Hawaii Pacific Health (HPH) and the Hawaii Medical Service Association (HMSA) are considering a partnership aimed at enhancing healthcare delivery across the state. This collaboration seeks to improve patient experiences, expand access to services, and ensure long-term financial viability. While these goals could benefit residents of Hawaii, significant questions remain regarding the implications of such a partnership on healthcare costs, quality, and patient choice.
Before any formal agreement is reached, a comprehensive review must be conducted to assess potential impacts on healthcare users. This evaluation should focus on how the partnership might affect costs, the availability of clinical services, and the overall quality of care provided. Currently, Hawaii residents are being encouraged to utilize telemedicine, which can be beneficial. Nevertheless, maintaining a robust workforce of skilled healthcare providers is essential to ensure that patients receive high-quality care when they need it.
The focus on efficiency is crucial but should not come at the expense of reducing the number of healthcare professionals or access to specialized services. The priorities of both organizations must be carefully considered, as healthcare is fundamentally different from other industries; the stakes are considerably higher, with lives hanging in the balance.
HMSA, officially a nonprofit mutual benefit society and a member of the Blue Cross Blue Shield Association, does not pay state taxes on insurance premiums. It is obligated to prioritize the health of its members and reinvest earnings into improving health plans and community initiatives. However, concerns have been raised regarding HMSA’s executive compensation and the transparency of its financial practices. In 2023, the Star-Advertiser reported that HMSA’s board of directors voted to begin compensating themselves, with some board members earning around $100,000 in 2022. Meanwhile, HMSA’s CEO saw a notable increase in compensation from $2.5 million to $3 million during the COVID-19 pandemic, coinciding with significant job losses among staff.
On May 4, 2023, the Star-Advertiser editorialized in favor of a state investigation into HMSA’s nonprofit status, echoing previous legislative concerns regarding high executive pay. A resolution initiated in 2008, led by then-Representative Josh Green, now the governor, questioned the appropriateness of compensation exceeding $1 million. Despite these concerns, executive compensation has continued to rise, prompting calls for a thorough examination of how HMSA allocates its state tax-free premiums.
While HPH is also a nonprofit health system, it is committed to reinvesting its earnings into patient care, community programs, and medical advancements. It faces unique challenges, including Hawaii’s geographical isolation and high operational costs, which threaten the sustainability of its services. To address these challenges, HPH is currently redeveloping the Straub-Benioff Medical Center, a project expected to cost $450 million over five years. In support of this initiative, HMSA recently donated $4 million, marking its largest gift to HPH.
As discussions regarding a potential merger continue, staff at HPH-affiliated Kapi‘olani Medical Center are nearing 60 days on strike, citing concerns over understaffing and insufficient wages. According to health policy analyst Jamie Godwin, consolidation often leads to fewer jobs and reduced wage growth. The terms of any potential merger between HMSA and HPH could significantly influence job security and compensation for healthcare workers.
HMSA has indicated a commitment to maintaining affordable premiums and ensuring access to care, promising “freedom of choice” for patients in selecting healthcare providers. However, concerns linger that a disparity in premiums may arise between those seeking care at HPH facilities and those utilizing other healthcare services.
Both parties describe the ongoing discussions as preliminary, emphasizing that any partnership will require approval from the State Health Planning and Development Agency (SHPDA). The scrutiny surrounding a potential merger is likely to be intense, given the transformative implications for Hawaii’s healthcare landscape. As the situation unfolds, many will be watching closely to ensure that the outcome prioritizes the health and well-being of Hawaii’s residents.
