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News Release

May 16, 2012
New Agreement Puts Hawai‘i Pacific Health and HMSA Ahead of National Industry Curve

Moani Wright-Van Alst
(808) 952-7566

Hawai‘i Pacific Health and the Hawai‘i Medical Service Association (HMSA) today announced a new five-year agreement – the first of its kind in the state – that will transform Hawai‘i’s health care industry. The agreement, which begins in 2014, ties more than 50 percent of Hawai‘i Pacific Health’s future increases to its ability to achieve or exceed standards in improving quality, mitigating rising costs, and expanding access to care. Very few health care systems and health plans in the country have implemented similar agreements.

Together, Hawai‘i Pacific Health and HMSA believe so firmly in this new model of care that they have agreed to share the savings it will create or share losses if they are unsuccessful. HMSA will make significant investments to help Hawai‘i Pacific Health reach these goals.

“We are excited to enter a new era in our relationship with HMSA,” said Chuck Sted, Hawai‘i Pacific Health’s chief executive officer. “For many years now, Hawai‘i Pacific Health has been transforming our care delivery model and investing in technology infrastructure so we can deliver the highest quality care in the most cost-effective way. Now with the shared vision of HMSA, we are confident that we can create a sustainable health care future for Hawai‘i. Coordinated health care that is patient-focused while providing exceptional service benefits everyone in Hawai‘i.”

HMSA chief executive officer Robert P. Hiam noted, “Our new relationship with Hawai‘i Pacific Health defines success as a mutual effort to increase quality and reduce the rate of health cost increases. This is essential to create a more sustainable health care system for our state.”

The agreement expands on the current contract between HMSA and Hawai‘i Pacific Health by creating a fully integrated system of delivery that rewards the hospitals and physicians for working together to achieve a single set of objectives:

  • Improve Quality – The agreement invests in care measures that will result in saving more lives, reducing hospital readmissions, and improving patient safety.

  • Mitigate Rising Costs – Hawai‘i Pacific Health will work to improve and be measured on the overall efficiency of the network. This means providing the right care in the right place at the right time.

  • Expand Access to Care – Hawai‘i Pacific Health will work to build an infrastructure that will support more patients and provide better access to health care, including the MyHealthAdvantage online patient portal, expanding its primary care physician network, and providing more urgent care and extended-hours access to the community.

“The agreement raises the bar higher for both HMSA and Hawai‘i Pacific Health. Performance standards will become more rigorous and there will be increased reporting on patient health. While the process will have its challenges, in the end we will become more than a health plan and a health care system: We will be allies in improving the well-being of our members and patients,” said Hiam.

“A change this big is never easy and I commend Hawai‘i Pacific Health for setting an example that we hope other providers will follow in our state and even nationally.”

On a national level, Hawai‘i Pacific Health is one of 24 elite health care organizations that are part of PACT – Partnership for Care Transformation, a collaborative of Premier healthcare alliance. Members of the collaborative have demonstrated readiness for health care reform and are working together to improve quality, reduce costs, and promote health and wellness.

Hawai‘i Pacific Health recently released its 2011 Quality Report that shows that all four of its hospitals rank above state and national averages in a number of national measures for hospital quality. According to Sted, “We are so confident in our ability to deliver high quality care that we asked HMSA to partner with us and let us help them design this innovative payment structure that benefits everyone in Hawai‘i. Our next important step will be to partner with our employed and affiliated physicians to support their efforts as the industry works to adjust to the new realities of health care reform.”

The new agreement covers Hawai‘i Pacific Health’s physician network as well as its hospitals – Kapi‘olani Medical Center for Women & Children; Pali Momi Medical Center; Straub Clinic & Hospital, and Wilcox Memorial Hospital – and Kaua‘i Medical Clinic. According to Sted, “The new agreement also creates an opportunity to partner with other physicians in the community to build an integrated system that ultimately will improve health care in Hawai‘i.”

Both Hawai‘i Pacific Health and HMSA are Hawai‘i-based nonprofits with a long history of serving Hawai‘i’s communities.

About Hawai‘i Pacific Health

Hawai‘i Pacific Health is a nonprofit health care system and the state’s largest health care provider, committed to providing the highest quality medical care and service to the people of Hawai‘i and the Pacific Region through its four hospitals, 49 outpatient clinics and service sites, and more than 1,300 affiliated physicians. The system is anchored by its four nonprofit hospitals: Kapi‘olani Medical Center for Women & Children, Pali Momi Medical Center, Straub Clinic & Hospital, and Wilcox Memorial Hospital. They have leading strategic initiatives in women’s health, pediatric care, cardiovascular services, cancer care and bone and joint services. Hawai‘i Pacific Health ranks among the top 5 percent of hospitals nationwide in the adoption of electronic medical records, with system-wide implementation that allows its hospitals and physicians to offer integrated, coordinated care throughout the state. Learn more at

About HMSA

HMSA is a nonprofit, mutual benefit association founded in Hawaii in 1938. It is governed by a community board of directors that includes representatives from health care, business, labor, government, education, clergy, and the community. HMSA is an independent licensee of the Blue Cross and Blue Shield Association.