Hawaii Health Care-Chapter 1

COMPETITIVE PRACTICES
IN HAWAII'S HEALTH
CARE INDUSTRY

Chapter 1

INTRODUCTION

House Resolution No. 200, H.D. 3 (see Appendix A), adopted by the state House of Representatives during the 1994 Regular Session, requested the Legislative Reference Bureau to conduct a two-part study to examine the relationships between health plan administration and health care providers, the competitive environment and practices in the State's health plan market place, and the impact and level of state oversight of the industry.

Part I of the study, Factors Influencing Competition Among Health Plan Providers,1 was completed last year and the interim findings of that report are included in chapter 2. This report constitutes part II of the project and covers the competitive practices and state oversight elements of the study. The part I report is an integral part of this study and readers are urged to consider the findings and recommendations in the context of both the part I and part II reports.

Study Parameters and Approach

This report updates the significant changes in the material presented in the 1994 study, examines competitive practices, and how those practices are perceived by those involved in or with the industry. It continues use of the "producer-product- consumer" economic model used in the part I report, with emphasis being placed on the consumer element. The concluding chapter presents a suggested perspective from which to consider issues relating to the prepaid health plan industry as well as specific recommendations for legislative consideration. This chapter addresses issues covered in both parts of the study.

Interviews were used extensively in order to identify the views and concerns of those actually involved in the day-to-day operations of health plan providers. While a number of questionable practices were identified and are described in the report, it must be noted that this report does not attempt to confirm whether or to what extent they may, in fact, occur. Because they are perceived to be "real" elements of the competitive environment, the market place acts and re-acts accordingly.


Table of Contents LRB Studies and Reports