STAND. COM. REP. NO. 1106

 

Honolulu, Hawaii

                  

 

RE:    H.B. No. 1112

       H.D. 2

       S.D. 1

 

 

 

Honorable Donna Mercado Kim

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

 

Madam:

 

     Your Committees on Health and Commerce and Consumer Protection, to which was referred H.B. No. 1112, H.D. 2, entitled:

 

"A BILL FOR AN ACT RELATING TO THE HAWAII HEALTH SYSTEMS CORPORATION,"

 

beg leave to report as follows:

 

     The purpose and intent of this measure is to:

 

     (1)  Consolidate the Hawaii Health Systems Corporation operational administration and oversight by eliminating regional system boards;

 

     (2)  Repeal certain limits on operational authority; and

 

     (3)  Authorize Hawaii Health Systems Corporation supplemental bargaining agreements to be negotiated separately for Hawaii Health Systems Corporation employees.

 

     Your Committees received testimony in support of this measure from the Hawaii Government Employees Association, Lanai Community Health Center, Hawaii Primary Care Association, and one individual.  Your Committees received testimony in opposition to this measure from the Hawaii Health Systems Corporation Corporate Board; Hawaii Health Systems Corporation, East Hawaii Region; Hawaii Island Chamber of Commerce; Japanese Chamber of Commerce and Industry of Hawaii; and twenty-three individuals.  Your Committees received comments on this measure from the Department of the Attorney General; Hawaii Health Systems Corporation; Hawaii Health Systems Corporation, Kauai Regional Board; and one individual.

 

     Your Committees find that the Hawaii Health Systems Corporation provides essential hospital and long-term care services, in addition to physician and other health care services throughout the State.  Due to rapid changes taking place in the health care industry, the governing structure of the public hospital system must provide the appropriate flexibility and autonomy needed to compete and remain viable and responsive to the needs of the specific communities served by furthering the development of centers of excellence in health care.

 

     Your Committees also note that this measure is predicated on the assumption that the Maui Regional System of the Hawaii Health Systems Corporation is authorized to enter into an agreement with a private entity to transition one or more of its facilities into a new private Hawaii nonprofit corporation.

 

     Your Committees have amended this measure by deleting its contents and inserting language that:

 

     (1)  Requires the Auditor to conduct a financial and management audit of the Hawaii Health Systems Corporation every five years;

 

     (2)  In preparing and executing all corporation-wide budgets, policies, and procedures or any regional system budgets, policies, and procedures, requires the regional system boards to submit their regional and facility budgets to the Hawaii Health Systems Corporation for approval, amendment, or rejection;

 

     (3)  Exempts employees transitioned to a private entity from chapters 76 and 89, Hawaii Revised Statutes, when the Hawaii Health Systems Corporation or regional systems transition to a private entity;

 

     (4)  Clarifies that the Corporation's exemption from chapter 37D, Hawaii Revised Statutes, for financing agreements applies as long as the aggregate value of financing agreements per fiscal year does not exceed $25,000,000 per region;

 

     (5)  Requires that the regional systems boards approve two-year budgets in alignment with state biennium budgeting;

 

     (6)  Specifies that the corporate board shall approve the two-year budget of the regional system;

 

     (7)  Requires the corporate board to decide the allocation for a service or function for a biennium period when allocation decisions cannot be reached by agreement of the regional and corporate boards;

 

     (8)  Authorizes the Hawaii Health Systems Corporation or any of its regional boards to negotiate its own master collective bargaining agreement for its employees;

 

     (9)  Clarifies that any of the regional systems or facilities may transition by partnering with a private healthcare management system, notwithstanding civil service and related laws;

 

    (10)  Prohibits any employee of the Hawaii Health Systems Corporation who is separated from service as a result of the implementation of a transition plan from suffering any loss of retirement allowance earned; and

 

    (11)  Includes an effective date of July 1, 2015.

 

     As affirmed by the records of votes of the members of your Committees on Health and Commerce and Consumer Protection that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1112, H.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 1112, H.D. 2, S.D. 1, and be referred to the Committees on Judiciary and Labor and Ways and Means.

 

Respectfully submitted on behalf of the members of the Committees on Health and Commerce and Consumer Protection,

 

________________________________

ROSALYN H. BAKER, Chair

 

________________________________

JOSH GREEN, Chair