Authorize Maui hospital plan

There comes a point when the diagnostic testing has to end and the treatment must begin. Maui County has reached that point with its financially ailing public hospitals, the only critical-care facilities Maui residents have, and it’s time to transition to a new business plan involving a private nonprofit corporation.

This means state legislators should reject proposals that the state first conduct an audit of the Hawaii Health Systems Corp. Instead, House Bill 1075, which enables such a public-private partnership, should be passed.

Hawaii Pacific Health, operators of major private hospitals, has been in talks with the governing authority of Maui Memorial Hospital on a deal that would keep the property in state hands but would privatize its operation. Under the umbrella of the Maui region and its board are also Kula Hospital and Lanai Community Hospital.

HB 1075 — which now has passed the Senate Health and Commerce and Consumer Protection committees, chaired respectively by Sens. Josh Green and Rosalyn Baker — does not specifically name HPH as the partner.

Instead, it authorizes the Maui board to lease facilities under its control for "operation by a new private nonprofit corporation." Plainly, lawmakers are viewing this as a kind of pilot program for such partnerships as a means to make other state-run hospitals more sustainable fiscally.

The measure moves on to a joint hearing by the Judiciary and Labor, and Ways and Means committees and, according to the report signed by Baker and Green, the next panels to weigh the bill are urged "to review any monetary or labor agreement matters that may need to be further clarified."

That is essential, because the state has to take care it doesn’t create an excessively generous "sweetheart deal," a concern voiced by some critics of the plan. For example, the state may want to harden up the conditions for terminating the fixed long-term lease of at least 25 years, beyond the current requirement of a one-year notice, especially considering that the lessee will be paying a dollar-per-year nominal lease rent.

For the first 10 years of the lease, the state will be fronting some of the money for capital improvements: That’s another juncture where negotiating the best deal possible for the public is critical.

There does appear to be sufficient oversight of a final lease agreement, which will be subject to review by the director of finance and the attorney general, and be signed by the governor and the Maui board.

This is all an emotional issue for the people of Maui, and some of them went to the trouble and expense of attending the recent hearing on Oahu. Baker in particular drew fire from the most outspoken critic of the privatization plan, Randy Perreira, executive director of the Hawaii Government Employees Association, for "bullying" and "lack of decorum" during the hearing.

One bill opponent from United Public Workers was urging more time for collaborative talks; Baker interrupted at one point, and at the end, asserted that she had "no faith" the unions would come to the table.

For his part, while another testifier objected to the senators talking among themselves, Green called a recess and then informed the man icily that the senators will confer as needed.

The senators apparently need a reminder that this was a forum for the public to have its say, and that testifiers expect to be heard with common courtesy.

However, this particular tempest in a teapot should not serve as a distraction from the primary issue: Maui’s hospital services are deeply in the red and need a rescue plan. The Maui board last week ordered a $28 million cut in services and positions for the next fiscal year, in the face of continuing deficits.

Maui County residents simply cannot afford to lose their primary care facilities, and the status quo is leading them precisely toward that end. The crisis has been studied at length, most recently in the 2009 Stroudwater Associates report that recommends the state take exactly the direction HB 1075 lays out.

Lawmakers, in concert with the Maui hospital management, have crafted the basic framework of a solution, and it’s time to nail down the details and put the hospitals back on firmer ground.