Report Title:

State Hospitals; Privatization

 

Description:

Provides of the privatization of all state hospitals. Requires the Hawaii health systems corporation to prepare a request for proposals to transfer the ownership and management of the corporation's assets and facilities relating to state hospitals to the private sector.

 

THE SENATE

S.B. NO.

1251

TWENTY-FIRST LEGISLATURE, 2001

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO Hospitals.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that there is a need to fully privatize all of the state hospitals.

Act 119, Session Laws of Hawaii 1999, began the process of privatization of services performed by the Hawaii state hospital. Among other things, that Act repealed many of the provisions relating to the Hawaii state hospital; began the transition of the Hawaii state hospital to a secure psychiatric rehabilitation facility for individuals needing intensive therapeutic treatment and rehabilitation; authorized the director of health to privatize functions currently performed at the Hawaii state hospital as appropriate to the clinical needs of the population served in the least restrictive setting; and authorized the department of health to provide for comprehensive community-based programs and services for individuals discharged from the Hawaii state hospital or individuals who might otherwise have been admitted to that hospital. That Act also required the department to monitor and review these programs, services, and individuals.

The legislature finds that there is a need to complete the transition of the Hawaii state hospital to a fully privatized facility by requiring, rather than allowing, the director of health to fully privatize the functions currently performed at the Hawaii state hospital. The reasons for completing the privatization process include increased cost savings to the State, speedy implementation and flexibility, a lack of agency personnel, and the high quality of services provided by the private sector at lower costs.

However, rather than focusing only on the Hawaii state hospital, the legislature finds that privatization is appropriate for all of the state hospitals located throughout the State. The legislature finds that the Hawaii health systems corporation, which was created to provide better health care for all of the people in the State of Hawaii, has not lived up to its promise of improving financial performance even as an independent entity free of bureaucratic state oversight. As the corporation continues to request appropriations from the State to pay for cost overruns, the time has come to privatize those assets and facilities which are under the jurisdiction of the corporation relating to the state hospitals.

Accordingly, the purpose of this Act is to:

(1) Initiate the process of transferring the ownership and management of all state hospitals now within the Hawaii health systems corporation to the private sector through the issuance of requests for proposals; and

(2) Require, rather than allow, the director of health to contract for the development of private in-state psychiatric facilities.

SECTION 2. (a) The Hawaii health systems corporation shall prepare and issue a request for proposals to solicit bids from the private sector to assume the ownership and management of the entire health facilities system relating to all state hospitals that are currently under the control and jurisdiction of the Hawaii health systems corporation. The corporation shall begin preparation of the request for proposals no later than two weeks after the effective date of this Act and shall begin disseminating the request for proposals no later than August 31, 2001.

(b) Prior to finalization of the request for proposals, the corporation shall:

(1) Perform a thorough inventory of all of its assets, including facilities, lands, and equipment that may be subject to transfer of ownership and management;

(2) Thoroughly investigate the field of medical or health facilities management and acquisitions that shall not be limited to this State;

(3) Determine a fair price, with respect to the system and all of its facilities relating to state hospitals under the control and jurisdiction of the corporation and subject to paragraph (1), for:

(A) The transfer of ownership; and

(B) The management of the system; and

(4) Set a reasonable timetable for the dissemination, receipt, review, and analysis of responses to the request for proposals and for the decision and award of contracts for the transfer of ownership and management of the facilities under the control and jurisdiction of the corporation; provided that a final decision to award shall:

(A) Be subject to the approval of the legislature; and

(B) Not be later than June 30, 2002.

(c) Any state department or agency receiving a request from the corporation for assistance shall provide such assistance.

(d) The corporation shall report to the legislature its progress regarding:

(1) The preparation of the request for proposals no later than August 31, 2001;

(2) The receipt, review, and analysis of responses to the request for proposals no later than January 31, 2002; and

(3) The proposed decision to award no later than March 30, 2002.

SECTION 3. Section 26-13, Hawaii Revised Statutes, is amended to read as follows:

"§26-13 Department of health. (a) The department of health shall be headed by a single executive to be known as the director of health.

There shall be, within the department of health, an advisory board to be known as the board of health, which shall advise the director of health on matters within the jurisdiction of the department of health. The board of health shall consist of eleven voting members appointed by the governor as provided in section 26-34 and shall include the director of [[]human services[]] as an ex officio nonvoting member. The appointed members shall include at least one resident of each of the major counties including the county of Kalawao. The appointed members shall serve without compensation but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties.

The department shall administer programs designed to protect, preserve, care for, and improve the physical and mental health of the people of the State. Without limit to the generality of the foregoing, the programs shall include the administration and enforcement of matters and laws of public health of the State, [including the state hospital,] but excluding assistance and care for the indigent and the medically indigent.

(b) The functions and authority heretofore exercised by the board of health (excluding assistance and care for the indigent and the medically indigent) and the department of institutions with respect to [the state hospital] and the dental health treatment function of the department of public instruction as heretofore constituted are transferred to the department of health established by this chapter. The functions and authority heretofore exercised by the department of health with respect to the state hospital are transferred to the private sector.

The governor shall define and differentiate dental health treatment from dental health instruction and shall provide for the gradual transfer of any personnel within the definition of dental health treatment to the department of health. This section shall not be construed to require the transfer from the department of education to the department of health of any dental hygienist having a teacher's certificate and employed by the department of public instruction immediately prior to November 25, 1959."

SECTION 4. Section 26-14.6, Hawaii Revised Statutes, is amended by amending subsection (i) to read as follows:

"(i) Effective January 1, 1993, the functions and authority heretofore exercised by the director of health and the department of health relating to uniformed security employees and security contracts at various state hospitals throughout the State shall be transferred to the department of public safety. Effective July 1, 2001, the functions and authority heretofore exercised by the department of public safety relating to uniformed security employees and security contracts at various state hospitals throughout the State shall be transferred to the private sector."

SECTION 5. Section 88-4, Hawaii Revised Statutes, is amended to read as follows:

"§88-4 Medical aid, etc., when free. Every recipient of any retirement allowance or pension payable by the State or by any county or by any other governmental body or agency created by or under the laws of the State who is actually and solely dependent upon the recipient's retirement allowance or pension for the recipient's maintenance and support or whose total income in whatever form or from whatever source received, including but not limited to, the recipient's retirement allowance or pension and any income of the recipient's spouse or reciprocal beneficiary is less than $2,400 a year shall, for the recipient and the recipient's spouse or reciprocal beneficiary, be entitled to free medical treatment from any government physician employed by the State or any county and to free hospitalization at [any state hospital or at] a hospital where county patients are treated at county expense in the county wherein the recipient resides.

Whenever a retirant or pensioner having a spouse or reciprocal beneficiary dies, then the spouse or reciprocal beneficiary, as long as the spouse or reciprocal beneficiary remains unmarried and does not enter into a reciprocal beneficiary relationship, shall be eligible for benefits under this section."

SECTION 6. Section 334-2.5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§334-2.5[]] Contracts for facilities and services. (a) The director [may] shall contract with any person for:

(1) The development or operation of private in-state psychiatric facilities;

(2) The placement of patients in existing private or public psychiatric facilities; and

(3) The provision of:

(A) Secure psychiatric rehabilitation services;

(B) Crisis intervention and stabilization services;

(C) Intensive treatment and wraparound services;

(D) Diversion services;

(E) Special treatment facilities or therapeutic living programs as defined in section 334-1;

(F) Case management services;

(G) Housing services; and

(H) Other mental health treatment and rehabilitation services.

(b) The department [may operate or] shall contract for a secure psychiatric rehabilitation program for individuals who require intensive therapeutic treatment and rehabilitation in a secure setting. The services authorized by this section shall be for persons:

(1) Involuntarily hospitalized under this chapter for whom the services cannot be reimbursed, covered, or provided by an insurer, plan, or other person;

(2) Committed to the custody of the director under chapter 704; and

(3) Appropriately hospitalized under chapter 704 or 706.

The director shall be responsible for the appropriate placement of all persons placed in facilities or services contracted for [or operated] by the director under paragraphs (1) through (3).

Any such person placed in a facility or services contracted for [or operated] by the director who leaves or remains away from the facility or services, without permission, may be apprehended and returned to the facility or services by any employee of the department or by any police officer without any warrant or further proceeding.

(c) The department shall:

(1) See that patients who receive services under contract [or provided directly by the department] pursuant to subsection (a) receive the care and treatment for which the department has contracted [or for which appropriate services are provided directly by the department];

(2) Make periodic reviews of the records of each person committed to the director's custody or hospitalized pursuant to this chapter, chapter 704, or chapter 706;

(3) In suitable cases, discharge or place on authorized absence persons committed to the director's custody or hospitalized pursuant to this chapter, chapter 704, or chapter 706; and

(4) Keep a medical record of each person committed to the director's custody or hospitalized pursuant to this chapter, chapter 704, or chapter 706."

SECTION 7. Section 334-4, Hawaii Revised Statutes, is amended to read as follows:

"§334-4 Personnel for mental health program. The director shall appoint professional and nonprofessional staff as the director deems necessary to carry out the state mental health program and for which appropriations are available. Positions for psychiatrists are exempted from chapters 76 and 77. The director may employ psychiatrists as needed by the department on a contractual basis, subject to the approval of the governor. The director may appoint an administrator, three associate administrators, a director of psychosocial rehabilitation, a chief of the department of nursing, a risk manager, a patients' rights advisor, and a facilities plant engineer for [the state hospital or] a secure psychiatric rehabilitation facility established pursuant to this chapter and these positions shall be exempt from chapters 76 and 77."

SECTION 8. Section 334-74, Hawaii Revised Statutes, is amended to read as follows:

"§334-74 Transfer of residents of correctional facilities. If any resident of a state correctional facility is in need of acute psychiatric treatment for mental illness, the director of public safety or the officer in charge of the correctional facility may file with the director an application for the transfer of the resident to a facility [operated by the department of health or] at which the director of health contracts for services, together with the certificate of a psychiatrist or psychologist employed by the department showing the need for such treatment, and, upon approval of the application by the director, the official having custody of the resident shall transfer the resident to the facility [operated by the department or] at which the director contracts for care and treatment. The official effecting the transfer of the resident shall keep the director informed of the maximum period of commitment of the resident to the director of public safety, and, if the continued care of the resident beyond the expiration of the period is deemed necessary, the director shall institute the procedures required to detain the resident as a patient notwithstanding the resident's release from the state correctional facility; provided that a judicial hearing pursuant to sections 334-60.2 to 334-60.7 be held by the same circuit court that sentenced the resident. In the event that discharge from the facility [operated by the department or] at which the director contracts for services occurs before the expiration of the maximum period of commitment or confinement, the resident shall be returned to the appropriate state correctional facility.

As used in this section, "resident" means any person serving a sentence in a state correctional facility or any child or minor detained in a state correctional facility."

SECTION 9. Section 334-103, Hawaii Revised Statutes, is amended to read as follows:

"§334-103 Program elements. The following shall be the program elements of the system. These shall be designed to provide, at every level, alternatives to institutional settings. Applicants applying to operate program elements shall show how each of these elements works with the current programs in the community the facility will serve. Applicants may apply for operation under the following program elements:

(1) A short-term crisis residential alternative to hospitalization for individuals experiencing an acute episode or situational crisis. The program shall be available for admissions twenty-four hours a day, seven days a week. The primary focus of this element shall be on reduction of the crisis, stabilization, diagnostic evaluation, and assessment of the person's existing support system, including recommendations for referrals upon discharge. This service in the program shall be designed for persons who would otherwise be referred to an acute inpatient psychiatric unit;

(2) A long-term residential treatment program for clients who would otherwise be living marginally in the community with little or no service support, and who would return many times to the hospital for treatment. It also will serve those who are referred to, and maintained in, [state facilities or nursing homes, or] private [or public] facilities or programs under contract with the director pursuant to section 334-2.5, because they require long-term, intensive support. This service shall be designed to provide a rehabilitation program for the so-called "chronic" patient who needs long-term support in order to develop independent living skills. This program goes beyond maintenance to provide an active rehabilitation focus for these individuals;

(3) A transitional residential program designed for persons who are able to take part in programs in the general community, but who, without the support of counseling, as well as the therapeutic community, would be at risk of returning to the hospital. These programs may employ a variety of staffing patterns and are for persons who are expected to move toward a more independent living setting. The clients shall be expected to play a major role in the functioning of the household, and shall be encouraged to accept increasing levels of responsibility, both in the residential community, and in the community as a whole. Residents are required to be involved in daytime activities outside of the facility which are relevant to their personal goals and conducive to their achieving more self-sufficiency; or

(4) A semisupervised, independent, but structured living arrangement for persons who do not need the intensive support of the system elements of paragraph (1), (2), or (3), but who, without some support and structure, are at risk of requiring hospitalization. The small cooperative housing units shall function as independent households with direct linkages to staff support in case of emergencies, as well as for regular assessment and evaluation meetings. Individuals may use satellite housing as a transition to independent living, or may remain in this setting indefinitely in order to avoid the need for more intensive settings. This element is for persons who only need minimum professional or paraprofessional support in order to live in the community. These units should be as normative as the general living arrangements in the communities in which they are developed."

SECTION 10. Section 336-1, Hawaii Revised Statutes, is amended to read as follows:

"§336-1 Cooperation, U.S. immigration. The director of health shall cooperate with the government of the United States in arranging for the deportation of all alien public charges admitted to or hospitalized at facilities at which the director of health contracts for services formerly provided by the state hospital."

SECTION 11. Section 571-50, Hawaii Revised Statutes, is amended to read as follows:

"§571-50 Modification of decree, rehearing. (a) Except as otherwise provided by this chapter, any decree or order of the court may be modified at any time.

(b) At any time during supervision of a child the court may issue notice or other appropriate process to the child if the child is of sufficient age to understand the nature of the process, to the parents, and to any other necessary parties to appear at a hearing on a charge of violation of the terms of supervision, for any change in or modification of the decree or for discharge. The provisions of this chapter relating to process, custody, and detention at other stages of the proceeding shall be applicable.

A parent, guardian, custodian, or next friend of any child whose status has been adjudicated by the court, or any adult affected by a decree of the court, at any time may petition the court for a rehearing on the ground that new evidence, which was not known or not available through the exercise of due diligence at the time of the original hearing and which might affect the decree, has been discovered. Upon a satisfactory showing of this evidence, the court shall order a new hearing and make any disposition of the case that the facts and the best interests of the child warrant.

A parent, guardian, or next friend of a child whose legal custody has been transferred by the court to an institution, facility, agency, or person may petition the court for modification or revocation of the decree, on the ground that the legal custodian has wrongfully denied application for the release of the child or has failed to act upon it within a reasonable time, or has acted in an arbitrary manner not consistent with the welfare of the child or the public interest. An institution, facility, agency, or person vested with legal custody of a child may petition the court for a renewal, modification, or revocation of the custody order on the ground that the change is necessary for the welfare of the child or in the public interest. The court may dismiss the petition if on preliminary investigation it finds the petition without substance. If the court is of the opinion that the decree should be reviewed, it shall conduct a hearing on notice to all parties concerned, and may enter an order continuing, modifying, or terminating the decree.

(c) Notwithstanding the foregoing provisions of this section the court's authority with respect to the review, rehearing, renewal, modification, or revocation of decrees, judgments, or orders entered in the [hereinbelow listed] classes of proceedings listed in this subsection shall be limited by any specific limitations set forth in the statutes governing these proceedings or in any other specifically applicable statutes or rules. These proceedings are as follows:

(1) Annulment, divorce, separation, and other proceedings under chapter 580;

(2) Adoption proceedings under chapter 578;

(3) Paternity proceedings under chapter 584;

(4) Termination of parental rights proceedings under this chapter; and

(5) [State hospital commitment] Involuntary hospitalization or treatment proceedings under chapter 334.

(d) A decree, judgment, or order committing a child to the care of the director of human services shall be reviewable under this section at the instance of others other than duly authorized representatives of the department only after a lapse of thirty days following the date of the decree, judgment, or order, and thereafter only at intervals of not less than one year.

Notwithstanding this section the court shall not conduct a rehearing of any petition, filed under section 571-11(1), which, following a hearing, has been denied or dismissed."

SECTION 12. All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the department of health and the Hawaii health systems corporation relating to the functions transferred to the private sector entities contracting with the department and the corporation pursuant to this Act shall be transferred with the functions to which they relate.

SECTION 13. If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act, which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 14. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 15. This Act shall take effect on July 1, 2001.

INTRODUCED BY:

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