STAND. COM. REP. NO. 1250

Honolulu, Hawaii

RE:    H.B. No. 843

       H.D. 2

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Health, to which was referred H.B. No. 843, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO KAHUKU HOSPITAL,"

begs leave to report as follows:

     The purpose of this measure is to enable Kahuku Hospital to remain in operation and continue to serve the residents and visitors of the north shore of Oahu.

     The measure accomplishes this purpose by authorizing the Hawaii Health Systems Corporation to acquire Kahuku Hospital.  This acquisition will enable the hospital to remain in operation, and retain its certificate of need and critical access hospital designation.

     Your Committee received testimony in support of this measure from the Leahi Hospital, Hawaii Health Systems Corporation, Healthcare Association of Hawaii, United Public Workers, and Hawaii Medical Association.  Your Committee received testimony from the State Procurement Office that was limited to opposing the proposed provision that would exempt Kahuku Hospital from the procurement requirements of chapters 103D and 103F, Hawaii Revised Statutes.  The Office of Information Practices submitted comments.

     Your Committee finds that Kahuku Hospital is in jeopardy of closing its doors as of June 30, 2007, if it cannot be acquired by Hawaii Health Systems Corporation as part of its Chapter 11 bankruptcy reorganization proceeding.  Your Committee further finds that Kahuku Hospital is the only facility in the community offering emergency services and therefore, it is imperative to keep the hospital operating in order to serve the residents and visitors of the north shore of Oahu.

     It is the intent of your Committee that this measure gives authorization, flexibility, and support for Hawaii Health Systems Corporation to acquire Kahuku Hospital and in no way mandates Hawaii Health Systems Corporation to acquire Kahuku Hospital.

     If a voluntary acquisition takes place, your Committee intends for the transition to be based on sound management principles, basic community needs, and not to jeopardize the present support of other hospitals in the Hawaii Health Systems Corporation system.  In addition, the Department of Health estimates that this acquisition will generate approximately $3.9 million in transition costs; $1 million for Hawaii Health Systems Corporation and $2.9 million for Kahuku Hospital.

     Further, it is the intent of your Committee to ensure the continuation of Kahuku Hospital's emergency services while encouraging the development of an alternative model of health care that utilizes federal funding and works in conjunction with community health centers.

     Your Committee amended this measure by exempting the employees of Kahuku Hospital from chapters 76, 87A, 88, and 89, Hawaii Revised Statutes, so they will not be assimilated into the State government employment system

     Your Committee further amended this measure by inserting an appropriation amount of $1.

     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. 843, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 843, H.D. 2, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Health,

____________________________

DAVID Y. IGE, Chair