HMSA accused of
‘stacking the deck’
at meeting

By Ian Lind
Star-Bulletin

Members attending a special meeting of the Hawaii Medical Service Association have approved, in a series of sometimes raucous voice votes, the transfer of powers from the members to the board of directors.

The most controversial amendments virtually eliminate the ability of members to call special meetings or to adopt amendments without the approval of the organization's board of directors.

Other changes authorize HMSA to open branch offices outside the state, delegate investment decisions to one or more investment advisers, and require all board nominees to be screened in advance by a board-controlled nominating committee.

Patricia Chinn, president of the Hawaii Medical Association, said she was appalled by the amendments, which she described as moves to disenfranchise members.

HMSA is the state's largest health insurer, with more than 600,000 individual members and over $1 billion in expenditures each year. The group is a mutual benefit society and has enjoyed legal advantages because of its membership structure.

The amendments to the organization's constitution and bylaws were recommended after six months of discussions, said Hawaiian Electric Industries Vice President Andrew Chang, an HMSA director who headed the effort.

The changes were opposed by the Hawaii Medical Association and the Hawaii Coalition for Health, a patient advocacy group.

Chang said the membership meeting was "the last step in a lengthy process" aimed at ensuring that HMSA's practices are updated to be consistent with present standards for nonprofit groups and to meet challenges ahead in the health care industry.

Richard Ando, a Honolulu doctor who described himself as "a member of HMSA for a couple of generations," questioned the rush to adopt the changes, which were publicly disclosed less than two weeks ago.

Ando suggested postponing action until the next annual meeting.

His move was ruled out of order by HMSA President Michael Chun, who presided over the meeting, and several other moves to allow more time to review the proposals were shouted down by a large majority.

Much of the debate focused on a requirement that a call for a special meeting be supported by at least 3 percent of the total membership, or about 20,000 people. Previously, just 100 members could demand a special meeting.

Chang said the committee had studied at least 10 other plans of similar size, which required between 5 percent and 50 percent.

Others said the change effectively eliminates the right of members to call a special meeting without the backing of the organization's leaders.

Chun said HMSA would not disclose a membership list for use in obtaining necessary signatures.

Chun rejected calls to disclose the number of HMSA employees or representatives of large employer groups who were among the more than 800 members in attendance.

Jacqui Pirl, who said she came to the meeting out of curiosity after reading a newspaper story, said: "You continue to say that you're concerned about the interests of all the members. But anybody with two eyes can see that the entire membership isn't represented, and that most people here were planted to vote your way."

Arlene Meyers, head of the Hawaii Coalition for Health, said she had received an anonymous fax on HMSA stationary alleging the marketing department had been asking "friendly groups" to attend. "Sounds like they're stacking the deck."

HMSA spokesman Fred Fortin acknowledged that HMSA had contacted certain employer groups about the meeting.

Fortin said he did not know how many HMSA employees were released from regular duties to attend, but said as many as 200 staff members might have attended to assist in the meeting.