
responsibilities. The staff of the
authority shall be hired without regard to chapter 76; provided that the
executive director and staff shall be eligible to participate in state employee
(d) Each member shall hold office until the member's successor is appointed and qualified.
(e) Five members shall constitute a quorum, whose affirmative vote shall be necessary for all valid actions by the authority.
(f) The authority may incur expenses as it finds necessary to perform its duties and responsibilities. The authority shall submit an annual report accounting for its spending to the director of finance and to the legislature no later than twenty days prior to the convening of each regular session."
SECTION 3. Section 322H-2, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:
"(e) The authority shall submit [
comprehensive health plan for all individuals in the State, including its
findings and recommendations, to the legislature no later than twenty days
prior to the convening of the regular session of 2012.] an updated
comprehensive plan using an all-payer healthcare model and resolving unfunded
liabilities of the Hawaii employer-union health benefits trust fund to the
legislature no later than twenty days prior to the convening of the regular
session of 2021. The authority shall additionally
survey matters relating to healthcare in the State of Hawaii, including
findings and recommendations regarding such matters, and shall submit annual
reports to the legislature no later than twenty days prior to the convening of
each regular session."
SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $250,000 or so much thereof as may be necessary for fiscal year 2020-2021 to the Hawaii health authority for the hiring of an executive director and other staff expenses necessary to carry out its duties and responsibilities.
The sum appropriated shall be expended by the Hawaii health authority for the purposes of this Act.
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect on July 1, 2020.
Hawaii Health Authority; Comprehensive Health Plan; Unfunded Liabilities; Appropriation
Directs HHA to submit to the legislature a comprehensive health plan that includes an all-payer model and a funding source for the unfunded liabilities of the employer-union health benefits trust fund. Amends the requirements for appointment to HHA. Appropriates funds to HHA for the hiring of an executive director and other staff and expenses necessary for the authority.