HMSA and Hawaiʻi Pacific Health have filed with the Department of Justice to integrate and create a new parent organization called One Health Hawaiʻi.
While the determination could be made by the DOJ as soon as a month, it will likely take much longer — even a year. The department will either give clearance for the integration or file a federal lawsuit to block it.
The filing is currently in the first phase of review by the DOJ that will take about 30 days. The department has already started conducting interviews with people involved in the integration. After the initial review, it will then likely make a secondary inquiry, which could last several months.
The filing is not available for public consumption
Lawmakers questioned leaders at Hawaiʻi Pacific Health and HMSA about the integration. However, because the DOJ filing is private and contains proprietary information, it was hard to get at specific impacts.
“ Senator, the reason why the documents are not public is because in order to generate a credible business plan, we literally threw all our data in there,” HMSA CEO Mark Mugiishi told lawmakers.
“ [HPH] threw all their data in there. So people know their pricing, they know their patient mix, they know what we do with everyone, and so the regulators look at that and they can say, 'All right, how does that shake out in the market?' But it's not something that unfortunately, can be publicly facing. It's very sensitive and proprietary.”
What was disclosed from the filing by HPH CEO Ray Vara is the makeup of the 13-member board that would govern One Health Hawaiʻi. It would contain Vara, Mugiishi, three members each from HPH and HMSA and five members from the community at large.
Simultaneously, the state regulatory agencies — the attorney general, the state Health Planning and Development Agency and the Hawaiʻi Department of Health are beginning to evaluate the plan. The regulation process at the state level will likely take less time than the DOJ review, but could include public hearings.
The attorney general has already started its initial review of the integration and is currently looking at whether it would be anti-competitive. While the attorney general is working with the DOJ, it can offer its own findings separately from the federal decision.
HMSA and HPH respond to concerns about the impacts on Hawaiʻi's health systems
One of the key concerns from lawmakers and other hospitals like the Queen's Health Systems is that the integration of HPH and HMSA would shift commercial patients who are better paying and usually healthier to HPH and push the more expensive and vulnerable patients on Medicare and Medicaid to Queen’s.
“ We believe that this really is about having access to commercial patients. And what happens is if you have better access to commercial populations, commercial patients, then everybody else is left to pick up the pieces and the whole health system inflates the whole cost of the health system inflates,” Queen's Health Systems CEO Jason Chang said.
“If commercial patients move away, and we can't sustain the services like behavioral health services or our trauma services. Then all we have to do is what we do in return is that we increase our pricing, and that increases the prices for everybody else.”
HMSA's Mugiishi pushed back on those concerns.
“Let me be very clear. Number one, that is not the intent of One Health Hawaiʻi and it would not be allowed to happen,” he said.
“ The model depends on maintaining access, protecting safety net services, which are provided by all the health systems in various ways, because they all do," Mugiishi said. "Ensuring patients can continue to see the hospitals and doctors that they choose. It also can't logistically happen because there's no capacity in any one place to move anybody there to be selected and shifted.”
Muguiishi and Vara added that the $2 billion in cost-savings that they anticipate from the integration due to decreased administrative costs, would partially be redistributed to the state’s health system at-large, including potentially to Queen’s Health Systems.
Despite the reassurances by HMSA and HPH lawmakers remained concerned about how the integration would work.
“I think I am still hung up on whether the competing interest of the insurance company and the medical provider would be able to exist in the same entity when it comes to the choice of how to use the money whether to lower premiums or to build a hospital or increase pay for doctors,” House Consumer Protection and Commerce Committee Chair Scot Matayoshi said.
“I genuinely hope that One Health works out and that everything you’ve been telling us comes to fruition. But I think I speak for many people in the legislature when I say we are still nervous … until that happens, I think we are all going to be a little doubtful.”
Legislation that would impact the integration is still pending
Meanwhile, lawmakers are still considering a measure that could affect the HMSA, HPH integration. It would prohibit acquisitions and mergers that would lessen access to health care and increase insurance rates. It awaits a third reading in the House.
Matayoshi passed the measure out of his committee earlier this week. He explained that it’s important legislation that would help the state attorney general with its consideration of an integration like the proposed One Health Hawaiʻi.
“ If One Health is doing what they say they're doing and helping the health care community as a whole, then I think that the bill going through won't really have any impact on them,” he said.
“ If the results don't end up being what they say they're gonna be, then I think we are going to be glad we have that bill in place so that the state can act independently of the federal government to try to get ahold of this and make adjustments or maybe even break up the One Health Hawaiʻi partnership for the good of the Hawaiʻi community.”
Senate Consumer Protection and Commerce Committee Chair Jarrett Keohokalole wasn’t sure if the bill was needed and pointed to the private DOJ filing.
“ We can't put conditions on an agreement that we don't know the nature of,” Keohokalole said.
“It's an open question about how the legislature would weigh in, in a meaningful way and in a way that's positive. I think there are lots of unanswered questions and hopefully they're born out through the federal review. Ultimately, is this gonna make Hawaiʻi better off from a health care standpoint or not? And you know, I think everyone is united in the focus on that and that is an important and valuable conversation for us to have right now.”
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