A breakdown in Maui hospital negotiations during the weekend could delay similar privatization plans for Kona Community Hospital.
A breakdown in Maui hospital negotiations during the weekend could delay similar privatization plans for Kona Community Hospital.
Three Maui public hospitals were supposed to be taken over by Kaiser Permanente after the 2015 state Legislature approved the transition as a way for the state to save money and improve patient access. Officials estimate the transfer from Hawaii Health Systems Corp. could save the state $260 million in subsidies during the next decade.
A deadlock in negotiations between Gov. David Ige’s administration and United Public Workers — negotiations that continued through the weekend as both sides struggled to make the transition happen by Nov. 6 — led Maui Health System Hospital Administrator Ray Hahn to ask for a July 1 transfer date.
Public worker union contracts expire June 30. Officials were trying to amend them so the transition could happen sooner.
The unions represent some 1,400 workers at the three Maui hospitals. Most are expected to remain employed, but they no longer will be state workers.
“We believe that the ongoing uncertainty associated with repeatedly setting and canceling potential closing dates, while not intended, is a disservice to the people of Maui and Lanai, as well as to all the clinical and administrative staff who have dedicated so much time and effort to this project on behalf of the state, MHS, the hospitals, and the communities of Maui and Lanai,” Hahn said in a letter Sunday.
The negotiation breakdown followed lawsuits from UPW and the state Employee Retirement System, which said the deal imperiled the systems tax-exempt status and the retirement benefits of 120,000 public workers. UPW officials did not respond for comment by press time Monday.
“With a new date of July 1, 2017, we will all avoid the perpetual raising and dashing of expectations as interim closing dates are repeatedly set and canceled,” Hahn added.
Kona Community Hospital hoped the Maui transition would have a year under its belt before it followed a similar path, likely with Honolulu-based Queen’s Medical Center.
“We’d been asked to wait to see how Maui does, and now we’re being asked to wait a little bit longer,” Judy Donovan, spokeswoman for the Kona hospital, said Monday. “We were a little disappointed to hear the news.”
State Sen. Josh Green, D-Kona, also was disappointed. A physician, Green has worked to get hospital deals in place as a way to improve care without draining state finances.
“By failing to launch this health-care transfer, the Ige administration has probably delayed all health care reform by at least a year at our hospitals,” Green said.
Ige’s ill-timed announcement that the state has a $1 billion surplus inspired unions to ask for more during negotiations after they were just about complete, Green said.
“Kaiser has stepped up to the plate and done everything that has been asked of them to make the transition happen professionally,” he added.
Kona Community Hospital in 2014 wrapped up an efficiency analysis by Huron Consulting Group with an eye to making itself more attractive to a public-private partnership and increase physician retention. The group identified $11.6 million in savings, including $1.7 million in non-labor, $1.2 million in labor and $543,000 in clinical cost savings.
Prior to merging with Queen’s in 2014, North Hawaii Community Hospital retained Huron to help it identify ways to be more efficient in the face of an average $4 million in annual losses.
The partnerships are designed to bring new life to the state’s safety net of public hospitals, which hemorrhage tens of millions of dollars annually and require repeated emergency appropriations to keep functioning.
“We haven’t decided on a legislative plan for Big Island yet, but the Maui experience was meant to help us decide if that is the right road to take,” Green said.
Kona Community Hospital intends to ask for the enabling legislation in January anyway, so as to be prepared when it can finally happen.
“We have to get the legislation passed,” Donovan said. “Until the Legislature says ‘yes,’ the path will be a little bumpy.”
Email Nancy Cook Lauer at ncook-lauer@westhawaiitoday.com.