Lawmakers in Hawaii are debating legislation that proponents say will help the state move toward integrating its fragmented healthcare delivery system.
It would mark the second-and crucial-phase of healthcare reform in a state that already has achieved quasi-universal health insurance coverage.
"I believe we have paid too much attention to health insurance and not enough attention to healthcare," Democrat Lennard J. Pepper, a Honolulu-area representative who is chairman of the state's House Committee on Health, told MODERN HEALTHCARE.
At press time, a House-Senate conference committee was considering legislation establishing a healthcare council that would, among other things, explore integrating the state's healthcare system.
As a result of the passage of the Prepaid Healthcare Act of 1973 and the State Health Insurance Program in 1989, nearly all Hawaiians have health insurance. However, other states have moved faster toward provider integration in response to the growth of managed care, and Hawaii has few physician groups and integrated systems.
"The market is 80% fee-for-service," said Douglas K. Murata, a consultant in Honolulu and former executive at Queen's Health System, Honolulu.
Hawaii's per-capita healthcare expenditures have tracked the national average, although premiums have increased more slowly. Employers have been interested in finding ways to slow premium increases, and, in 1990, the Legislature established a blue-ribbon panel to study various cost-control mechanisms. Among its recommendations was the formation of a healthcare council.
The cost controls achieved by managed care on the mainland have not taken hold in Hawaii because of "a solid entrenchment of the fee-for-service infrastructure," Murata said.
Ironically, Hawaii's Prepaid Healthcare Act, which mandates that employers provide comprehensive health coverage, along with the virtual monopoly of the market by two insurers-Hawaii Medical Service Association, a Blue Cross and Blue Shield plan, and Kaiser Foundation Health Plan-have been disincentives for change. "There has been nothing in Hawaii to drive provider restructuring," Murata said.
With healthcare costs increasing, the solution "can only be found in the healthcare delivery setting, among the providers of care, rather than the insurers of care," he said.
The bill being voted on this week would establish a 14-member healthcare council appointed by the governor. Providers, insurers, business, labor, consumers and state government would be represented. The council would "explore and address the issues of cost containment, quality and access to services," according to a House memo.
"The significance of the proposed legislation lies in the recognition that Hawaii is not the perfect model of healthcare-perhaps it never was. It was the perfect model of universal health insurance coverage," Murata said.
The bill is supported by hospitals and a business and industry coalition called Vision 2000. It is opposed by physicians who believe the council could become a vehicle for government controls.
Doctors have endorsed the idea of an entirely private council, said Jonathan Won, executive director of the Hawaii Medical Association.