Seize chance to reform public hospitals

State lawmakers have known for years that Hawaii’s public hospital system is in perilous condition, but have resisted the obvious cure: public-private partnerships that could reduce labor costs and therefore lower the bill for state taxpayers, while restoring health care services that have shrunk in recent years due to the budget woes.

Stabilizing the network of 12 public hospitals that are a primary source of care on the neighbor islands, as well as a safety net for needy and elderly patients there and on Oahu, became an issue in November’s gubernatorial election, with all three major candidates agreeing that whoever was elected should drive reform.

Fulfilling that role means bringing together lawmakers, public- and private-hospital administrators and employees, and the United Public Workers and Hawaii Government Employees Association — labor unions that represent public-hospital employees and have helped thwart previous attempts to pass legislation required to pave the way for public-private partnerships.

"It is very clear to me that any kind of public-private partnership has to be driven by the governor’s office. Trying to have legislators trying to bring parties together is really not going to work," Gov. David Ige told the Honolulu Star-Advertiser back in October, when he was running for the executive office.

Now Ige, formerly a legislator, must make good on that promise and help shepherd through a potential rescue for Hawaii Health System Corp.’s Maui Region, which includes three of the public hospitals: Maui Memorial Medical Center, Kula Hospital and Lanai Community Hospital.

HHSC Maui Region announced that it is in partnership talks with Hawaii Pacific Health, a nonprofit healthcare network anchored by Kapi‘olani Medical Center for Women & Children, Pali Momi Medical Center, Straub Clinic & Hospital and Wilcox Memorial Hospital. But it needs legislative approval to advance the partnership discussion to a formal phase, and to enable the transition to a private-sector wage and benefit structure for hospital employees.

Such approvals must come swiftly once the Legislature convenes later this month. The passage of such legislation does not guarantee that the deal will go through, but it is necessary even to complete the formal due diligence phase of the proposal.

Twice in recent years lawmakers have failed to pass laws that would have cleared the way for public-private partnerships, giving in to pressure from, in part, public-worker unions seeking to protect civil service jobs whose work rules can be ill-suited to the efficient running of a 24/7 hospital operation.

At one time, lawmakers objected because the prospective partner was a mainland company. They can’t make that claim this time: HPH’s long record of providing health care in Hawaii includes employing many staff represented by private-sector unions.

HPH envisions integrating Maui Region hospitals into its existing health care system, substantially reducing state subsidies over a 10-year period. HPH would have sole responsibility for providing health care; the state would retain ownership of the land and the facilities.

Absent such a partnership, Maui Memorial Medical Center alone will require between $573 million and $873 million in taxpayer subsidies over the next decade just to operate at current levels, according to HHSC.

Those figures don’t account for physician shortages, the fact that Maui’s population is aging, the cost of upgrading aging infrastructure or outdated technology, and other issues that could further inflate costs and impair access to treatment.

Maui Region hospitals have cut back services to save money; Maui Memorial closed its adolescent behavioral health unit last October, for example. It’s a similar story throughout the HHSC network as operating losses mount.

Simply put, the way the public hospitals are run now is not sustainable. The emergence of a high-caliber private partner — with the necessary expertise in running modern, efficient medical centers — raises hopes for a path forward that preserves access to high-quality health care and controls costs, first in the Maui Region and later elsewhere, if this model proves successful.

Ige must seize this opportunity and lead his former colleagues to overdue recognition of the private sector’s key role in improving Hawaii’s struggling public hospitals.