Nearly 90 Hawaii island workers will lose their jobs as a result of planned closures and cutbacks at Hilo Medical Center, Ka’u Hospital and Hale Ho’ola Hamakua to offset a projected $7 million deficit in the fiscal year starting July 1.

The East Hawaii region of the Hawaii health Systems Corp., the troubled public hospital system that is facing a $50 million shortfall for fiscal 2016, announced the cuts late Tuesday night.

Planned closures include one wing of adult inpatient psychiatric care at Hilo Medical Center and home care services, which provides homebound individuals chronic and transitional nursing care, HHSC said. The cutbacks also will reduce the number of long term care beds available at Hilo Medical Center, Ka‘u Hospital and Hale Ho‘ola Hamakua. The reductions do not affect the Yukio Okutsu State Veterans Home.

Additional cuts will be necessary in many departments and a total of 87 people — or approximately 7 percent of the total workforce — will lose their jobs, the company said.

“Some healthcare services for our communities will be reduced and disrupted as a result of the planned closures, cutbacks and staff layoffs,” said Dan Brinkman, interim East Hawaii regional chief executive officer, in a news release. “While the vast majority of our workers will keep their jobs, it saddens us that very capable people who help care for our community will lose their jobs.”

The region’s estimated shortfall is the result of higher costs and lower reimbursement rates for the "safety net" facilities that serve a rapidly-growing population of more than 100,000 people, many of whom are uninsured, in the rural community, the company said. 

Approximately 75 percent of the region’s reimbursements, which do not cover the cost of care, come from the government-funded Medicare and Medicaid programs for seniors and low-income residents. 

“Our budget shortfall will have considerable impact on healthcare facilities in East Hawaii. Region-wide cost cutting measures have already been implemented and service cutbacks and layoffs are the only remaining option for our financial viability,” said Gary Yoshiyama, HHSC’s East Hawaii regional board chairman, in the release. “Many scenarios were carefully weighed in our preparations to maintain essential healthcare services and minimize any potential harm to patients.” 

HHSC announced plans last month to cut 300 workers at its 12 public hospitals statewide to offset an estimated $50 million deficit in fiscal 2016.

Lawmakers appropriated about $106 million in general funds for the fiscal year beginning July 1. HHSC said it needed $156 million to cover costs. The Legislature also granted HHSC $85 million for fiscal 2017, but the hospital group projects it will still be short $90 million that year.

Meanwhile, lawmakers approved the privatization of Maui Memorial Medical Center and two other state-owned medical facilities — Kula Hospital and Clinic and Lanai Community Hospital —clearing the way for a possible takeover by the nonprofit Hawaii Pacific Health or Kaiser Permanente Hawaii.

The Maui County hospitals meanwhile are moving forward on a plan to cut $28 million from their budgets starting July 1.

The East Hawaii Region operates on a budget of $160 million and has a current payroll of more than $100 million and is Hawaii Island’s second largest employer.