Island Investment

HAWAII ISN'T LIKE any other place on the planet. The state government is vigilant about protecting its island paradise from imported animal and agricultural invaders, and rightly so. For 11 consecutive years, Conde Nast Traveler magazine has named Maui the best island in the world, and the lush vegetation and flawless climate that surround each of the islands make Hawaii one of the most sought-after vacation destinations.

Healthcare professionals in Hawaii also enjoy some significant advantages, of course. Unlike most other states, the ingress and egress of residents-the health plan members-is not nearly as important a business consideration, so investing in the health of members is a safer bet than on the mainland. The ideal temperatures also encourage healthy outdoor exercise and physical activities year-round for Hawaiians.

Providing healthcare to the Aloha State's 1.3 million residents doesn't guarantee a completely sunny outlook, however. No one knows that better than the CEOs of the three Hawaiian health plans: AlohaCare's John McComas, pictured left; Kaiser Permanente's Janice L. Head, pictured center; and Hawaii Medical Service Assn.'s Bob Hiam (HMSA is a Blue Cross Blue Shield affiliate), pictured right.

"We have a population with a genetic predisposition for diabetes, which is then compounded severely by the adoption of the diet, eating habits and lifestyle of the Western world," Head says. "When you layer those factors on top of each other, you get a lot of health and disease management issues."

Further, the expectations of Hawaiians tend to be higher than many other states when it comes to healthcare. "A lot of people have the misconception that the Prepaid Health Care Act of 1974 [which mandates coverage for employees working 20 hours or more per week] is what enabled Hawaii to cover 90% of its residents," HMSA's Hiam says. "In reality, I don't think as many as 5% got coverage from that Act who didn't have it before."

The roots of health coverage in Hawaii began in the plantations where workers' healthcare was part of employment. Employees are not required to contribute more than 1.5% of their annual salary to the cost of healthcare benefits under the Prepaid Health Care Act. With that restriction, as the cost of premiums increases, the employer is left with a higher and higher proportion of the cost. In addition to assuming almost the entire responsibility for escalating costs, employers don't have the option to drop or greatly alter the benefit. The mandates have sheltered employees from the economic realities of healthcare and have reinforced their higher benefit expectations.