Queen’s Health is urging partnership with Kona hospital

The Queen’s Health Systems is exploring a partnership with Kona Community Hospital to provide services in the rural community on Hawaii island.

“Currently, we are in the early stages of discussions with Kona Community Hospital and have signed a mutual non-disclosure agreement that will allow us to evaluate collaborative opportunities,” said Art Ushijima, Queen’s president and chief executive officer, in an email to the Honolulu Star-Advertiser. “We hope to be able to work together to ensure quality health care services are being delivered to Hawaii Island.”

Over the years, Ushijima said, the parent company of the Queen’s Medical Center has developed “strong clinical relationships” with Hawaii island providers.

“We understand that there is an urgent need for clinical support in this community, particularly in oncology and cardiology services and care,” he added. “This creates an opportunity for Queen’s to explore ways in which we can offer much needed clinical support for the West Hawaii and Waimea communities.”

Kona Community Hospital, a 94-bed full-service acute care facility with 24-hour emergency services, is part of the ailing public hospital system known as Hawaii Health Systems Corp., which received legislative approval this year paving the way for privatization. The West Hawaii region also includes Kohala Hospital, which opened in 1917 in the rural town of Kapaau. A spokeswoman for Kona Community Hospital referred the newspaper to the statement from Queen’s.

On Aug. 1, Kona Community Hospital began eliminating 34 staff positions as part of a contingency plan to offset a $6 million budget shortfall. In addition, the hospital announced in June that it is closing its 18-bed skilled nursing unit. The reductions are part of systemwide cuts being made by the state-owned HHSC hospitals to address a combined $50 million projected deficit for the 2016 fiscal year.

Queen’s has been expanding in recent years on Oahu and the neighbor islands. In January 2014, it acquired North Hawaii Community Hospital on the Big Island, and purchased the defunct Hawaii Medical Center in West Oahu in 2012. Molokai General Hospital joined Queen’s in 1987 after it accumulated “considerable debt” and needed the help of the larger system to rescue it from financial distress.

Meanwhile, Queen’s is in “preliminary discussions” with Kuakini Medical Center on Oahu about a potential partnership to strengthen the hospital system.

Partnerships or acquisitions of smaller hospitals by Queen’s, one of the state’s largest health care providers, would be in keeping with a recent trend of financially struggling stand-alone facilities being absorbed into larger organizations.

Three other HHSC hospitals — Maui Memorial Medical Center, Kula Hospital and Lanai Community Hospital — received bids Monday from Kaiser Permanente Hawaii and Hawaii Pacific Health to manage and operate the facilities. A decision by HHSC is anticipated before the end of September.

“Many of us predicted years ago that unless there was significant change or there was additional monies provided by the state, we would be faced with financial distress and the system would be forced to look at things like service closures and layoffs, which are occurring in other regions,” said Wesley Lo, chief executive officer of HHSC’s Maui region. “Since there hasn’t been adequate funding and there are barriers to making significant change within a state system to operate hospitals, it is inevitable that sooner or later they will look at options like partnering with other entities.”

Hawaii Pacific Health — which operates Kapiolani Medical Center for Women & Children, Pali Momi Medical Center, Straub Clinic & Hospital and Wilcox Memorial Hospital on Kauai — also confirmed earlier this year that it was exploring a purchase of all or part of Wahiawa General Hospital, but those discussions have since fallen through.

Castle Medical Center’s parent company also is considering a partnership or acquisition of three public hospitals in East Hawaii on the Big Island. California-based Adventist Health, the nation’s 10th-largest health system, is in “preliminary” talks with Hilo Medical Center, Ka‘u Hospital and Hale Ho‘ola Hamakua.

“There’s only so many resources, physicians and specialties (on the neighbor islands),” said state Sen. Josh Green (D, Kailua-Kona, Kau), an emergency doctor at Kohala Hospital. “Sharing resources with another system for longevity purposes is the name of the game over there.”