Hawaii Health Systems Corp. plans to cut 300 workers as early as July 1 at its 12 public hospitals statewide.
Officials of HHSC said Wednesday the cuts are necessary to offset an estimated $50 million deficit in fiscal 2016.
Lawmakers recently appropriated about $106 million in general funds for the fiscal year beginning July 1 and had given HHSC $117 million, including a $15 million emergency appropriation, to help the system break even this year.
The cuts are “extremely serious,” said Ed Chu, HHSC’s chief financial officer. “Services in many cases may be reduced or even closed because we’re having to deal with the size of this deficit. The real tipping point right now is 2016.”
HHSC is burdened with having to absorb the cost of state employee retiree health benefits and collective bargaining pay increases, which the Legislature hasn’t completely funded, he said.
Lawmakers also granted HHSC $85 million for fiscal 2017, but the hospital group projects it will still be short $90 million that year.
Maui Memorial Medical Center and two other state-owned medical facilities recently received legislative approval for privatization, clearing the way for a possible takeover by the nonprofit Hawaii Pacific Health, which already operates Kapiolani Medical Center for Women & Children, Pali Momi Medical Center, Straub Clinic & Hospital and Wilcox Memorial Hospital on Kauai.
However, the legislation requires that other Hawaii hospital operators also be allowed to compete for the opportunity to operate the facilities, which include Kula Hospital and Clinic and Lanai Community Hospital, before privatization can be completed.
The Maui County hospitals meanwhile are moving forward on a plan to cut $28 million in services and jobs starting July 1.
“The privatization won’t take place for several months at a minimum,” Chu said. “Until that happens, Maui is going to be facing the same deficits the rest of us are facing.”