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Maui hospitals expect massive cash flow deficit

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  • GARY T. KUBOTA / 2004
    Hawaii Pacific Health is in preliminary talks to form a partnership with or possibly purchase Maui Memorial Medical Center.

KAHULUI >> Maui County hospitals in Hawaii’s state-subsidized public hospital network will have a cash-flow deficit of more than $46 million in two years if the status quo continues, administrators said. 

Decreased state funding, a decline in federal Medicare reimbursements and increased infrastructure and labor costs are pushing the hospitals into the red, The Maui News reported Tuesday. The Maui region of Hawaii Health Systems Corp. includes Maui Memorial Medical Center, Kula Hospital and Lanai Community Hospital. 

The deficit may force the hospitals to drastically cut services and jobs. They say families may have to fly to Oahu to receive care, administrators said in a statement. 

Residents testifying at a public hearing on Monday urged state legislators to pass a measure that would allow Maui Memorial to form a partnership with a private health care provider. 

Maui Mayor Alan Arakawa told lawmakers the hospital system has been underfunded for the 20 years he’s been working with it. 

"It’s alarming to know that even before a (major) storm hits, we are struggling to maintain the quality health care needed for our residents and visitors," Arakawa . 

He said people have to be realistic of what to expect from the hospitals. He said the hospitals may need to get outside help. 

"We’re either going to come up with hundreds of millions of dollars necessary to improve them or we should let someone else do it who can," he said. 

Hawaii Health Systems Corp. Board member Dr. Donna McCleary said a public-private partnership would supply the public hospitals with needed physicians, staff and expertise while stabilizing costs. 

Hospital administrators expect state subsidies to continue to decline in the coming years and have spent the last couple years evaluating other options, including possible partnerships with Arizona-based Banner Health Systems Corp. as well as local health care systems. 

The network’s Maui Region Chief Executive Officer Wes Lo said last month the region is currently considering partnerships with Hawaii Pacific Health and Kaiser Permanente. 

The region’s cash-flow deficit is expected to hit $11 million for the fiscal year ending in June. 

Hawaii Health Systems Corp. operates 12 hospitals and medical centers across the state, from Kauai to the Big Island.

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