Bill Text: HI SB506 | 2021 | Regular Session | Introduced
Bill Title: Relating To The Issuance Of Special Purpose Revenue Bonds To Assist Wahiawa General Hospital.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2021-06-28 - Act 101, on 06/25/2021 (Gov. Msg. No. 1203). [SB506 Detail]
Download: Hawaii-2021-SB506-Introduced.html
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THE SENATE |
S.B. NO. |
506 |
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THIRTY-FIRST LEGISLATURE, 2021 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to the issuance of special purpose revenue bonds to assist wahiawa general hospital.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the refinancing of outstanding debt obligations of a health care facility with the proceeds of bonds issued by the State in order to improve the ability of the facility to continue to serve the needs of the residents of its immediate community and the entire State to be in the public interest.
Over the past fifteen years, Wahiawa general hospital has experienced severe financial difficulties due to circumstances beyond its control. These circumstances have included the reopening of Queen's Medical Center West Oahu in Ewa, Oahu; reductions in medicare, medicaid, and private insurance reimbursements; the ongoing shortage of physicians in the State and, in particular, central Oahu; new requirements under the federal Patient Protection and Affordable Care Act; uncertainty in the availability of state and federal funding caused by instability in federal health care policy; and an increasing need for provision of indigent care, which includes the homeless population.
When Hawaii Medical Center-West closed in 2012, Wahiawa general hospital's cases for acute inpatient care nearly doubled and ambulance visits increased by twenty per cent because patients who would have gone to Hawaii Medical Center-West were diverted to Wahiawa general hospital. The Wahiawa general hospital emergency room, which was originally designed to handle ten thousand cases per year, treated over twenty thousand cases annually during the 2012 to 2015 period when Wahiawa general hospital was the only available facility in the region. To meet this increase in demand, Wahiawa general hospital hired more staff and made improvements to the emergency room. However, when Hawaii Medical Center-West was purchased by the Queen's Medical Center West Oahu, the number of emergency room cases sent to Wahiawa general hospital decreased significantly, leading to a drop of approximately twenty per cent per month.
The legislature further finds that many individuals who are seniors, disabled, or poor receive their health insurance coverage through the federal medicare or state medicaid programs. Both of these programs have limitations on the amounts that are paid to healthcare providers for services rendered, as specified by law. From a narrow economic standpoint, the provision of services to individuals who are covered by medicare and medicaid represents a financial loss to physicians and hospitals. More than eighty-five per cent of the patients at Wahiawa general hospital are covered under medicare or medicaid. Only fourteen per cent of admissions are for patients with private insurance. There are far too few privately-insured patients in Wahiawa general hospital's patient population whose private insurance reimbursement rates are much higher to adequately offset the losses generated by inadequate reimbursements for the medicare and medicaid patients. Accordingly, financial losses caused by treating medicare and medicaid patients have been absorbed by Wahiawa general hospital. By law, Wahiawa general hospital is required to treat patients for emergency care, regardless of ability to pay. More importantly, it is the mission of Wahiawa general hospital, first and foremost, to provide quality healthcare close to home for the communities of central Oahu and the North Shore, but also to serve as an integral part of the healthcare network serving all of the people of Oahu and the State.
As the homeless population surrounding Wahiawa general hospital has grown, the number of indigent care cases has also increased, and the number of homeless individuals in central Oahu and the North Shore only continues to grow. Many homeless individuals present with multiple, chronic conditions and have few options to receive care other than the emergency room. With little or no reimbursement available for services provided to many of these patients, the cost of their care must be absorbed solely by Wahiawa general hospital.
The legislature further finds that Wahiawa general hospital serves a community with a higher shortage of doctors than Hawaii Island, Molokai, and most of Maui. The shortage of private care physicians on Oahu has forced Wahiawa general hospital to spend significant additional funds each year to acquire specialized inpatient hospitalists to treat patients since ninety-nine per cent of inpatient admissions arrive through the emergency department. To address these circumstances, Wahiawa general hospital has cut some of its programs, services, and personnel, while allowing basic infrastructure repair and maintenance needs to go unmet. Among other things, Wahiawa general hospital has reduced staff by over one hundred full-time equivalent positions, severely curtailed the long-running family practice residency teaching program in the facility, and cut more than $17,000,000 from the annual budget over the past five years.
The legislature acknowledges that Wahiawa general hospital is the only facility that provides emergency medical services in a vast geographical area extending from Mililani to Wahiawa, Waialua, Haleiwa, and Sunset, which area in total encompasses nearly one-third of the island of Oahu. If Wahiawa general hospital were to close, the nearest emergency room for a person living in Wahiawa would be approximately fourteen miles away. For persons living in Mokuleia or Sunset, the distance would be thirty miles, or double the distance it currently takes to go to Wahiawa general hospital. Furthermore, Wahiawa general hospital is the largest private employer in central Oahu, providing more than four hundred well-paying jobs. Approximately thirty per cent of Wahiawa general hospital's employees live in the community and many more live in the surrounding communities, and most of the full-time employees are members of the International Longshore and Warehouse Union, United Public Workers Union, or Hawaii Nursing Association. The closure of Wahiawa general hospital would be devastating to entire families. Heads of households would need to seek reemployment while keeping up payments for mortgages and utilities, putting food on the table, and doing all they can to make life normal for their children and families. In addition, as employees and their families lose their sources of income, they are not able to purchase goods and services within the community. Thus, shop owners and service providers in the communities where these employees reside will see a decrease in sales, forcing them to possibly reduce hours or staff. The impact of the possible closure of Wahiawa general hospital would be catastrophic to the region and State.
Accordingly, the legislature finds that the continued financial fitness of Wahiawa general hospital is in the public interest and critical to preserving the public health, safety, and welfare of the island of Oahu and the State. The purpose of this Act is to authorize the issuance of special purpose revenue bonds to facilitate the consolidation, liquidation, or both of the long-term debt of Wahiawa general hospital in order to facilitate the continued operation as a health care facility providing for the health, welfare, and safety of the citizens of central Oahu, and the people of the State.
The legislature further finds and declares that the issuance of special purpose revenue bonds under this Act is in the public interest and for the public health, safety, and general welfare.
SECTION 2. Pursuant to part II, chapter 39A, Hawaii Revised Statutes, the department of budget and finance, with the approval of the governor, is authorized to issue special purpose revenue bonds in a total amount not to exceed $12,000,000, in one or more series, for the purpose of assisting Wahiawa general hospital, a Hawaii corporation, for debt consolidation, debt liquidation, or both, necessary to allow its continued operation preserving the health and safety of the central Oahu community and the State. The legislature hereby finds and determines that the consolidation, liquidation, or both, of the long-term debt of Wahiawa general hospital constitutes a project as defined in part II, chapter 39A, Hawaii Revised Statutes, and the financing thereof is assistance to a not-for-profit enterprise that provides health care facilities to the general public.
SECTION 3. The special purpose revenue bonds and the refunding special purpose revenue bonds issued under this Act shall be issued pursuant to part II, chapter 39A, Hawaii Revised Statutes, relating to the power to issue special purpose revenue bonds to assist not-for-profit corporations that provide health care facilities to the general public.
SECTION 4. The department of budget and finance is authorized, from time to time, including times subsequent to June 30, 2021, to issue special purpose revenue bonds in whatever principal amounts the department shall determine to be necessary to refund the special purpose revenue bonds authorized in section 2 and to refund special purpose revenue bonds authorized in this section, regardless of whether the outstanding special purpose revenue bonds or refunding special purpose revenue bonds have matured or are the subject of redemption or whether the refunding special purpose revenue bonds shall be bonds for the multi-project programs described in section 2. In making this determination, the department shall comply with federal law relating to the exemption from federal income taxation of the interest on bonds of the nature authorized by this section.
SECTION 5. The authorization to issue special purpose revenue bonds under this Act shall lapse on June 30, 2026.
SECTION 6. This Act shall take effect on July 1, 2021.
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INTRODUCED
BY: |
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Report Title:
SPRB; Wahiawa General Hospital; Debt Restructuring; Debt Refinancing
Description:
Authorizes the issuance of special purpose revenue bonds for long-term debt restructuring of Wahiawa general hospital.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
