Hawaii Pacific Health (HPH) is exploring a partnership with the Hawaii Medical Service Association (HMSA), the state’s largest health insurer. This potential collaboration aims to “improve care delivery, elevate the patient experience, expand access, and ensure long-term financial sustainability.” While these objectives could benefit healthcare recipients in Hawaii, several critical questions need addressing before any agreement can move forward.
A thorough review is essential to determine the implications of a partnership on healthcare costs, quality, and patient choice. It must also consider the potential effects on the number of doctors, clinical offices, and hospital beds available in Hawaii. Residents have already been encouraged to utilize telemedicine services, which can be helpful. However, maintaining a robust workforce of trained healthcare providers remains vital to ensure comprehensive care.
Concerns about the motivations of both organizations are also significant. The healthcare industry operates differently than other sectors, with life and death at stake. Thus, prioritizing cost-cutting or maximizing patient flow may not align with the best interests of patients. HMSA, a nonprofit mutual benefit society and member of the Blue Cross Blue Shield Association, is required to prioritize service to its members. It reinvests earnings in health plan improvements and community initiatives, but there are still questions regarding executive compensation and accountability.
Recent reports have highlighted discrepancies in HMSA’s management practices. For instance, in 2023, HMSA’s board of directors voted to implement compensation for its members, with some receiving approximately $100,000. Meanwhile, the CEO’s compensation rose significantly from $2.5 million to $3 million, even as the organization laid off 107 employees and transferred 89 positions out of state. In light of these developments, calls for a state investigation into HMSA’s nonprofit status have resurfaced, echoing a similar resolution introduced by then-Representative Josh Green, now the governor, back in 2008.
Examining the Future of Healthcare in Hawaii
Hawaii Pacific Health, as a nonprofit system, is obligated to reinvest its earnings into patient care, facilities, and community programs. Yet, it has faced challenges due to the state’s geographic isolation and high operational costs. HPH has projected that service could become “unsustainable” without significant changes. Despite these challenges, HPH is actively pursuing expansions, including the redevelopment of the Straub-Benioff Medical Center, which is expected to cost $450 million over the next five years. In May 2023, HMSA made its largest donation to HPH, contributing $4 million toward the project.
As HPH’s Kapi‘olani Medical Center faces a strike by surgical technicians, nurse aides, and housekeeping staff, issues of staffing and compensation are at the forefront. Union members argue that they are understaffed and underpaid, adding complexity to the potential merger discussions. According to health policy analyst Jamie Godwin, consolidation often results in fewer jobs and reduced wage growth, which is a concern for the local workforce.
HMSA has indicated that it intends to focus on affordable premiums and access to care, assuring customers that it will maintain “freedom of choice” in provider selection. However, this promise raises questions about potential disparities in premiums for those seeking care at HPH facilities compared to other providers. Both organizations have stated that discussions are in the preliminary stages, and any partnership would require approval from the State Health Planning and Development Agency (SHPDA).
The ramifications of this potential partnership are significant for Hawaii’s healthcare landscape. With such a transformative possibility on the horizon, stakeholders and residents alike will be closely monitoring developments to ensure that the outcomes align with the best interests of the community. Continuous improvements in care and fair wages for healthcare employees must remain a priority, regardless of the operational structure of HMSA and HPH.
