The parent company of the Queen’s Medical Center has finalized a deal with St. Francis Healthcare System of Hawaii to acquire and reopen by fall 2013 the shuttered Hawaii Medical Center in West Oahu.
"We recognize the vital need to reopen the Ewa hospital with an emergency department for West Oahu residents and our agreement represents a major step forward in that direction," Jerry Correa, St. Francis president and chief executive officer, said in a statement.
Queen’s Health Systems will purchase and renovate the HMC-West campus in Ewa for $73.2 million and plans to rebuild the hospital into a top-tier facility. The deal marks the first major acquisition for Queen’s in more than two decades and substantially increases its presence in the islands. It purchased Molokai General Hospital in 1987.
"Over the coming months, Queen’s will be committed to creating a campus that the people of West Oahu can be proud of," Queen’s President Art Ushijima said in a statement. "Our goal is to build an active and vibrant Queen’s presence in West Oahu to serve this large and growing community."
HMC-West and its emergency room closed in December, leaving residents of West Oahu with Pali Momi Medical Center in Aiea as the closest acute-care facility. Without the West Oahu emergency room, ambulances have been forced to drive farther, and the island’s remaining emergency departments have been overloaded with patients.
"It’s going to take a lot of work," said Queen’s spokesman Cedric Yamanaka. "Right now it’s so hard to forecast exactly what spending’s going to be. We have a lot of good people here. They’re going to give it their best shot."
Meanwhile, St. Francis said it has no plans to sell the closed HMC-East campus in Liliha and will turn it into a long-term care and rehabilitation facility. St. Francis didn’t disclose a time frame.
"We will be developing the Liliha site to provide care for those who are discharged from the hospital," said St. Francis spokesman Nathan Hokama. Those services include skilled nursing and assisted living. "The biggest difference now is it’s not being operated as a hospital. It will be turned into post-acute care, which is a totally different category in the spectrum of care."
St. Francis said it is continually seeking partnerships and collaborations but is not currently in discussions with other medical operators.
For decades the hospitals in Ewa and Liliha struggled to be financially viable in an environment of declining government reimbursements and soaring medical costs. The facilities began shutting down in December after a lengthy and contentious bankruptcy resulting from a high population of uninsured and underinsured patients.
Queen’s estimated in its regulatory filing that it would provide $50 million annually in charity care.
Queen’s will pay $21.2 million for the land and building and earmarked $25 million for hospital renovations that will include an expansion and modernization of emergency, surgical and imaging services. It will invest another $27 million for equipment and plans to hire about 400 employees. The closing date of the sale is slated for October.
St. Francis sold the hospitals in January 2007 for $68 million to HMC LLC, then a for-profit joint venture between Hawaii Physician Group LLC, comprising 130 local doctors, and Kansas-based Cardiovascular Hospitals of America.
HMC first filed for Chapter 11 bankruptcy protection in August 2008. It emerged in August 2010 and became a nonprofit organization before filing its second bankruptcy in June 2011. HMC began closing the hospitals in December, laying off nearly 1,000 workers and displacing some of the state’s most vulnerable long-term care patients.
The Queen’s Health Systems, a nonprofit organization established in 1985, employs about 3,700 workers and generates net revenue of roughly $516 million through the Queen’s Medical Center, Molokai General Hospital, Queen Emma Land Co. and other entities.