Privatization of Maui hospitals still in limbo

The historic privatization of three Maui County hospitals is in jeopardy, following another setback Friday when the state was unable to reach a settlement over benefits for unionized workers.

A court had asked Gov. David Ige and the United Public Workers to resolve by Friday disputes over benefits for displaced workers affected by the proposed privatization of Maui Memorial Medical Center, Kula Hospital &Clinic and Lanai Community Hospital. Instead the two sides asked the 9th Circuit Court of Appeals for an extension and were given until Aug. 18.

“These negotiations are complex and involve many moving parts. For example, any settlement will impact groups that are not parties to the lawsuit, such as Maui Health System and HGEA, and will have to account for the implementation of the separation benefits bill,” said Joshua Wisch, a spokesman for the attorney general’s office. “To get this done right, the state has an obligation to make sure that all of these factors, and more, are properly addressed.”

Lawmakers last year authorized the privatization of the Maui County hospitals. The state selected Kaiser Permanente Hawaii to be the new operator of the struggling facilities. The hospital deal would be the largest privatization of public facilities in Hawaii history, with the state saving an estimated $260 million in hospital subsidies over the next decade.

UPW, in an attempt to stop the transition of the hospitals to Kaiser, is suing the state for allegedly violating collective bargaining agreements that extend until June 30. The 9th Circuit Court of Appeals in May issued an injunction that temporarily stopped privatization efforts. Kaiser was scheduled to take control of the hospitals July 1.

The union represents about 500, or a third, of the 1,500 workers at the facilities.

The delays in executing the transfer of the hospitals to Kaiser will soon put patient care at risk, said Wesley Lo, CEO of the Maui County hospitals.

“There’s a lot of people wondering if there really is going to be a settlement,” he said. “Right now we had been targeting if things got resolved by Aug. 1 that we’d have a closing date of Oct. 1. Now we don’t have a new date.”

The board of the hospitals is meeting this week to discuss contingency plans that include service closures, he said.

“We can’t keep operating in this uncertainty,” Lo said. “Every day there’s people leaving. We’re having to rely on travelers and temporary workers to fill positions now. We can’t recruit physicians, and it’s hard to even recruit employees now because we don’t even know when this is going to be resolved, if at all.”

The hospitals already have more than 300 staff vacancies and employ more than 100 traveling nurses, he added.

“We are very disappointed that the state and union have not yet been able to resolve this issue,” said Kaiser spokeswoman Laura Lott. “We understand and share the frustration felt by the community and regret that these delays have been challenging and stressful for staff and patients. We want to assure the people of Maui and Lanai that we are firmly committed to investing in the people, services, facilities and technology to provide excellent care and keep the hospitals open for all residents and visitors, regardless of insurance. We hope that the state and the union can come together and resolve this case soon, as we have much work to continue and it will take a minimum of eight weeks to complete the transition and assume management of the facilities.”

UPW State Director Dayton Nakanelua didn’t return a call for comment.

“The transition is going to be further delayed, and it’s getting harder and harder to operate in this kind of uncertainty,” Lo said. “We’ve got to act appropriately for the community. We don’t want to deliver bad care.”