By no later than Aug. 1, 34 positions at Kona Community Hospital will be eliminated and the hospital will shut down its 18-bed skilled nursing unit.
By no later than Aug. 1, 34 positions at Kona Community Hospital will be eliminated and the hospital will shut down its 18-bed skilled nursing unit.
Administrators at the 94-bed hospital in Kealakekua announced the cuts Monday morning as part of a plan to patch a $6 million hole in the budget for the fiscal year beginning July 1.
“It is with deep regret that we must make these decisions,” said Jay Kreuzer, West Hawaii Regional CEO of Hawaii Health Systems Corporation.
“Over the past several years, the entire hospital staff has pulled together to help address our financial challenges. Our hospital departments are running efficiently, and there is no excess or waste to be trimmed,” Kreuzer said. “Sadly, these efforts do not offset our fiscal 2016 deficit due to lack of state funding.”
Kreuzer declined to identify specific positions that will be eliminated, saying employees have not yet been informed of the decision.
The plan cuts the hospital’s losses by $3 million but still leaves a $2.5 million loss. However, only $900,000 of that is a cash flow deficit, which the hospital is able to absorb, the hospital’s chief financial officer Dean Herzog said.
The gap was created in part by increased labor costs because of collective bargaining arrangements and retiree health benefits previously covered by the state, Kreuzer said. Prior to being faced with those costs and the fact the state would not fund them, the hospital was on course to break even following a streamlining last year that cut $9 million from its operating costs, Kreuzer said.
The skilled nursing beds are not being de-licensed, and should funding be available, the service could be reopened in the future, administrators said. The unit has averaged six patients a day while the operating cost has remained fixed, said administrators who also noted those services can be obtained at other facilities throughout West Hawaii.
Skilled nursing provides care to patients who are not yet well enough to go home but are considered in need of acute care.
“Our intent is to hopefully reopen when our finances improve,” Kreuzer said. “We intend this to be temporary.”
The cuts do not affect Kohala Hospital, the second facility in the West Hawaii Region. The plan must still be ratified by the HHSC Board of Directors, and addresses only the coming fiscal year. As a longer-term solution, KCH is moving toward a public-private partnership similar to the Maui hospitals, Kreuzer said.
A public meeting to gather input on the workforce reduction and service closure plan is set for 5:30 p.m. Monday at the hospital’s administration building, conference rooms 2 and 3.
The news follows the announcement last month of plans to plug a $7 million hole in the East Hawaii Region by cutting psychiatric and home care services at Hilo Medical Center and reducing the number of long-term beds at two other facilities.
At a recent public meeting before cuts are finalized, the public asked East Hawaii administrators to come up with other ways of meeting the budget shortfall than cutting health care jobs in an already underserved community. The state’s hospital safety net system — beleaguered by low Medicaid and Medicare reimbursement rates and operating costs that outstrip income — repeatedly has been propped up by emergency appropriations in the past. The statewide system faces a $50 million shortfall for the coming fiscal year beginning July 1.
State Sen. Josh Green, D-Kona, Ka‘u, said the existing health care model can’t sustain a public safety net hospital system any longer.
“This is why we have been moving toward enabling partnerships for our hospital system,” he said. “A partnership for Kona and Hilo with a local private entity would have been preferable to any layoffs like these.”
Email Bret Yager at byager@westhawaiitoday.com.