Private help for public hospitals

The Legislature, grappling with one of its lower-profile issues of the special session, last week approved a $7.3 million bailout of a sort for Kauai’s public hospitals, money needed to cover an immediate shortfall. This was a last-ditch effort to keep services running in the two state-run facilities on that island, Samuel Mahelona Memorial Hospital and the Kauai Veterans Memorial Hospital.

Undeniably, there was insufficient time to craft a better solution in a brief emergency session, but that’s got to move up the list of priorities for the regular Legislature once it convenes in January.

The difficulty faced by public facilities under the umbrella of the Hawaii Health Systems Corp. is partly one that’s inherent to rural hospitals. Costs are high and the needs are great, but the population base is too small to support a health system that is not carefully limited. The problem seemed most acute on Kauai but other islands face the same challenge.

There was hope in a privatization plan that had been in negotiations with Banner Health, an Arizona-based nonprofit that runs more than 20 hospitals in several states. There are reports that the company, which had concerns about the Hawaii system’s unionized labor costs, is still interested in acquisitions, said state Sen. Josh Green, the Senate’s health chairman.

That option should be pursued. There ought to be reasonable opportunity for concessions that preserve the hospitals’ workforce at a fair wage; Green pointed out that retaining trained professionals in neighbor island positions will require decent pay incentives, and he’s right about that.

Additionally, there are other problems of sustainability that may be best resolved in the private sector, where there is more capital to invest in needed upgrades. For example, the census at Kauai’s long-term care facility, part of the Mahelona complex, was lower than anticipated, which contributed to the revenue deficit. The aging, ward-like appearance of the facility does not appeal to many Kauai families seeking accommodations for an elder, officials said.

Although many families opt instead for home-based or community care, presumably there is a need for some institutional care beds on the island. Mahelona will need to reshape its long-term care program in a way that better meets the demand.

HHSC officials testified at hearings that the Kauai problem was especially acute. The original legislation, House Bill 3, sought $2.5 million in an emergency grant; however, officials said $7.3 million was needed to get them through the end of March 2014.

The corporation has floated its own ideas for solutions, such as improvements to billing that can boost the revenue stream and possible alignments with Hawaii Pacific Health, which runs the private Wilcox Memorial Hospital, to avoid duplication of clinic services.

Green said there also should be discussions of ways to support outpatient treatment over the more-costly hospital admissions, including incentives for private physicians serving the poorer patients in the more remote areas.

In sum, it’s hard to imagine a solution that doesn’t involve private partnerships at some level. And it’s clear that time is running out to come up with a plan, or the state-run corporation will be back at the Capitol on a continuing basis, seeking ever more money to cover its bills.

The urgency of the problem should be obvious to all lawmakers upon their return in January, so much so that it would be wise for the brainstorming to continue in the intervening few weeks as well.

Many parts of the country have remote areas where providing a health safety net is economically challenging. It’s all the more critical in Hawaii, where the lack of services could put care out of reach for patients who can’t afford the travel to Oahu.

That safety net needs to be in place, but taxpayers must insist that officials find a way — to borrow a pertinent health-care phrase — to stop the budgetary bleeding.