Hawaii Health System Corp. is closing its Kalaheo primary care clinic on Kauai’s South Shore in September.
The clinic’s lease expires at the end of May, but HHSC will continue operating there until services and patients are transferred to its Port Allen clinic, four miles away, said Scott McFarland, HHSC’s interim chief executive officer for Kauai.
The consolidation was prompted by inadequate funding from the state and by rising medical expenses. The Legislature granted the rural health care group $102 million for 2015. The organization had requested $150 million, leaving a $48 million shortfall, most of which will come from not funding collective-bargaining increases.
The group’s Kauai operation, in particular, has had a rough time staying afloat. The region is estimating an $11 million deficit for 2015. The state approved $7.3 million in emergency funding for Kauai’s public hospitals and clinics late last year and recently appropriated another $2.4 million to pay vendors this year.
"Neighbor island health care as a result of this lack of funding and financing is in jeopardy," McFarland said. "The region requires a very high level of subsidy currently. Kauai is more of a canary in the coal mine in … the fiscal health of the statewide system."
Officials of the 12-member system, which acts as a safety net for communities where medical care is lacking, have repeatedly said that HHSC can no longer sustain the increasing costs of health care and continue providing the same level of services.
"The state can’t afford to come up with more and more money, and we can’t absorb these costs," Alice Hall, HHSC’s acting president and chief executive officer, said last month after lawmakers failed to approve legislation that would have allowed the system to partner with or be purchased by a local nonprofit provider. "We’re going to have to explore all plausible ideas on how to cut expenses, which may include cutting services and reductions in force. We believe all our services are essential, but we must examine all options in order to make up for the huge deficit that we’re anticipating for next year."
The Kalaheo clinic has four physicians and 26 employees who include clerks and nurses, all of whom will be transferred to other HHSC facilities on the island, McFarland said. That includes two critical care facilities, Samuel Mahelona Memorial Hospital and Kauai Veterans Memorial Hospital, and three remaining outpatient primary care clinics. HHSC plans to open a new clinic near the Kalaheo facility in Poipu in 2015 or 2016, he said.
"We don’t feel comfortable relying on the emergency appropriation route given the uncertainty of it," McFarland said. "The Kauai region is evaluating its service lines. We’re having to face this long-term debt situation in evaluating services and how we make the region more fiscally sustainable."
