HPH and HMSA defend 'One Health Hawaii' plan; hospitals and unions warn of monopoly and access risks

HMSA and Hawaii Pacific Health presented the proposed One Health Hawaii partnership to a joint House committee on April 8, telling legislators the integration would better coordinate care and bend the state's rising health-cost curve.

HMSA's representative opened by describing Hawaii's health system as fragmented and cited care coordination, value-based payment and maintenance of provider mix as core objectives of the plan. The speaker said the model envisions a nonprofit parent organization to align strategy and operations while keeping coverage and provider networks under the existing plan and hospital entities. "This model depends on maintaining access, protecting safety net services," the HMSA representative said, adding that regulatory safeguards—statutory oversight by the insurance commissioner and attorney general and federal review—would prevent improper shifting of patients.

HPH's representative told the committee the partnership could generate roughly $2 billion in savings over a decade by consolidating administrative functions, eliminating duplicated case management and aligning incentives to keep people healthier. The witness described three intended uses for those savings: lowering the long-term rate of premium increases, investing in underserved neighbor-island services, and funding upstream social determinants of health such as early-childhood and housing programs. "We're not adding net executives; we are aligning and repurposing dollars to improve care," the HPH representative said.

Opposition voices at the briefing included Jason Chang, CEO of Queens Health Systems, who said the arrangement amountsto a merger that risks vertical integration and could give one combined entity disproportionate leverage over referrals, contracts and provider data. "This is a monopoly," Chang said, urging clearer assurances and enforceable conditions to protect independent providers and safety-net care. Chase Aubrey of Adventist Health Castle and labor leaders represented at the hearing echoed concerns about potential market dominance and the effect on small and neighbor-island hospitals.

Kaiser Permanente Hawaii's president, Ed Chan, said value-based and integrated approaches can deliver results if plan and provider roles remain distinct—but cautioned the state's "fragile" health ecosystem needs measures to preserve competition and access.

Lawmakers used a long question-and-answer period to press HPH and HMSA on how the model would treat small private practices, how bolt-on or partner providers (for example, Queens or Castle) would be negotiated into any shared payment arrangements, and whether One Health would be able to override individual organization decisions. Witnesses described governance documents (a 13-member board including community members and representatives of the two organizations) and said certain operational authorities would stay with the existing entities while the parent organization would set strategic direction.

Committee members repeatedly asked when they or the public could see the filings submitted to regulators. Witnesses said the Department of Justice (DOJ) and the state attorney general have been reviewing proprietary claims and actuarial data in confidence; those materials are not publicly released while inquiries are open. They said regulators can impose conditions if they clear the deal, and described an ongoing DOJ inquiry that could end with either clearance or a lawsuit to block the integration.

A major area of concern at the briefing was behavioral health and Medicaid services. Legislators and provider witnesses warned that inpatient psychiatric capacity is constrained statewide and that patient transfers and service concentration already strain some hospitals. HPH and HMSA said the plan's reinvested savings could be used to expand services where they are most needed, but offered few specifics and welcomed regulatory conditions or metrics to assure the legislature that disadvantaged populations would not be disadvantaged further.

No formal action or vote occurred; witnesses repeatedly said the proposal remains under regulatory review and that the partnership could not proceed without clearance from federal and state authorities. Committee members closed the briefing expressing continued skepticism and a desire for enforceable conditions, public oversight and evidence that savings promised by the proposal would be realized and equitably reinvested.