Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Health and Human Services, to which was referred H.B. No. 2709 entitled:

begs leave to report as follows:

The purpose of this measure is to establish accountability for funds received and expended by the hospital and medical facilities special fund.

Testimony in support of the intent of this measure was submitted by the Department of Health.

Your Committee finds that the hospital and medical facilities special fund was originally established to offset expenses of Department of Health (DOH) programs involving hospital and medical facility inspections and educational training programs for staff. Your Committee further finds that this DOH program has evolved into the Office of Health Care Assurance, and thus funds are needed to support activities more focused on educational rather than regulatory activities.

Your Committee also heard H.B. 1072, related to establishing a separate Maui Regional Health Systems corporation. Testimony in support of this measure was submitted by the Office of the Mayor for Maui County, the Maui County Medical Society, Hawaii Medical Association, Maui Economic Opportunity, Lahaina-Honolua Senior Citizens Club, West Maui Taxpayers Association, two Maui physicians, and a Maui county resident. Testimony in opposition to this measure was submitted by the Department of Health, the Hawaii Health Systems Corporation (HHSC), the HHSC Board chair and officers, Maui County Hospital Region, members of the Maui, Kauai, West Hawaii, East Hawaii, and Oahu regional management advisory committees, Kona Community Hospital, Hilo Medical Center, Mahelona Memorial Hospital, West Kauai Medical Center, Maluhia Long-Term Care Health Center, Kohala Hospital, Hawaii Island Radiation Oncology, Inc., Clinical Laboratories of Hawaii, United Public Workers, and Hawaii Government Employees Association.

Your Committee finds that the Maui Memorial Medical Center (MMMC) is the profit-center for the Hawaii Health Systems Corporation, but the MMMC does not reap the benefits of these profits through direct reinvestment back into their facilities and personnel. Your Committee further finds that a pilot project to allow a Maui Regional Health Systems Corporation would test the viability of regional or county health care systems, while still allowing the Hawaii Health Systems Corporation to maintain authority for the management and operations of the remaining health-care facilities.

Upon further consideration, your Committee has amended this measure by:

As affirmed by the record of votes of the members of your Committee on Health and Human Services that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2709, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2709, S.D. 1, and be referred to the Committee on Ways and Means.