Hawai'i Health Systems Corp. was founded more than a decade ago with the idea that rural hospitals can run more efficiently — and thus devote their small pool of resources to better care — if they band together.

That principle still applies in today's healthcare economy, with its even more challenging governmental requirements and limited reimbursements for medical costs.

So the proposal to break up the corporation, sailing through the Legislature in the form of Senate Bill 1792, seems an exceedingly bad idea —one that can only weaken the system of community hospitals at a time when Island residents need them the most.

SB 1792, which is up for a floor vote Tuesday in the House, would separate the HHSC Maui region from the other four regions by creating a regional affiliate corporation.

The corporation was established with the backing of a 1994 task force report that cited the need for community hospitals, formerly administered by the state Health Department, to operate more independently of the state bureaucracy.

SB 1792 quotes one task force finding, that the HHSC "should administer the state facilities in a decentralized fashion, with the facilities to be grouped into five regions." Splitting off the administration of Maui Memorial Medical Center and two small community health centers into their own quasi-public agency is presented as first step toward accomplishing greater local control of healthcare, something many Neighbor Island doctors want.

But establishing an additional agency, with its duplicate administrative costs and complications, is far more likely to create further obstacles to efficient healthcare and will weaken the state's rural hospital system. Further strain on the system is not what the doctor ordered for an island state already struggling with healthcare delivery to its remote communities.

An earlier version of the bill was favored by House Health Committee Chairman Josh Green, who is also a Big Island physician. Green and Maui state Sen. Roz Baker, a sponsor of the original bill, prefer a more measured approach: giving operational authority to regional boards that were envisioned in the original 1996 law but never established.

The House and Senate should revive this strategy in their conference committee and substitute it for the more radical breakup of the HHSC.

The idea of reforming the community hospital agency arose in the aftermath of the extremely contentious debate over the proposed Malulani Medical Center, a second hospital for Maui. The controversy produced a deep rift in the Maui healthcare community between those who favored the idea of private competition for the state-run Maui Memorial and those who worried the public hospital would fail, leaving lower-income patients underserved.

Additionally, Maui doctors frustrated by their lack of influence over decisions affecting their compensation and practices have pushed for more autonomy at the local level. Lawmakers heard their complaints, and SB 1792 is the result. As originally conceived, with allowances for some operational decisions to be made locally, it was a plan with potential.

Unfortunately, the bill has become unwieldy. The creation of a new agency threatens to undermine the stability of healthcare on Maui as well as the rest of the state.

More regional control for rural hospitals is a healthy idea. But legislation needs to carry out that reform without compromising the system with unneeded administrative costs.