HomeMy WebLinkAboutCOM 0932.000 2006-2008
Mtr or 333 Kilauea Avenue, Second Floor
BOB JACOBSON Ben Franklin Building, Hilo, I lawai'i 96720
Councilmember
Chair, Environmental Management Committee Mailing Address: 25 Aupuni Street, Suite 200
Phone: (808) 961-8263
Vice-Chair, Finance Committee
Vice-President Hawaii Stale Association of Counties ofa*'Fax: 961-8912
E- Mail: bjacoacobson(;co.hawaii.hi.us
HAWAII COUNTY COUNCIL
County of Hawai `i
MEMORANDUM c
Date: January 9, 2008
l_
To: Pete Hoffmann, Chair N
and Members of the Hawaii County Council 07)
From: Bob Jacobson, Council Member
District 6
Re: Resolution supporting H.B. 1598
Attached for your review is a resolution supporting H.B. 1598 establishing an agency to operate
a single-payer universal healthcare insurance system.
BJ/bl
&w. x'91-ots
Comm. No. ? Z
Ref. To- W 1
Ref. Date-JA N 10 2004
District 6 - Upper Puna, Kati, and South Kona
Hawaii County Is An Equal Opportunity Provider And Employer
nt~ioy~ Page 1 of 16
Report Title:
Healthcare; Universal
Description:
Establishes agency to operate a single-payer universal healthcare
insurance system.
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HOUSE OF REPRESENTATIVES 1598
TWENTY-FOURTH LEGISLATURE, 2007 H .B . NO.
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO HEALTHCARE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that it is in the best
interest of the State of Hawaii for each and every permanent resident
to have high quality and affordable healthcare insurance coverage.
Healthcare is more than just medical insurance payouts. It includes
cost-saving and early intervention measures to prevent medical
conditions from becoming chronic, permanently disabling, or fatal.
Hawaii's current healthcare insurance complex is a disjointed,
costly, inefficient, and unnecessarily complicated multi-payer
private medical insurance model that is mostly profit-driven,
adversarial, beset with constant cost-shifting and reluctant
healthcare delivery, onerously bureaucratic, and generally
economically irrational. Additionally, healthcare rates are
skyrocketing at or near double-digit annual rates and are creating an
affordability and accessibility crisis for Hawaii's residents.
The three biggest cost-drivers of healthcare in the United
States and Hawaii today are associated with the following:
(1) A profit-driven complex of payment-reluctant multi-payer
health insurance bureaucracies competing to insure only the
healthy and the wealthy, while leaving those who need
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healthcare the most, to the taxpayers;
(2) The lack of a central electronic healthcare database; and
(3) Inordinately high-cost prescription drugs.
For more than a quarter of a century, Hawaii was far ahead of
most other states and often called itself "the health state" because
of the 1974 Prepaid Healthcare Act (PHCA). In 1994 Hawaii had a low
uninsured population of between two and five per cent. But, the
crisis in healthcare on the United States continent began coming to
Hawaii.
Today, more than one hundred thousand Hawaii residents are
without any healthcare insurance coverage. More than twelve thousand
of the uninsured are children. Many other Hawaii residents are
underinsured, unable to use their insurance properly or even at all,
because of increasingly expensive deductibles and out-of-pocket co-
payments for outpatient visits, diagnostic tests, and prescription
drugs, among other factors.
The annual high increase in premium costs translates into
increased employer costs. Under PHCA, private-sector employers are
required to pay health insurance premiums equal to the amount of the
premium that exceeds the cap on employee contributions of one and
half per cent of a full-time employee's pay. Public employers
generally pay even more because of their exemption from PHCA and must
negotiate with their employees for employer-provided family
healthcare insurance.
PHCA does not require employers to provide health insurance
coverage for employees working less than twenty hours per week.
Increasing health insurance costs prompted some employers to hire
individuals to work only part-time, or less than twenty hours per
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week, to avoid having to pay for employee healthcare benefits under
PHCA.
Even well-insured individuals are experiencing problems with
their health maintenance organizations and insurance companies
denying, or very reluctantly dispensing, expensive medicines and
treatments. A 2005 national study by Harvard University found that
about half of all bankruptcy filings are partly due medical expenses,
and most people who file for bankruptcy protection because of medical
problems have health insurance.
The legislature further finds that Canada has for many years had
a tried, tested, and true universal publicly administered healthcare-
for-all healthcare insurance model with one payout agency for
caregivers and providers. A variation of this very successful system
adapted to meet the unique conditions in Hawaii would be very
beneficial for the following reasons:
(1) For union members and their employers, it means taking
healthcare off the negotiating table;
(2) For patients, as taxpayers and insurance premium-payers, it
means significant reductions in overall costs, increases in
benefits, and the slowing of annual inflation cost
increases. It also means a transition from increasingly
uncaring profit-driven healthcare to the restoration of
human-need driven mutually respectful and caring patient-
doctor-nurse-and other caregiver relationships, which in
earlier times were fundamental to meaningful healthcare;
(3) For businesses, large and small, it reduces significant
overhead expenses;
(4) For the local economy, it means keeping almost all
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healthcare dollars in the state;
(5) For government, it means having one integrated electronic
health information database for unprecedented planning and
cost-containment capabilities. It also means relief from
the perceived emerging problem of "unfunded liabilities"
associated with long-term funding of government retiree
lifetime healthcare benefits;
(6) For physicians, nurses, and other caregivers, it means less
paperwork, much less work stress, and much more time with
patients;
(7) For hospitals, community health clinics, home-care
providers, and long-term care facilities, it means
sufficient and dependable annual financing through global
budgets; and
(8) For the general public, it means accessible and affordable
healthcare for every person, and relief from the increasing
stresses of constant worry over the instability of
healthcare coverage.
The legislature declares that single-payer, uniformly-delivered
high-quality healthcare-for-all is a basic human right for Hawaii's
citizens.
The purpose of this Act is to create a unified, single-payer,
universal healthcare system covering all Hawaii residents, similar to
that of Canada's.
SECTION 2. The Hawaii Revised Statutes is amended by adding a
new chapter to be appropriately designated and to read as follows:
"CHAPTER
SINGLE-PAYER UNIVERSAL HEALTHCARE SYSTEM
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§ -1 Definitions. Unless otherwise clear from the context,
as used in this chapter:
"Authority" means the authority.
"Central unified electronic health information system database,"
means a primary, computerized electronic health information system to
store and access medical records for the state-wide single-payer
universal healthcare insurance system.
"County healthcare review boards" means the county bodies tasked
with continuously monitoring healthcare conditions, to assist the
authority to maximize the efficiency and cost-effectiveness of a
single-payer universal healthcare system.
"Global budget" means the annual or monthly lump sum that the
authority pays each hospital, community health clinic, home-care
agency and long-term care facility to cover all operating expenses.
"Healthcare registration cards" means a personalized medical
identification card showing that a permanent resident is covered by
the single-payer universal healthcare system.
"Medically necessary" means procedures, treatments, and other
services that are needed and performed primarily by the physicians
and other qualified healthcare practitioners according to medical
best practices and which are recognized as such by the authority.
"Pay-as-we-go" means monthly healthcare funding and insurance
claims paid-out immediately for those needing "medically necessary"
healthcare.
"Prepaid" means Hawaii's state-funded single-payer healthcare
for all insurance system providing medically-necessary healthcare
services without fees, co-payments, or deductibles at the time
healthcare is needed.
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"State healthcare insurance planning and financing authority"
means the administrator of the universal single-payer healthcare
insurance system for the state of Hawaii.
"Single-payer universal healthcare insurance system" means
covering all permanent residents of the State of Hawaii.
"Universal" means healthcare for all of Hawaii's permanent
residents.
"Universal healthcare provision fund" means the fund used by the
authority to collect funds and pay out claims, and to administer an
emergencies and demographic changes contingencies reserve fund; and a
retraining fund for health field employees affected by the transition
to the single-payer universal healthcare insurance system.
§ -2 Single-payer universal healthcare insurance system;
established. (a) There is established the single-payer universal
healthcare insurance system to provide the same uniformly high-
quality level of "medically necessary" healthcare to all Hawaii's
permanent residents. Private healthcare insurers are prohibited from
duplicating the coverages provided by the single-payer universal
healthcare insurance system.
§ -3 Twenty functional concepts; established. Hawaii state-
funded single-payer universal healthcare insurance system is based
upon twenty functional concepts as follows:
(1) "Universal" the State of Hawaii single-payer universal
healthcare insurance system finances "healthcare-for-all"
which means quality healthcare is "universally available"
on a "prepaid" basis to permanent residents;
(2) "Prepaid" - Hawaii's state-funded single-payer healthcare-
for-all insurance system that provides medically-necessary
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healthcare services without fees, co-payments, or deductibles at
the time of healthcare need. The system operates on a
"pay-as-we-go" basis. Income and other taxes are collected
by the system on an ongoing basis through payroll deduction
and/or at retail checkout counters, or through other
appropriate revenue raising methods, including existing
funding from federal and state; including but not limited
to medicare/medicaid, and prepaid healthcare act funds,
employee union trust fund funds, until full transition is
completed, as the funds for pre-paying for healthcare
services when they are needed. Persons with healthcare
needs may present their healthcare registration cards to
receive medically necessary healthcare services without
ever seeing a bill for them. This represents great savings
over previous billing processes;
(3) "Comprehensive" - the State of Hawaii single-payer
universal healthcare insurance system is "comprehensive" in
that it covers all medically necessary hospital, physician,
dentist, home-care, and long-term care services for every
Hawaii permanent resident;
(4) "Medically necessary" - medically necessary procedures,
treatments, and other services that are primarily the
responsibility of physicians and other qualified healthcare
practitioners according to well-established best practices
which are recognized by the authority. In addition, the
county healthcare review boards shall assess which
prescription drugs, appliances, services, and delivery
modes are:
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(A) Medically necessary; or
(B) Effective; or
(C) Both,
and accordingly make their recommendations to the
authority;
(5) "Accessible" - there is accessibility to one high-quality
level of healthcare-for-all without income or other
barriers;
(6) "High-quality" - uniformly high quality of systemwide
healthcare provision is the standard of the single-payer
universal healthcare system;
(7) "Choice" - patients have their choice of physician,
dentist, and other single-payer universal healthcare system
caregivers;
(8) "Portable" - single-payer universal healthcare system
coverage is portable for permanent residents within and
outside the State of Hawaii.
Portability applies primarily between islands and
counties. Also, portability within the state means that
when employees change employers there is no problem with
having to change healthcare plans. This Act also entitles
Hawaii permanent residents to "receive medically necessary
services in relation to an emergency when absence from the
State is temporary, such as on business or vacation";
(9) "Publicly administered" - the State of Hawaii single-payer
universal healthcare insurance system shall be maintained
and administered by an elected authority.
(10) "Publicly funded" - healthcare insurance premiums are
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directly and indirectly collected through:
(A) Taxes; or
(B) Other authority revenue-raising measures; or
(C) Both; and
deposited immediately into the State's universal healthcare
provision fund. It is used by the authority to collect and
pay out healthcare insurance claims and global budget funds
to institutional providers on a pay-as-we-go basis or
allocated as needed into the universal healthcare provision
fund healthcare pay-outs reserve or both. There shall be a
fiscal firewall between the universal healthcare provision
fund and the state budget;
(11) "Single-payer" - financing of Hawaii's healthcare-for-all
system shall be publicly funded and healthcare insurance
claims shall be paid out to doctors, dentists, hospitals,
and other eligible caregivers and providers by the single
pay-out government agency, or the authority, on a "pay-as-
we-go" basis;
(12) "Pay-as-we-go" - healthcare funding is raised each ongoing
month and insurance claims are paid-out as soon as
practicable, for those needing medically necessary
healthcare;
(13) "Universal healthcare provision fund" - the universal
healthcare provision fund is fundamental to the single-
payer universal healthcare system and is used by the
authority to collect and pay out healthcare insurance
claims and global budget funds to institutional providers
on a pay-as-we-go basis or to be allocated as needed into
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the universal healthcare provision fund healthcare pay-outs
reserve. Part of the purpose of the reserve fund is to
provide retraining grants. The other part is for
healthcare related contingencies to build capital
improvement support funding;
(14) "Fiscal firewall" - medically necessary is the operative
term throughout Hawaii's single-payer universal healthcare
system; but, nowhere more so than in regard to the funding
of the system. The autonomous authority oversees and
maintains the universal healthcare provision fund, which is
completely independent of the state budget;
(15) "Central unified electronic health information system
database" The State of Hawaii single-payer universal
healthcare insurance system collects and maintains in real-
time an up-to-the-minute single central database for
comprehensive, complete, and accurate electronic healthcare
information. This is a very significant major source of
savings and cost-containment which makes the low-cost
financing of comprehensive single-payer universal
healthcare possible. This unified high-tech health
information system, for instance, enables:
(A) Accurate future projections;
(B) Unprecedented planning and cost-containment
capabilities;
(C) Early detection of medical mistakes, malpractice and
fraud; and
(D) Early system-wide sharing of emerging "best
practices";
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(16) "County healthcare review boards" - county healthcare review
boards are elected, independent bodies established by each
county government - along the lines of Oahu's elected
neighborhood board system - to continuously monitor
healthcare conditions in their respective counties to
assist the authority in making the State of Hawaii's
single-payer universal healthcare insurance system fit the
specific healthcare needs of each island;
(17) "Retraining fund" - a retraining fund is collected as part
of the universal healthcare provision fund. The purpose is
to provide cost-effective funding for health field workers
displaced by the transition to the single-payer universal
healthcare system;
(18) "Global budgets" - the authority pays each hospital,
community health clinic, home-care agency, and long-term
care facility an annual or monthly global lump sum to cover
all operating expenses - that is, a global budget.
Hospitals, long-term care facilities, and home-care
agencies, and the authority negotiate the amount of these
payments annually, based on past expenditures, previous
financial and clinical performance, projected changes in
levels of services, wages and input costs, and proposed new
and innovative programs. Hospitals, long-term care
facilities, and home-care agencies may not bill for non-
operating expenses. Hospitals, long-term care facilities,
and home-care agencies may not use any of their operating
budget for expansion, profit, excessive executives'
incomes, marketing, or major capital purchases or leases.
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Major capital expenditures come from the universal healthcare
provision fund, but will be appropriated separately based
upon community needs. Investor-owned hospitals will be
converted to not-for-profit status, and their owners
compensated for past investment. Global budgets for
institutional providers eliminate billing, while providing
a predictable and stable financial support;
(19) "Lifetime individual identification number" - the authority
systematically registers each and every Hawaii permanent
resident with an assigned lifetime identification number so
that they are covered by the system and issues to them a
single-payer universal healthcare system healthcare user
card. Also, this is the first step in bringing all of
Hawaii's healthcare information into one secure, constantly
updated, central unified electronic, computerized health
information system database; and
(20) "Healthcare registration cards" - eligible healthcare users
of the State of Hawaii single-payer universal healthcare
insurance system shall register with the system and be
issued a lifetime individual identification number and a
healthcare registration card to be able to access system
healthcare. Newborn citizens will be registered at birth,
in most cases by the facility where the birth occurs.
§ -4 State healthcare insurance planning and financing
authority. (a) There is established within the department of
taxation, for administrative support purposes, the elected autonomous
authority, to determine the costs of the system, and to gather the
needed financing methods and transition mechanisms, including the
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retraining of affected personnel.
(b) The State of Hawaii office of elections shall prepare and
execute all the necessary procedures for the election of a authority
members in the 2008 elections in accordance with this Act.
(c) Trustee-members of the authority shall be chosen through
statewide election. The authority shall be composed of seven voting
trustee-members, and meet the same age and state residency
requirements as candidates for the state senate. There shall be one
trustee-chairperson member elected with no county residency
requirement. All trustee-members shall be elected by voters
statewide for terms of six years each; except that the terms of the
six non-chairperson trustee members in the first election shall be:
(1) Two each for two, four, and six years, respectively, with
each seat's initial term of two, four, or six years being
determined by lottery conducted by the office of elections;
(2) Three of the non-chairperson trustees shall be residents of
the city and county of Honolulu; and
(3) Three, one each, shall be a permanent resident of Hawaii
county, Kauai county and Maui county, respectively.
(d) Effective Wednesday, November 5, 2008, the authority, as
soon as possible upon taking office shall move to organize according
to the provisions of this Act and in that process to assume the
functions of the state health planning and development agency, which
are hereby transferred to the authority, as well as the
responsibilities associated with being the new State of Hawaii
liaison with the centers for medicare and medicaid services and other
federal healthcare agencies, and to assume prepaid health care act
functions and the Hawaii employer union health benefits trust fund.
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The latter two functions shall be maintained intact and stable until
the full integration of each into the system can be completed by the
authority.
(e) The authority in the spirit of and within the parameters of
the twenty functional-concepts listed herein for Hawaii's single-
payer universal healthcare system, shall:
(1) Start-up and maintain a trust fund comprised of a pay-as-
we-go transfer payments system and contingencies and
restraining reserve fund;
(2) Negotiate and receive all federal, state, and other
appropriate healthcare revenue;
(3) Assess temporary progressive income and general excise
surtaxes for start-up and on-going maintenance of the
system, based on the medically necessary requirements of
healthcare for all Hawaii residents; and for emergency
costs as necessary, for instance, during epidemic or other
medical catastrophe;
(4) Be the single-payer of universal healthcare financing (the
one payout agency) for Hawaii;
(5) Hire a chief executive officer who will be accountable to
the authority trustees for the development and success of
the single-payer universal healthcare system; and
(6) Conduct a continuous and ongoing program of enrollment.
(f) The concurrence of a majority of all members shall be
necessary to make any action of the authority valid.
(g) The salary of the executive director shall be $ a
year and the salaries of the authority chairperson shall be $
a year, and the other member-directors shall be $ a year."
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SECTION 3. This Act shall take effect on July 1, 2007.
INTRODUCED BY:
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