Worried about cracks in Hawai'i's healthcare system, from the financial collapse of Kahuku Hospital to the uncertainty over helicopter medevac flights on O'ahu, two state House Democrats want to divert about $100 million of state tax revenue each year into a new special fund that could help pay for critical healthcare services.

The bill would take money generated from general excise taxes on health services and put it into a special fund at the state Department of Health. The money then could be drawn down to help hospitals cover emergency on-call doctors, emergency transport, trauma care and rural healthcare. The money, estimated at $98 million this year and $102 million in 2008, also could help subsidize healthcare for part-time workers not covered under the state's Prepaid Health Care Act or others with no health insurance.

The fund also would be available to respond to the unexpected, such as the crisis at Kahuku Hospital or the need to find a civilian operator for medevac flights because of military deployments.

"Rather than raise taxes, why don't we take money that we're already raising from healthcare, keep it within the healthcare system — don't take it and fill potholes on the streets, or paint Aloha Stadium, or put it in the general fund," said Rich Meiers, president of the Healthcare Association of Hawai'i, which represents hospitals and other healthcare providers.

"Let's reinvest it in healthcare."

Kahuku Hospital would have closed at the end of last year if not for an emergency bailout from the state. State officials and lawmakers are in discussions on how to bring financial stability to the hospital, which provides the only emergency room on the North Shore, and bring it into the state-run Hawai'i Health Systems Corp. by this summer.

An Army unit from Alaska has stepped in to provide medevac services on O'ahu because of military deployments for the 25th Infantry Division at Schofield Barracks. The military, which has provided free medevac services for more than three decades, has acknowledged that a civilian operator should be found.

Meiers said a special fund could have helped in both situations, along with addressing the larger, systemic financial difficulties at hospitals.

An Ernst & Young study on financial trends at hospitals, nursing homes, home-care and hospice providers found that many are suffering net operating losses. Among the reasons for the losses are federal and state reimbursement payments through Medicare, the health insurance program for the elderly, and Medicaid, the health insurance program for the poor and disabled, that are lower than the costs of medical care.

"To me, it's thinking outside the box, which we must do to save our healthcare system," Meiers said.

State Rep. Josh Green, D-6th (N. Kona, Keauhou, Kailua, Kona), a physician and chairman of the House Health Committee, and state Rep. Bob Herkes, D-5th (Ka'u, S. Kona), chairman of the House Consumer Protection and Commerce Committee, drafted the bill.

The bill is not part of the House majority package but House leaders said it will be taken seriously this session. Senate leaders also said they would look at the idea.

"It's certainly something that sounds interesting," said state Sen. David Ige, D-16th (Pearl City, 'Aiea), the chairman of the Senate Health Committee, who said he wanted to determine how the fund would fit with the state's existing healthcare spending.

Dr. Chiyome Fukino, director of the state Department of Health, would not comment directly on the bill because it has not been formally introduced, but said, "Prudent investments into the healthcare system are always a benefit to the people of Hawai'i."

Green, an emergency room doctor on the Big Island, said the special fund could help the state cover health services before problems reach a crisis point and become more expensive.

"At the end of the day, we are going to pay for these services no matter what," he said.

Herkes, who helped come up with the idea to finance the fund by diverting general-excise taxes, said his sister-in-law was recently in a car crash on Maui and had to wait days to be transferred by air to O'ahu to see a specialist for her damaged knee.

"This is not unusual," he said. "We've been struggling with basic healthcare issues, especially in rural areas."

Green and Herkes both believe that the amount of money moved into the fund — about $100 million a year — will be an issue of concern for many lawmakers, who might argue it would lock up too much money and leave the state less flexible to respond to other problems.

State Sen. Sam Slom, R-8th (Kahala, Hawai'i Kai), said he has no doubt there are needs in healthcare but opposes special funds because other funds created for a single purpose have been raided in the past to pay for unrelated spending. Money for on-call doctors or trauma care could be provided through the appropriations process without a new fund.

"If a program is worthy then it should stand on its own two feet," Slom said.