Wahiawa General purchase canceled

Hawaii Pacific Health is no longer considering an acquisition of Wahiawa General Hospital.

"It just didn’t fit within their strategies at this point," said Don Olden, chief executive officer of Wahiawa General Hospital, adding that he was informed last month about HPH’s decision not to pursue an affiliation. "We will start looking again, but I don’t have a time frame right now. We’ve just got to explore all options at this point."

Wahiawa General was exclusively negotiating with HPH since January to purchase all or part of the financially struggling hospital, Olden said.

HPH — which operates Kapiolani Medical Center for Women & Children, Pali Momi Medical Center, Straub Clinic & Hospital and Wilcox Memorial Hospital on Kauai — earlier this year signed a nondisclosure agreement that gave it access to the financial records of the 160-bed facility.

Olden informed employees that a potential deal fell through with HPH.

However, HPH said in a statement that it is continuing discussions with the Wahiawa hospital to "explore ways that HPH can best support Wahiawa in its mission to serve the rural communities of Central Oahu and the North Shore."

"No final decisions have been reached between Wahiawa and HPH regarding the nature of that relationship and support," HPH spokes­woman Kristen Bonilla said.

Wahiawa General is the only acute-care hospital serving Central Oahu and the North Shore between Kahuku Medical Center and Pali Momi Medical Center.

Over the past year, Wahiawa General was forced to restructure its Family Medicine Residency Program, cancel its Home Health and Physical Therapy outpatient programs and reduce staffing.

An affiliation would have given the hospital a cash infusion, and the hope was it would result in a more efficient operation. A deal also would include 28 acres to expand Wahiawa General at the site of the proposed Koa Ridge residential development project. Castle & Cooke set aside the land years ago for a replacement of the aging Wahiawa General.

"For the future development of Wahiawa and Koa Ridge, we’ve got to find a partner to work with," Olden said. "It’s one of those things strategy-wise, for the long term, an affiliation needs to occur."

Olden said that with the advent of Affordable Care Act, or Obama­care, hospitals are looking for different business models.

Olden has maintained that small stand-alone facilities are unsustainable in the existing health care environment and that a sale or affiliation is necessary for the Wahiawa facility to survive. He said an alternative would be to try to become part of the state-owned Hawaii Health Systems Corp., which is barely staying afloat with millions of dollars in taxpayer subsidies.

The news comes as Hawaii Pacific Health is aggressively seeking to expand its presence in the islands. The organization is also in negotiations to rescue three Maui hospitals that are part of the troubled HHSC. Gov. David Ige recently signed a bill that authorizes a private entity to potentially assume control of Maui Memorial Medical Center and Kula and Lanai community hospitals.