Maui hospital plan a ‘blueprint’ for Big Isle, Ige says

Even as Gov. David Ige’s administration struggles to carry out plans to privatize three state-owned Maui hospitals, Ige says he anticipates “similar arrangements” will be put in place to establish public-private partnerships at the Hilo Medical Center and the Kona Community Hospital on the Big Island.

Ige said in an interview there are no immediate plans in the works to privatize the publicly run Hilo and Kona hospitals, but said the state’s efforts on Maui offer a “blueprint for how to proceed forward on other deals.”

State law already authorizes public-private partnerships to allow private operators to run the hospitals, Ige said, although state lawmakers would need to pass specific enabling legislation for any hospital or region that wants to pursue privatization.

For the moment, “we need to focus on making sure that this transaction with the Maui region is successful,” Ige said. The Maui hospitals are to be transferred to Kaiser Permanente by Nov. 6.

“I’m optimistic that we’ll be able to successfully transfer the operations and management for the Maui regions, and then we’ll look at other regions,” he said.

Lawmakers last year authorized privatization of Maui Memorial Medical Center, Kula Hospital & Clinic, and Lanai Community Hospital, and the state reached an agreement in January to have Kaiser operate all three.

The Maui effort would be the largest privatization of public facilities in state history, and Ige has predicted it will save the state $260 million in hospital subsidies over the next decade.

The privatization effort has been fought by the state’s public worker unions, which represent about 1,400 employees at the Maui hospitals. Most of the hospital staffers are expected to continue working at the hospitals for Kaiser, but they will no longer be state workers.

Last week Ige announced a settlement to resolve a class-action grievance and a lawsuit by the United Public Workers union that stalled the transfer of management of the three Maui hospitals to Kaiser Permanente, and Ige said he was in discussions Monday to try to resolve the concerns of the Hawaii Governmental Employees Association with the Maui transfer.

The 276-bed Hilo Medical Center has 1,200 employees and has the second-busiest emergency room in the state, serving nearly 48,000 patients a year. It also operates a network of nine outpatient clinics offering primary and specialty care.

The smaller Kona Community Hospital is a 94-bed, full-service acute care hospital. It admits 3,500 patients and handles nearly 22,000 emergency department visits a year. It has 440 employees, most of whom are unionized.

Ige emphasized that any new privatization effort would require strong community involvement, and said he generally discussed the possibility of privatization with both the East Hawaii and West Hawaii regional boards of the Hawaii Health Systems Corp. Both “have expressed interest in considering partnerships,” he said.

Ige said he has not discussed the matter with any private operators who are interested in managing those facilities, but “to the extent that there are private partners that would be interested, I think that we definitely want to explore that.”

“It’s very difficult for the state to manage health care facilities in this day and age,” Ige said. “There are so many changes that are being driven by the Affordable Care Act. There are so many changes that are being driven just by changes in health care in general, and it has been difficult for the state to manage these facilities.”

A spokeswoman for the West Hawaii Region leadership and board issued a statement Monday saying they “believe that an eventual partnership is the best solution to ongoing budgetary challenges and funding shortfalls,” adding, “This option would create an opportunity to positively effect the changes needed to focus on improving access, quality and coordination of care to our West Hawaii community.”

The West Hawaii board is not currently in discussions with a private operator, but “we would welcome enabling legislation that would make looking at partnerships one of our options,” according to the statement.

A spokeswoman for Hilo Medical said the East Hawaii network has been in discussions with Adventist Health, which operates Castle Medical Center on Oahu, but said there are “no new developments” in those discussions.

“In East Hawaii, we continue to believe that we need choice when it comes to determining the best means for delivering health care to our community,” said a statement from Hilo Medical.