Hawaii Pacific Health (HPH) has begun discussions with the Hawaii Medical Service Association (HMSA) regarding a potential partnership aimed at enhancing healthcare delivery in the state. HPH, which operates four hospitals, including the Kapi‘olani Medical Center for Women, seeks to collaborate with HMSA, Hawaii’s largest health insurer, to improve patient care, expand access, and ensure long-term financial viability. While these objectives may benefit residents seeking healthcare services, numerous concerns must be addressed before any agreement is finalized.
The proposed partnership raises critical questions about its impact on healthcare costs, quality, patient choice, and the availability of medical professionals in Hawaii. As residents increasingly turn to telemedicine, it remains essential to maintain a robust workforce of trained healthcare providers. A singular focus on efficiency could lead to reduced access to skilled professionals, which is vital for patient care.
Given the unique nature of healthcare, where lives are at stake, it is crucial to scrutinize the motivations behind such partnerships. HMSA operates as a nonprofit mutual benefit society and is a member of the Blue Cross Blue Shield Association. It does not pay state taxes on insurance premiums and is expected to prioritize the health of Hawaii residents by reinvesting earnings into improvements and community initiatives. Recently, however, questions have arisen about HMSA’s executive compensation and priorities, particularly as the organization has faced layoffs while executive pay has increased.
In 2023, the Star-Advertiser reported that HMSA’s board voted to begin compensating its directors, with the highest-paid member earning approximately $100,000. Additionally, HMSA’s CEO saw a salary increase from $2.5 million to $3 million during a time when 107 employees lost their jobs, and 89 positions were transferred out of state. In light of these developments, there have been calls for a state investigation into HMSA’s nonprofit status, echoing sentiments from a 2008 resolution that questioned high executive compensation.
Hawaii Governor Josh Green, who previously supported the resolution, now has the opportunity to address concerns surrounding HMSA’s operations and compensation practices. A thorough examination of HMSA’s executive payouts and the efficient use of tax-free premiums is warranted. Continuous improvements in patient care and fair wages for healthcare workers must be prioritized, whether HMSA and HPH decide to merge or remain separate entities.
HPH, as a nonprofit healthcare system, is committed to reinvesting its earnings into patient care, facilities, and community programs. The organization has highlighted the challenges posed by Hawaii’s geographical isolation and high operational costs, predicting that without significant changes, services may become unsustainable. Despite these challenges, HPH is actively pursuing expansions, including a $450 million redevelopment of the Straub-Benioff Medical Center over the next five years. In a demonstration of support, HMSA recently donated $4 million to this project, marking its largest contribution to HPH.
At the same time, staff at Kapi‘olani Medical Center are currently on strike, citing understaffing and inadequate pay. Union members have expressed concerns that consolidation in healthcare often leads to job losses and reduced wage growth. According to health policy analyst Jamie Godwin, the terms of any potential HMSA-HPH merger could influence job stability and wage growth in the sector.
HMSA has indicated that it aims to maintain affordable premiums and ensure access to care while preserving “freedom of choice” for patients in selecting providers. However, there are concerns that this freedom may come with disparities in premiums between those seeking care at HPH facilities and those choosing other providers.
Discussions between HPH and HMSA remain in the preliminary stages, and any potential partnership would require approval from the State Health Planning and Development Agency (SHPDA). The deliberations surrounding the merger are expected to generate significant debate, as the implications for Hawaii’s healthcare landscape could be profound.
With the potential for transformative changes on the horizon, stakeholders across Hawaii will be watching closely for developments that prioritize the health and wellbeing of residents.
