October 30, 2003

Following is a summary of the conference and an outline of follow up actions.

Opening remarks by Dick Rowland, President of GRIH, covered the Hawaii Prepaid Health Care Act (HPHCA), its negative effect on the market for insurance, and employment and employer costs. He went over the agenda (attached) and introduced Merrill Matthews, President of the Council for Affordable Health Insurance (CAHI) as the first speaker. Dr. Matthews outlined the situation for individuals covered for medical insurance under government subsidized, company sponsored plans. True costs tend to be muted and passed on to third parties. This causes the individual and the provider to forget who the customer should be (the patient). Current purposes of the Bush administration is to find ways to restore individual choice and accountability to the system. Current economic trends of smaller work units, less manufacturing and more isolated brain work from home etc is also causing a shift toward individual authority and accountability.

Medical Insurance Accounts although severely restricted in access, still attracted subscribers and 73% of them had been previously uninsured.

J.P. Schmidt, Hawaii Insurance Commissioner then spoke about the current administration’s intent to modify the HPHCA and attain more consumer choice. He expressed the thought that the HPHCA council was obsessed with detail rather than broad policy.

Senator Sam Slom, who is also President of Small Business Hawaii spoke on the history of futile attempts to make the HPHCA more small business friendly and to foster individual customer choice. He expressed hope that this administration would be able to achieve some success.

Dr. Veon Cherewatenko, President of Simple Care, Inc. was not able to attend. Dick Rowland covered the Simple Care concept for him. Simple Care is an organization of care providers and individuals who have banded together to cut the cost of medical care almost in half to the benefit of both providers and patients. This seemingly magic feat is achieved simply by eliminating health insurance payments to providers and replacing then with direct care provided for cash.

Since the Simple Care program is not available in Hawaii, presentations on similar savings programs were presented by:

Don Dawson, Direct Care Hawaii

Dave Muldoon, Care Entrée

A representative of USA Plus

All were similar consumer driven medical care programs funded by cash payments from patients. Robert Blok of Robert Blok and Associates then covered the insurance program that he handles in Hawaii for American National Insurance Company of Texas. This is the only plan available which offers $1000 and over deductibles. These plans are, however, not available to employees covered under HPHCA. Consequently, they are offered very selectively, mostly to single proprietors, consultants, etc.

Merrill Matthews returned to the podium to dismiss the current Bush Medicare Plan and its provisions for Health Savings Accounts (HSA’s). He is a member of a panel which advises the White House on medical care and related insurance matters. He again emphasized the restructuring of health care back toward individual accountability. (And, later, the plan he outlined was approved and signed by the President.)

The program concluded with a discussion between the audience and all participants on problems, ideas and actions to be taken. John Jacobs of HSMA presented his company’s ideas for more consumer health care choice.

It was decided to:

• Work on moving the HPHCA Council toward a more liberal interpretation of the HPHCA itself.
• Encourage the legislature to find a way to modify HPHCA so that more consumer choice could be offered.

Competition:

• Look for and encourage mainland insurance companies to enter our market with higher deductible plans.

Dick Rowland promised to coordinate efforts to accomplish the above.