Don’t call it a merger.
Rather, Hawai‘i Medical Service Association, or HMSA, and Hawai‘i Pacific Health, this week announced plans for a new partnership the leaders of these organizations say will improve access to care and address health care affordability in Hawai‘i.
As part of the partnership, HPH and HMSA would create a new nonprofit parent organization called One Health Hawai‘i “to align strategy, strengthen collaboration and improve coordination statewide across Hawai‘i’s health care system,” an announcement on Wednesday noted.
During a news conference Wednesday, HPH President and CEO Ray Vara, said it was an “exciting day, but it really comes from a premise of something that we all know all too well, and that is that we’ve got a real affordability issue here in the state of Hawai‘i. Frankly, I would argue that it’s the greatest challenge facing our state.”
Health care might not be the single largest contributor to affordability in the Islands, but Vara says it’s “certainly in the top three or four.”
“And as someone who’s an insider in the industry, I’m, frankly, quite concerned,” he continued. “I’m worried about its long-term sustainability. I look at it from a health care provider perspective. I’ve seen it from the outside looking in as from an insurance perspective and I certainly recognize it from a community perspective.”
The intent of One Health Hawai‘i is to create “an affordable, sustainable, high-quality accessible health care system for the people of Hawai‘i,” he says.
Dr. Mark Mugiishi, CEO of HMSA, shared similar sentiments and says it’s time for a structural change.
“The world is replete with examples of companies that didn’t change, right? Whether it’s Blockbuster, Liberty House, there’s a whole bunch of big, big companies in Hawai‘i that don’t exist today because they didn’t evolve,” says Mugiishi, who was born and raised in the Islands and has been in health care for his entire career. “And yet, there are other companies that have done great things evolving. Whether it’s Netflix or Amazon or Uber, they’re all part of our life today because they evolved with what was needed to move us into a new direction of how we live our lives. That’s what we hope this will do for health care and the reason for that is that [an] integrated entity under a common parent that leads in affordability and access will allow us the opportunity to bring a lot of fundamental changes to the way health care is delivered. We’re very, very, very excited to bring that to all of you in the state. That will be part of the mission of both of our great organizations and we’re really, really excited about all of that.”
Mugiishi noted that the proposed system is an open system and that all providers are needed to join.
“We want our members to be able to see the doctor of their choice, to go to the facility of their choice, and so we will include everyone in this initiative that we’re watching,” he says.
Established by social workers in 1938, HMSA is the largest health insurer in the Islands. HPH is a not-for-profit health care system with four medical centers — Kapi‘olani Medical Center for Women & Children and Straub Benioff Medical Center in Honolulu, Pali Momi Medical Center in ‘Aiea and Wilcox Health in Līhu‘e — and other clinics around the state.
Vara noted that this proposal is a partnership or an affiliation rather than a merger, with both HPH and HMSA coming together under a new parent but continuing to operate largely the way they do, respectively. The real opportunity, he says “comes through the efficiencies that we get through alignment between the two entities under the parent.”
The proposal aims to address some of the issues that drive health care costs up, the announcement noted, including minimizing administrative burden such as duplicative paperwork, tests and authorizations; improving chronic condition management through better coordination, targeted outreach and community-based support; shifting appropriate services to lower-cost settings; and eliminating inefficiencies so people can receive health care earlier.
Mugiishi says that for someone looking for a provider or seeking health care, the process should be easier.
“Today the process is very fragmented,” he says. “We have some data about what providers are accepting new patients. Providers have some data about who’s eligible to go see them and what their coverage is like. In an integrated entity, it’s all shared in one database, one understanding, so the process should be much more seamless.”
According to Vara, the proposal will have to go through a number of state agencies to include a certificate of need process, which is overseen by the State Health Planning & Development Agency. Find more about that here.
There also will be conversations with the attorney general and the state insurance commissioner, as well as federal approvals required, he noted, adding that they’ve already had conversations with Gov. Josh Green, himself a physician.
Aloha State Daily reached out to the state Department of Commerce and Consumer Affairs with questions about the proposal for the state insurance commissioner and received a comment from the Hawai‘i Insurance Division in response:
“At this time, it is unclear whether the Insurance Division will have jurisdiction over this proposal. We will need to wait for the HPH-HMSA filings to determine whether there are insurance-related implications. At that time, we will know whether the Insurance Division will be a part of the approval process.”
Vara says the process itself could take between six to 18 months or more.
The boards of both HPH and HMSA have authorized the companies to move forward, and the organizations will now take the next steps in the process, submitting the proposal to the appropriate state and federal agencies for review.
One Health Hawai‘i would be led jointly by Mugiishi and Vara as co-CEOs, and governed by a newly formed board.
Find more information about the proposed plan, including frequently asked questions and what it means for patients, providers and employers, at HealthierHawaiiTogether.com.
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Stephanie Salmons can be reached at stephanie@alohastatedaily.com.
