Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Health, to which was referred H.B. No. 1181, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to make an emergency appropriation for the Hawaii Health Systems Corporation (HHSC) to offset the unplanned, unanticipated, and unbudgeted increase in Employees' Retirement System and Health Fund payments.

Testimony supporting this measure was received from the Hawaii Health Systems Corporation, Physician Advisory Group for HHSC, a member of the Maui County Council, Kona Community Hospital and its Medical Executive Committee, Hilo Medical Center and its Medical Executive Committee, Leahi Hospital and its Medical Executive Committee for Maluhia and Leahi Hospital, West Kauai Medical Center, Mahelona Medical Center, Medical Executive Committees of the Kauai Region of HHSC and Maui Memorial Medical Center, North Kohala Community, Kohala Senior Citizens, Hawaii Government Employees Association, AFSCME Local 152, AFL-CIO, Healthcare Association of Hawaii, and seventeen individuals.

Your Committee finds that HHSC is facing severe budget constraints in meeting its obligations to the Employees' Retirement System and its medical vendors. HHSC's situation was created by an unanticipated increase in benefit payments for HHSC employees in fiscal year 2002-2003. Therefore, your Committee finds that the emergency appropriation requested by this measure is necessary and appropriate to ensure HHSC is able to meet its fiscal responsibilities.

Your Committee has amended this measure by increasing the appropriation amount to $14 million, which is the minimum necessary to meet HHSC's obligations.

As affirmed by the record of votes of the members of your Committee on Health that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1181, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1181, H.D. 1, S.D. 1, and be referred to the Committee on Ways and Means.