Gov. David Ige cleared the way Wednesday for the privatization of Maui Memorial Medical Center and two other state-owned medical facilities by signing a bill authorizing the transition. The governor said he hopes to finalize an agreement by the end of this year with a new nonprofit private operator.

Act 104 signed by Ige requires that Hawaii hospital operators be allowed to compete for the opportunity to run the Maui and Lanai medical facilities, but the Maui region of Hawaii Health Systems Corp. already has been exchanging information with Hawai‘i Pacific Health for more than six months to prepare for a possible takeover.

The Maui region of HHSC currently operates Maui Memorial, Kula Hospital and Clinic and Lanai Community Hospital, which are all covered by the new law.

The Maui region of the state hospital network cares for more than 11,000 inpatients and 45,000 people in the emergency room each year. The regional facilities have more than 1,500 employees.

Hawai‘i Pacific Health is a nonprofit that already operates Kapiolani Medical Center for Women and Children, Pali Momi Medical Center, Straub Clinic and Hospital and Wilcox Memorial Hospital on Kauai.

The new law assigns Ige with the task of leading negotiations for the transition to a public-private partnership with the assistance of Maui hospital officials.

In a signing ceremony at Maui Memorial Wednesday morning, Ige said the most important goal of the privatization effort is to ensure that Maui community members “can continue to get quality health care services that they need and deserve right here in the communities that we serve.”

The state now pays about $100 million per year to support the hospital network operated by Hawaii Health Systems Corp., including the Maui facilities, and lawmakers have been searching for years for a way to reduce those costs.

Privatizing portions of the system is seen as one potential way to save money by reducing the amount of state subsidies that are required.

The privatization effort has been strongly supported by the Maui region of HHSC and others in the community, including Maui Mayor Alan Arakawa.

Arakawa said at the signing ceremony that the privatization issue has generated hard feelings, “and this was not an easy journey.”

“I could not imagine Maui without a really good hospital and health care service, and that’s the direction that we are going,” Arakawa said. He predicted that 25 years to 100 years from now, “people will look back at this time and they will see that this is where we made a dramatic change in the direction that we needed to go. We really stepped aside, were able to put our differences aside, and work toward the community.”

The new law was strongly opposed by the United Public Workers union and the Hawaii Government Employees Association, which both have members working at the hospital facilities. HGEA has about 800 union members among the Maui Memorial employees, and another 50 at the Kula facility.

House Speaker Joe Souki said Wednesday lawmakers were under “extreme pressure” to vote against the bill.

“You’re talking about a bill that’s only going to be affecting Maui, not the other jurisdictions in the state, so they have no reason to vote for the bill, especially because (of) the pressure that was upon them,” he said of his fellow lawmakers.

Souki praised the House and Senate leadership for rounding up enough votes to pass the bill “under this very stressful situation.”

The new law guarantees there will be no employee layoffs for six months after any takeover, a concession that was sought by the unions.

Randy Perreira, executive director of HGEA, has predicted that the transition to a privately run facility will turn out to be far more expensive than lawmakers expect.

The union cites state Department of Budget and Finance estimates that when the Maui hospital employees are moved into private-sector jobs, those workers will be owed an estimated $114 million that the state must pay to cash out their accrued leave benefits and compensatory time.

The hospital workers also will be owed hundreds of millions of dollars more in pension and retirement medical costs, and the entire package could cost the state $320 million, Perreira has said.

Ige said he will work with Maui health care officials to plan for a transition to a private operator in 2016.