In Health, Maui Division, Private Sector, Privatization, Supreme Court

By Melissa Tanji; Maui News; August 20, 2016

The 9th Circuit Court of Appeals cleared the way for the operational transfer of the quasi-public Maui County hospitals to Kaiser Permanente’s Maui Health System on Friday by lifting its injunction and dismissing the appeal filed by the United Public Workers union.

The appeals court took its action after a settlement was announced last week between Gov. David Ige’s administration and the UPW, one of two unions representing workers at Maui Memorial Medical Center, Kula Hospital and Lanai Community Hospital. The UPW, which was appealing an unfavorable ruling in federal court in Hawaii, claimed that the public-private partnership violated the U.S. Constitution by impairing a contract between the union and the state.

Kaiser and the Hawaii Health Systems Corp. Maui Region were moving toward a July 1 transfer of operational control of the hospitals when the appeals court imposed the injunction in May. Kaiser and hospital officials have said that it will take at least eight weeks to complete the transfer.

A provision in the settlement also calls for the transfer to occur no earlier than Nov. 6.

In an email statement Friday, Kaiser said that it was pleased with the settlement agreement and the lifting of the injunction but expressed some concern about problems relating to a compensation package for hospital workers moving from the public to private sector. Kaiser did not provide a definitive transfer date.

“These are important steps in the right direction, but we still need the state and Hawaii Government Employees Association to resolve their issues before a transfer date can be set,” Kaiser said. “Once all issues between the state and the unions are resolved, we then have a clear path forward to establish a transfer date.”

The HGEA worker compensation package, which would give severance or early-retirement benefits to employees affected by the hospital transfer, was passed by the Legislature but vetoed by the governor over cost and possible tax issues involving the Employees’ Retirement System. The Legislature overrode the veto in a special session last month, but the ERS has since filed a suit to stop the law from being implemented, arguing that it is unconstitutional and will affect the pension fund’s tax-exempt status and retirement benefits for its 120,000 members.

HGEA said Friday afternoon that it is continuing its talks with the state and is trying to work cooperatively while making sure its members receive fair compensation as they move to Kaiser. The HGEA represents 900 white-collar employees, including nurses and supervisors.

The settlement with the UPW, which represents 536 blue-collar workers, calls for bargaining unit employees to work under Kaiser’s supervision and direction and still be covered by UPW collective-bargaining agreements until those agreements expire June 30. Kaiser will offer to hire UPW employees for a period of six months starting July 1.

Kaiser said it is aware that the delays are frustrating but said that the issues do not affect its commitment to the transition.

“We remain committed to keeping Maui Memorial Medical Center, Kula Hospital and Lanai Community Hospital operating as vital community hospitals open to all patients regardless of health care coverage,” Kaiser said.

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