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Kaiser, Hawaii Pacific Health gear up for Maui state hospital management proposal

Pacific Business News; Lorin Eleni Gill; 8/7/15

Pacific Business News

Two major Hawaii health care organizations are preparing their proposals to manage the state's public hospitals on Maui.

The Maui Region of the Hawaii Health Systems Corp. was authorized to begin negotiating a partnership with a private entity in June, when Gov. David Ige signed House Bill 1075 into law.

Both Hawaii Pacific Health and Kaiser Permanente Hawaii are vying for the job. Proposals are due Aug. 24.

The partnership would be subject to approval by the governor, HHSC, and the Maui board of directors, and could begin as early as next year.

The Maui region includes Maui Memorial Medical Center, Kula Hospital and Clinic and Lanai Community Hospital.

“We continue to engage staff and physicians in keeping them abreast of the process,” HHSC Maui Region CEO Wesley Lo told PBN. “There is still quite a bit of uncertainty surrounding impact that we can’t know at this time, and naturally, that does lead to some unrest. Our staff remain our priority, so we believe at present, we need to ensure open and honest communication across all fronts to try to get accurate information out as soon as it becomes available."

Mary Ann Barnes, president of Kaiser Permanente Hawaii, says the nonprofit hospital is looking to continue care on the Valley Isle, where it has had a presence for 45 years. Forty percent of Maui residents are Kaiser members, she said.

“We still have to look through the work stream, the people side of it, the financial piece, quality of care, and the facility itself,” she said. “I think in many ways both HPH and Kaiser Permanente, we are part of a larger organizations, do have some efficiencies around things such as a supply chain, revenue cycle, and electronic records. But only when you get there and start operating, then you’ll understand more clearly what kinds of measures you need to put in place.”

Hawaii Pacific Health Executive Vice President, CFO and Treasurer David Okabe says the nonprofit is finalizing its proposal as well.

“As we go through the proposal process, our goal is and always has been to create a sustainable health care system for Maui and Lanai that will grow with the needs of the community and provide access to high quality health care close to home for the residents of Maui County,” he said.

HHSC hospitals across the state have begun to make some cuts to staff and services to address a growing budget deficit.

The Maui hospitals recently announced that $28 million in cuts to jobs and services must be made to break even in the upcoming fiscal year. A private partner would assist in filling that budget gap, advocates say.

The new law authorizes a fixed-term lease, but does not specify a lease term, lease amount, or a state subsidy.

On Thursday, the United Public Workers union filed a complaint for an injunction in federal court in attempt to block the privatization.

UPW is party to two collective bargaining agreements with the state that run through 2017, and claims the partnership would be a breach of contract.

Maui Memorial is the Valley Isle’s only acute medical care facility and serves more than 11,000 inpatients and more than 45,000 emergency room patients each year.

“We believe our community is growing at a pace that this model of management cannot keep up with, so the challenges experienced throughout the system is not the fault of any individual, group, or service, instead, it is the reflection of a rapidly changing industry that requires new ideas and planning to successfully meet the demands of those they serve,” Lo said.

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