200 HOUSE OF REPRESENTATIVES H.R. NO. H.D. 3 SEVENTEENTH LEGISLATURE, 1994 STATE OF HAWAII HOUSE RESOLUTION REQUESTING THE LEGISLATIVE REFERENCE BUREAU TO STUDY AND REPORT ON COMPETITIVE PRACTICES OF HEALTH INSURERS, MUTUAL BENEFIT SOCIETIES, AND HEALTH MAINTENANCE ORGANIZATIONS. WHEREAS, through a coordinated set of public-private partnership programs Hawaii has achieved near universal access to health insurance coverage for its people, with costs among the lowest in the nation; and WHEREAS, despite this achievement, health care costs in Hawaii continue to rise faster than the cost of most other goods and services; and WHEREAS, most of Hawaii's residents are enrolled in health plans or Health Maintenance Organizations (HMO) operated by non- profit organizations; and WHEREAS, most of Hawaii's physicians and dentists are participating providers or employees of these organizations; and WHEREAS, some health care providers are contemplating or actually entering the health insurance business, intending to be both providers and insurers of health care; and WHEREAS, concerns have been raised about the impact of this market situation on free competition; and WHEREAS, concerns have also been raised as to the potential for conflict of interest if an organization both provides and pays for services; and WHEREAS, concerns have also been raised over the exclusionary rating and enrollment practices of commercial, for-profit health insurers; and WHEREAS, concerns have been also raised regarding the potential negative impact of overly restrictive state regulation on health care quality, costs, and access; and WHEREAS, the State has a vital interest in ensuring that its residents have adequate access to affordable and quality health care services; now, therefore, BE IT RESOLVED by the House of Representatives of the Seventeenth Legislature of the State of Hawaii, Regular Session of 1994, that the Legislative Reference Bureau is requested to conduct a study of the competitive practices of health insurers, mutual benefit societies, health maintenance organizations, and any other organization providing health care coverage in Hawaii; and BE IT FURTHER RESOLVED that the study include but not be limited to: (1) A review and description of the administrative structures and operations of each of these organizations including persons covered, benefits and services offered, rates, rate setting practices, financial condition, administrative costs, and profits; (2) An assessment of the impact that the size of these organizations have on competition and the cost of health care, and differences in their tax classifications; (3) A determination of the current level of oversight of these organizations by the Department of Commerce and Consumer Affairs and other appropriate state agencies, as well as compliance with federal anti-trust laws and regulations; (4) An assessment of the competitive practices of these organizations and the impact of these practices on the price and quality of health care in Hawaii, including those which may limit access to health care coverage or increase health care costs; (5) An assessment of the impact on competition, quality, and cost of health care that the dual role that many of these organizations carry out may have in both the provision of health care services and payment for services delivered; and (6) Recommendations for guidelines (if any) for the oversight of the practices of these organizations in order to protect the public interest and assure access to affordable, quality health care in Hawaii; and BE IT FURTHER RESOLVED that the Office of Consumer Protection, the Department of Commerce and Consumer Affairs, the Insurance Commissioner, the State Health Planning and Development Agency (SHPDA), the Department of Labor and Industrial Relations, the Department of Health, and other relevant public agencies, and all private health insurers, HMO's, and other packaged benefit providers in the private sector, are requested to cooperate with the Legislative Reference Bureau in conducting this study; and BE IT FURTHER RESOLVED that Phase I of this study involving subjects 1, 2, and 3 be completed and submitted to the Legislature no later than twenty days prior to the convening of the Regular Session of 1995; and BE IT FURTHER RESOLVED that Phase II of the study involving subjects 4, 5, and 6 be completed and submitted to the Legislature no later than twenty days prior to the convening of the Regular Session of 1996; and BE IT FURTHER RESOLVED the Legislative Reference Bureau conduct this study by using to the extent feasible national standards of measurement, state experiences, or other data sets; and BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Director of the Legislative Reference Bureau, the Hawaii Medical Service Association, the Kaiser Foundation Health Plan, the Director of the Office of Consumer Protection, the Director of Commerce and Consumer Affairs, the Insurance Commissioner, the Director of Labor and Industrial Relations, the Director of Health, the Hawaii Association of Health Underwriters, and the Administrator of SHPDA.
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