Maui hospitals’ operator is seeking partnership

The operator of three Maui Region hospitals is in "advanced discussions" to form a partnership with Hawaii Pacific Health to resolve financial shortfalls that could cripple crucial services to area hospitals.

The quasi-public Hawaii Health Systems Corp., which includes Maui Memorial Medical Center, Kula Hospital and Lanai Community Hospital, said it needs legislative approval to enter into formal talks with a potential partner.

Without such a partnership, Hawaii Health Systems said it would need to further re-evaluate staffing levels and the range of health services it provides.

"We have a responsibility to meet the health care needs of our community, but do not possess the necessary resources or freedom to grow with their needs," Wesley Lo, chief executive officer of HHSC Maui Region, said in a news release Friday. "A partnership with Hawaii Pacific Health provides a mutually beneficial solution to help reduce the financial burden to the state while addressing the long-term needs of our community."

Hawaii Pacific Health operates Kapiolani Medical Center for Women & Children, Pali Momi Medical Center, Straub Clinic & Hospital and Wilcox Memorial Hospital on Kauai.

Kaiser Permanente Hawaii, the state’s largest health maintenance organization, also has had talks with Hawaii Health Systems Maui Region and wants to explore operational alternatives.

However, Kaiser declined to submit a financial proposal, according to a Hawaii Health Systems spokes­­man.

Hawaii Health System’s Maui Region ended fiscal year 2014 with an operating loss of approximately $43.4 million with an additional estimated $46.3 million loss expected for fiscal year 2015.

For many years Maui Memorial Medical Center, the region’s largest hospital, has publicly proposed alternatives to eventually eliminate its dependence on state funds, including partnering with another health care provider to maintain and possibly expand services.

In 2012 Hawaii Health Systems began talks with Phoenix-based Banner Health on a public-private partnership. The talks ended when the participants failed to win approval for the move from the state Legislature.

Lawmakers shelved a separate measure last year that would have allowed Maui Medical Memorial Center and Kula Hospital to partner with or be purchased by a private entity.

"We believe a partnership will benefit the community as well as both organizations and its stakeholders," said Ray Vara, president and CEO of Hawaii Pacific Health. "It is vital that we work together so we can create a more stable operating environment for Maui. Most importantly our intent is to grow health services and deliver enhanced care for the people of Maui County."

In October, Maui Medical Memorial Center closed its adolescent behavioral health unit.

Without the ability to partner with another organization, Maui Medical Memorial Center will require between $573 million and $843 million in state subsidies over the next decade just to operate at current levels, Hawaii Health Systems said. Those figures don’t include issues like physician shortages and a maturing Maui community or costs for the upkeep of an aging infra­structure and necessary technologies to improve efficiencies in operations.

"We are looking for ways to do more than survive; we are looking for ways to grow with the needs of our community," Lo said. "This community deserves access to comprehensive, quality health care that evolves with their needs, close to home."