The state-owned hospitals in Maui County — led by Maui Memorial Medical Center — are moving forward on a plan to cut $28 million in services and jobs starting July 1.

Reductions will be made to nonclinical and nonessential contracts at the facilities — part of the Hawaii Health Systems Corp. The cuts include 50 to 75 administrative positions, the Maui region board announced Friday.

"The cuts to our hospitals, facilities, staffing and services we provide our communities will set us back 20 years," said Wesley Lo, chief executive officer of the Maui region.

The hospital board voted unanimously to approve the cuts this week after seeing the latest state budget projections, which would leave the region with a $28 million annual deficit.

The Maui region has 1,500 employees and an annual budget of $300 million.

"It is now time to address this issue head-on, and that involves accepting the reality of our situation," Lo said.

Services at Kula Hospital and Lanai Community Hospital are also on the chopping block, he said.

If the Legislature appropriates more money for the hospitals, the cutbacks could be avoided, Lo said.

"This is a fact of life," he said. "I wouldn’t necessarily call it posturing. If we don’t get more money or get a public-private partnership passed, this is what we’re going to have to do."

Heart, surgical and intensive care units, as well as oncology, obstetrics and gynecology services and physician call coverage are under review for downsizing. Maui Memorial is the only acute-care medical facility in the county.

Beyond the 50 to 75 administrative positions to be cut, Lo couldn’t say how many other positions would be eliminated until assessing operations.

"It’s all kinds of expenses we’ve got to cut. This is almost an impossible task to cut that kind of money without dramatically affecting services in the community and the very being of the hospital."

Lo said he has considered lining up a "bunch of airplanes" to transport Maui patients to Oahu for services. Oahu would not be able to handle the increase in business, he said.

"We are limited by the options that we have before us," Avery Chumbley, a Maui region board member, said in a press release. "We knew this day was going to happen and while we understand the state cannot continue to fund our financial shortfalls, for three years we have asked the legislature to allow us to move forward on a public/private partnership so we could avoid this very day."

The Legislature is considering House Bill 1075 to authorize "a private entity" to assume control of the three hospitals to operate them as a new nonprofit corporation.

"In order to avoid dramatic cuts in services, Maui Memorial needs a new care model, specifically the capacity to partner with a local partner," said Josh Green (D, Naa­lehu-Kai­lua-Kona), Senate Health Committee chairman, who intends to pass the measure.

"The Legislature needs to empower Maui to achieve this immediately."

In 2013 two-thirds of HHSC’s roughly dozen "safety net" facilities on Maui, Lanai and Hawaii island were exploring a deal with Phoenix-based Banner Health to acquire some of the facilities. Lawmakers did not allow the deal to proceed.

Representatives for the nonprofit Hawaii Pacific Health told lawmakers this year they are willing to partner with the state to provide health care on Maui. Hawaii Pacific Health already operates Kapiolani Medical Center for Women & Children, Pali Momi Medical Center and Straub Clinic & Hospital on Oahu, and Wilcox Memorial Hospital on Kauai.

The bill says the state would continue to provide the nonprofit with subsidies to cover its operating losses, and also says the state will help fund construction projects for the new operator for the next decade.

The Hawaii Government Employees Association, the state’s largest public employee union, has sharply criticized the bill allowing privatization of the hospitals, warning it could obligate taxpayers to pay operating losses and construction costs for a private operator for years to come.

HGEA has said it is also concerned about the future of approximately 800 union members working at Maui Memorial and about 50 more at Kula.

Public input is required to shut down services. Community meetings are being scheduled and will be announced by early summer.

HHSC said its Maui region admits more than 11,000 patients to the hospitals each year and sees over 45,000 people in the emergency room.

"Based on everything we’re hearing, there is no more money (from the state), so we have to prepare for that," Lo said. "The more I wait, the bigger impact the cuts are going to be."