Eugene Tiwanak

Eugene Tiwanak is on a mission. His goal is to improve health care delivery to Hawaii’s increasing number of elderly who wish to "age in place" — preferably in their own homes, but if not there, then in nursing homes or other facilities that are less costly and more comfortable than hospitals.

Part of his motivation is monetary, since government reimbursements for medical care are shifting toward reducing patient hospital stays, but also, Tiwanak said, he agrees with his mentor and former boss at St. Francis Hospital, Sister Maureen Keleher, that people heal quicker and age more "nicely" in their own surroundings.

Currently, Tiwanak is owner of Tiwanak Associates, a management consulting firm for nonprofits, and a partner in a hui with Hampton Health Ltd., of California, that has put in an undisclosed bid to acquire both HMC East in Liliha and HMC West in Ewa. The two hospitals were owned by Hawaii Medical Center but went bankrupt and were closed early this year. Before HMC, the hospitals were owned by St. Francis Healthcare System of Hawaii, which still owns the land beneath them.

Tiwanak joined St. Francis in 1973 as director of fund development, after working for Hawaiian Telephone Co. in public relations. In 1984, he left St. Francis to become managing director of Hawaii County under Mayor Dante Carpenter, where one of his unpleasant experiences, he said, was having to cut county funding for social programs, which helped him to appreciate the needs of seniors.

Tiwanak returned to St. Francis in 1987 as vice president, mainly to complete development of the St. Francis hospital in Ewa (now HMC West). He also helped form St. Francis Healthcare Foundation of Hawaii, becoming its president and chief executive, and also became president of St. Francis Residential Care Community, which recently completed developing 150 senior assisted-living rental apartments in Ewa, called Franciscan Vistas Ewa. He retired from those two St. Francis subsidiaries in 2007.

A former U.S. Army captain who served two tours in Vietnam, Tiwanak also is a former Lunalilo Home trustee and board member of a nonprofit that in the late 1960s built the 857-unit low-income Kukui Gardens apartment complex at the edge of Chinatown.

He is a product of Catholic schools — Maryknoll in Honolulu and the University of San Francisco, where he obtained a degree in psychology.

Now 70, Tiwanak is married to the former Mary Juanita Hagan, of Louisville, Ken., whom he met while at Army training at Fort Knox, and with whom he has three adult children. They are celebrating their 49th wedding anniversary this month.

QUESTION: It seems like your life has been focused on medical and elderly care services. So I started wondering: You pretty much grew up in the Catholic Church, it seems, so is this part of your religious mission in life, or just something that became an area of expertise for you?

ANSWER: It became an area of expertise. And I have to say this, if you don’t mind: I was really prompted by my first boss at St. Francis Hospital, Sister Maureen Keleher. She was a visionary. Period. She just so mentored me, and I just feel like I’m carrying on that same sort of vision she had.

Basically, she believed that patients heal quicker and get better the closer they are to their own home environments. That was her basic philosophy. That’s why St. Francis Healthcare System of Hawaii has programs on all the major islands, because of that one belief. Being one of her administrators, that’s what I learned. And I guess I believed it, and I still believe it. I don’t want to die in a hospital.

Q: Speaking of hospitals, the reason your name has been in the news lately is because you’re leading this hui that put in a bid to buy out of bankruptcy HMC East in Liliha and HMC West in Ewa, which used to be owned by the Franciscan sisters, and I was wondering how you came to be involved in this.

A: It goes back to my consulting company (Tiwanak Associates), because as a consultant, my focus was on nonprofits, in organizational management and strategic management planning. But in the process, I also was helping St. Francis in their transition, so I was still very much attuned to what was happening with their asset sale to Hawaii Medical Center, then the problems that arose thereafter.

So I was active as a consultant looking for buyers, and was approached by half-a-dozen or so different groups, including two local groups, and even the state, as to the possibility of assisting them as a consultant in putting together a program. … Then I was approached by Hampton Health and we started talking, and they were describing their intention and so forth, and I said, I liked the concept, and I could see it working.

Q: Why did you form Tiwanak Associates before you quit St. Francis?

A: I had done that because I was appointed by the state state Supreme Court to be a Lunalilo Home trustee, so as a matter of tax and IRS purposes, I had to develop a separate company for filing and so forth. I was a trustee for 13 years before I stepped down and retired.

In fact, I will share this with you, that recently it was announced that St. Francis’ Franciscan Vistas Ewa program, was completed. It’s a planned residential community on 24 acres, plus 150 senior rental apartments, and it is intended  to provide long-term care assisted services in this residential care community. … I was the president of that residential care community. And, for the most part, that was a concept that I was developing while I was a trustee for Lunalilo Home. We wanted to expand the reach of Lunalilo from a 42-bed facility and wanted to reach out. I called it “Stay healthy at home.” We were trying to provide some kind of home outreach team project that could go to care homes and provide administrative assistance, allowing care home operators to take respite, to take their vacation to the mainland or Australia or wherever, so that the care of the patient was still there. … We knew we had qualified health care professionals that could serve the care home where it’s just the owner of the house. They call it Type 1, by the way. It’s five residents or less; Type 2, like Lunalilo Home, is anything over five. The difference is, essentially, the amount of attention required and staffing and so forth. …

So when I retired (from Lunalilo Home), since I already had this company — I didn’t call it Tiwanak Associates at that time — then I retired from St. Francis, but now it gave me the opportunity to further my own vision, if you will, for long-term care. …

You know, health care is all about reimbursements and insurance. Adult residential care is that first level outside of the insurance reimbursements system. It goes from acute care to skilled nursing to nursing home, and then it drops to care homes, and at that level there is no insurance reimbursement. But that’s where most people are. So I felt that if we can make a model work so that it costs less than what it costs you in skilled nursing, this would be the future model.

Q: Have you been able to accomplish that?

A: We haven’t gone that far yet.

Q: As I understand it, you intend to turn the Liliha hospital into a geriatric care center.

A: Yes.

Q: What’s the thinking behind that?

A: It’s a couple of things. First of all, you’ve got to look at the market, in terms of the changes in the reimbursement scheme, and also in terms of how best to retool your operations, in light of competition. Competition is fierce now in the medical field. Think about it: You’ve got five major hospitals within, what, about five miles of each other — Castle, Straub, Kapiolani, Kuakini, right? And when St. Francis, and then HMC, was up, you had five of them right there.

So the model is redefining the facilities and the need for these high-tech areas within the acute-care setting, when in fact you need to minimize that hospital acute-care area and move to the next level, which may be a skilled nursing home or a geriatric center.

Q: Or even a care home.

A: Right. The government even has a program I think they’re touting, the medical home model. Remember my model about Lunalilo Home? That’s why I’m so focused on that.

Q: And you’re thinking of keeping the Ewa hospital more like a regular, full-service hospital, with an emergency room; that’s part of your model?

A: No. To be a major medical center.

Q: What does that mean?

A: Well, to be able to get all the services that are required, right there, including offices for your attending physicians. Right now you gotta come downtown.

Q: Where are people who need emergency services on the Ewa side going right now?

A: To Pali Momi (in Pearlridge). But, again, to answer your question about what are we going to do, even when we started to develop (St. Francis) West, I always said don’t forget the people in Central Oahu. You think they’re going to grab the H-2 and go all the way into town? Give me a break. That’s a long distance. … When I was at St. Francis West, I considered that (Mililani) my market. Because the freeway comes down and it cuts right toward St. Francis.

Q: Do you have a plan to restore the organ and tissue transplant units that were at the Liliha hospital?

A: Obviously we would look at that, and the reason I put it that way is because we’re not intending to come in just to replace a hospital or replace a program. Times have changed, as you well know, and so has this whole reimbursement scheme from government. So we really will have to revisit the certificate of need process and the SHPDA (State Health Planning and Development Agency), with their new statistics, to give us a better feel on what their real needs are.

Q: If your bid was accepted today, how long would it take to get the hospitals functional again?

A: Well, the SHPDA process would probably take about 90 to 120 days, for planning purposes. Then, assuming that came through, you still have facilities renovations to consider, so now you gotta go through the City and County. And in all likelihood, then you’re going to need some kind of variance to the original plan. So the variance will take you maybe three to six months. But you can’t go through the process until you get a certificate of need first (from SHPDA), so you can’t work concurrently. So again, for planning purposes, 18 months to two years. … And, you know, when you’re planning a project of this magnitude, you have to be sure your financing stays put. So you want to be sure you give them the long side of the story.

Q: Nine hundred people were let go when the two hospitals closed. How many do you think your group would be able to rehire?

A: Again, that’s going to be part of the due diligence. But also, it will be dependent on the final model that we use. And specifically, what we’ll be purchasing, if approved, will be assets only, no programs.

Q: Your hui’s bid included a promise to abide by the religious instructions of the Catholic Church. What teachings are you talking about specifically?

A: (No) abortions, physician-assisted suicide, vasectomies, sterilizations. …

Q: The hospitals were having a hard time when you were running the St. Francis hospitals. Why was that? And why was HMC still unable to make a go of it, resulting ultimately in the bankruptcy?

A: You know, I can only say that because of the complexity of it all, when St. Francis was running it, there were changes happening within the reimbursement system that really impacted the operation at the time.

One of the things that was a plus for St. Francis — because it was their mission — but on the other hand from a financial point of view, it was a negative, was the number of Medicare/Medicaid patients. St. Francis was running usually between, like, 65 to 80 percent Medicare/Medicaid, compared to other hospitals that may be running typically between 45 to 55 percent Medicare/Medicaid.

Q: As far as the cost of running a hospital to begin with, why does everything cost so much? I mean, it’s, like, 20 bucks for a plastic tube, you know?

A: (Laughter) Probably the simplest way to address the $20 tube is that embedded in that cost is the desire of people wanting hospitals to treat them 24/7. So you gotta have an emergency room that’s gotta stay open …

Q: Why do you think these two hospitals can be run profitably now? Do you have a different model?

A: Yes. And not only a different model, but I think, importantly, a different opportunity — that being simply that there’s no operation, right?

Q: You mean that you can start fresh?

A: That’s right. The purchase will be of the assets itself. There is no business that comes along with it. Therefore you can design that model that Dr. (John) Fullerton and Hampton Health is seeking to do and is working with hospitals on the mainland.