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. 512, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to establish the Division of Community Hospitals within the Department of Health and abolish the Hawaii Health Systems Corporation and transfer its responsibilities to the division.

Upon consideration, your Committee did not address the merits of this measure and decided to utilize it as a vehicle to address other health issues. Therefore, your Committee conducted a hearing and received testimony on a proposed draft of this measure which:

Your Committee received testimony supporting the proposed draft of this measure from the Hawaii Health Systems Corporation, Leahi Hospital, Kona Community Hospital, Hawaii Health Systems Corporation – Maui Region, West Kauai Medical Center, Mahelona Medical Center, Hilo Medical Center, Hawaii Early Intervention Coordinating Council, Sex Abuse Treatment Center, Hana Community Health Center, Kapiolani Medical Center for Women and Children, Hawaii Primary Care Association, St. Francis Healthcare System, Waianae Coast Comprehensive Health Center, Healthcare Association of Hawaii, Kaiser Permanente, YWCA of Hawaii Island, Wahiawa-Central Oahu Health Center, Molokai General Hospital, Hawaii Coalition Against Sexual Assault, Kapiolani Child-At-Risk Evaluation Program, Wahiawa Hospital Association, Wahiawa General Hospital, Queen's Medical Center, and fourteen individuals.

The Department of Health supported the intent of the proposed draft of this measure but opposed parts II and III.

Your Committee finds that the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) has imposed strict procedures on health care providers to ensure the privacy of patients. Health care providers throughout the State, including the Department of Health, must undergo comprehensive changes to ensure compliance with federal law and secure the privacy of patients, while also facilitating the delivery of health and medical services. Your Committee finds that this measure appropriately modifies State law to facilitate compliance with HIPAA.

With respect to the provisions relating to the disclosure of a mental health patient's medical records for insurance reimbursement claim purposes, your Committee recognizes that these provisions require further review to ensure compliance with federal law. Your Committee, believes, however, that this measure is an appropriate starting point and will work with your Committee on Ways and Means, along with the stakeholders, to formulate the final provisions.

Your Committee further finds that the appropriations provided in this measure are essential to secure the public health, safety, and welfare. These appropriations are for programs and services provided by entities that comprise the very foundation of health care in Hawaii--hospitals. Emergency medical services are also critical. Your Committee is dismayed that these entities must plead with the Legislature every year for money to fund their operations. Pursuant to section 321-1, Hawaii Revised Statutes, the Department of Health has "general charge, oversight, and care of the health and lives of the people of the State." The entities, programs, and services identified in this measure are essential to that mission. In the future, your Committee requests that the Department of Health include these essential programs and services in its budget requests.

Therefore, your Committee has amended this measure by replacing its contents with the provisions of the proposed draft as described above.

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. 512, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 512, H.D. 1, S.D. 1, and be referred to the Committee on Ways and Means.