The head of Molokai Community Health Center blames Molokai General Hospital for slowing a major expansion of the health center.

Molokai General, founded in 1962, and the health center, which opened in 2004, both serve the island’s 7,000 residents.

The health center stopped construction Friday on its facility at a six-acre site in Kaunakakai because the state failed to release $1 million needed to continue the project, said Desiree Puhi, the center’s executive director.

Resistance to the project by Molokai General Hospital, part of The Queen’s Health Systems, held up release of funds the Legislature appropriated in 2009, Puhi said. Molokai General is concerned that the center will compete for patients and funds, Puhi said.

"Molokai General Hospital is saying we’re duplicating services and we’re not," Puhi said.

Janice Kalanihuia, president of Molokai General, issued a written statement in response to Puhi’s charges:

"Molokai General Hospital has had discussions with Molokai Community Health Center to determine ways of collaboration to improve the delivery of health care services to the people of Molokai and ensure that there are no duplication of services to our community. These discussions have taken place over the past year and were supported by the Department of Health. MGH’s primary interest is to work with all community providers to serve as best as possible the needs of the people of Molokai."

Puhi said Kalanihuia was a member of former Gov. Linda Lingle’s Department of Health advisory committee while the health center fought for the money to be released. "It seemed to us, she (Kalanihuia) influenced the governor to not release the money. In her mind we’re competing, not complementing (hospital services)."

The Lingle administration delayed releasing the funds because of budget constraints, said Loretta Fuddy, Health Department acting director.

"The reality is the community health center and hospital do need to work together, they do need to rely on each other for services, so the partnership is critical to have," Fuddy said. "There are models on the mainland of good working relationships between community health centers and hospitals. That’s what we want to strive for."

The department is now stepping in to create a comprehensive health plan for Molokai within the next six to eight months. Gov. Neil Abercrombie’s office said he will release, likely within the month, $500,000 to restart the center’s construction.

"Once the plan is complete, we will then release the remainder of funds," said Donalyn Dela Cruz, Abercrombie’s press secretary. "It doesn’t seem that they had a comprehensive plan in place in order to move forward."

Health center officials said they wouldn’t resume construction until the state money arrives.

"We are already in the hole a couple hundred thousand dollars because we had to use operational funds to continue the construction until we hit a crisis," said Cyrus Siu, health center chief financial officer.

The center, which now operates out of three separate sites, is building a larger facility at the former Pau Hana Inn. Renovations started last July.

The center acquired the Pau Hana Inn in July 2009 for $2.75 million and has invested $1.4 million in the project so far. Center officials met yesterday with legislators at the state Capitol to lobby for support.

Center officials had planned to relocate several services, including medical, dental, behavioral health and case management, to the new facility last month. The expansion will add five exam rooms, two counseling rooms and a certified kitchen.

"We are extremely limited right now," Puhi said. "We have two physicians, a psychologist and interns all fighting for four exam rooms, so we can’t even meet the basic needs."