Hawaii’s healthcare debate will leave many feeling the pinch

HONOLULU—Hawaii’s Legislature is nearing the halfway point in its annual session. Senate Bill 1274, a healthcare bill to reconcile the State with the federal Affordable Care Act means some nuanced aspects of healthcare as we now know it in Hawaii may change.

To see Senate Bill 1274, click here

Hawaii’s external review process—the right to have a face-to-face appeal in front of a panel when an insurer denies care—may need to change according to physician and Hawaii Island Senator Josh Green (D).

“The healthcare reform bill is on everyone’s mind still,” Green says. “It represents the biggest change we’ve had in the healthcare system in decades. So right now we’re seeing where the rubber meets the road, where certain issues have to be dealt with and this [external review] is one of them.”

And there are consequences of not dealing with them.

“Right now the reason there is a bill at all is because if we don’t pass a bill, we default to the federal position of whatever they determine is best for the State of Hawaii or Illinois or wherever,” Green explains. “We have to pass some law to clarify how we’ll interface with the affordable care law.”

For people whose lives have been irrevocably changed by having the current incarnation of external review, seeing Hawaii’s process sterilized into a paper streamline makes them very worried.

“People feel they deserve a right to have that face-to-face interaction—and I do, too, I agree with that—however, we’re dealing with a lot of hard realities with this healthcare bill from the federal government,” Green says. “As we deal with some of the smaller pieces of it, it’s giving people some heartburn and that’s what you’re seeing. People don’t always agree with their insurers’ decisions on what they’re entitled to as far as procedures, tests, or medicines. So when it goes into a review process, people wanted to be treated like a human.”

There are some mitigating realities. Green acknowledges that should the bill pass, and he highly doubts it will be in its current form, “it’s going to take a long time for the State to get up to speed.”

The State insurance commissioner will need to certify companies to serve as intermediaries. Then they’ll have to be hired and approved through the State process. And for those cases currently in appeals, he believes they would have to reach completion.

But fees are Green’s biggest concern.

“I’m worried about any process that allowed a commissioner or any entity to assign fees to plaintiffs,” Green says. “That typically is a very unfair process, it disenfranchises individuals. It’s particularly regressive because what it says is if you’re rich, don’t worry, you can handle the system. And if you have less means, you can’t. So that has to be cleared up so any assignment of fees would have to be fair and socio-economically blind.”

But at the center of the concern is still how Hawaii reconciles its prepaid healthcare act with the federal mandate.

“The good news is that in conversations with director [Kathleen] Sebelius at the federal level, we are getting word that the feds are willing to be more flexible on the implementation,” Green says, “in part because they really want to have partners in the implementation of healthcare reform because they don’t want to see any states continue to buck the trend.”

The big questions surround how the financing will play out and how insurers will or won’t support what states serve up. Green says it could happen that at the end of Hawaii’s legislative session: “We say to the feds, our external review process has worked and we ask for an exception. That’s going on in every state.”

Green has taken heat for passing Senate Bill 1274 out of his committee and counters that at this stage, lawmakers are choosing their battles.

“This is the phase of input,” Green says. “In February and March, these are the months when we’re just trying to pick the measures that will make it to conference committee, the ones that we need to act on. This is the time of the year when we get 1,500, 1,800 bills, of which 80 percent or 90 percent won’t make it.”

The heavy lifting on the bills is done in March and April right down the line to the end of the session. Gutted and replaced bills are frequent eleventh hour phenomena—and why Green says we should be looking at the larger issues, the true sea changes in healthcare.

One change is the move by insurers to compensate providers based on positive outcome assessments. In mid-February, HMSA and the Hawaii Health Systems Corporation (HHSC), which represents Hawaii’s community hospitals, signed just such an agreement.

“This is consistent with what’s going on all around the country,” Green explains. “The insurance industry has decided that docs will be held to a certain standard, and the hospitals are grouped in with the docs.”

Historically, none of that was part of the reimbursement structure for the hospitals. The Hawaii Independent Physicians Association (IPA) of which Green is currently the head, is using a slightly different model: the patient centered medical home. It’s a virtual circle of care directed by the doctor. Admittedly, it sounds good, but it remains to be seen whether if in practice it will it be as consumer-centered as promised.

“It could be good,” Green says. “The immediate response is that hospitals and docs are forced to spend more energy on primary healthcare, on preventive healthcare. The patient centered medical homes and outcomes-based hospital contracts put more revenue and resources to primary care and follow up. The ‘losers’ are the hospitals who will have to work harder for their dollars.”

Hawaii may also have to work harder to attract doctors. Hawaii is already at a 20 percent deficit for the number of doctors it should have relative to the State’s population.

Green advocates federal programs offering a 1:1 loan repayment for doctors who come to rural areas. And in Hawaii’s case, rural areas don’t necessarily mean just on the “neighbor islands.”

Attracting doctors also means having a functional State Department of Health. Green is still trying to figure out what happened to former interim health director Neal Palafox, who was Gov. Neil Abercrombie’s choice for the permanent position. The question of whether Palafox’s resignation in January amid a fraud controversy was in fact a hatchet job still lingers in Green mind.

“I’m still looking for some answers,” Green says. “It didn’t make a lot of sense to me as a close witness to the process. I hope in the next month or two we’ll be able to say thank you Neil for giving this a shot. And even if Palafox goes back to the department—as I think he’s committed to doing as a professor of medicine—that he’s absolved of any concern.”

About Palafox’s replacement, Loretta Fuddy, Green’s says his early impression is favorable.

“She’s a hardworking individual,” Green says. “She’s been the acting director and she has performed very well ... I think she’ll be a stabilizing force in the department. I hope that when the decision for her deputy is made that they find a nurse or physician to give her some support clinically.”

But whoever fills that seat, the huge issue for the State and the country is how healthcare delivery and reimbursement will change over the next decade. In Green’s plan is the introduction of a federal bill to simplify the entire system.

“I don’t think America can continue on this path even with the attempts we’re making,” Green warns. “And they are noble attempts ... There’s going to be a moment when the system will either crack or we’ll make that decision to really streamline the healthcare system. I think you’ll see a modified single payer system coming from top levels of government and it’s going to be a very significant improvement for healthcare because it’s going to help docs deal with their patients and free up some money.”

And don’t look for much resemblance to either the Canadian or British systems.

“It will be a uniquely American form of single payer system, where those insurers who have done the best work on these outcomes in this decade,” Green says. “We’ll be able to pick and choose who did well and some of the insurers will become major players for the final transformation of the healthcare system. There will be growing pains this decade. But we’ll find our way to a better healthcare philosophy that will be better for our next generation of families.”

The interview with Sen. Josh Green is on the Town Square archive at www.hawaiipublicradio.org. Reach Beth-Ann Kozlovich at [email protected].