The state’s public hospital system has selected Kaiser Permanente to operate and manage three Maui county hospitals.

The Hawaii Health Systems Corp.’s Maui regional system board announced Wednesday that Kaiser will continue negotiations with Gov. David Ige to assume control of HHSC’s Maui region, which include Maui Memorial Medical Center, Kula Hospital and Lanai Community Hospital.

The governor signed a long-awaited bill in June to authorize the transfer of the Maui region operations to a new entity.

Kaiser, the state’s largest health-maintenance organization, beat out Hawaii Pacific Health, parent company of Kapiolani Medical Center for Women and Children, Straub Clinic & Hospital and Wilcox Health on Kauai.

The new law authorized the Maui region to transfer its facilities to a new entity to mitigate future budget deficits that are expected to grow exponentially, threatening services and jobs. The Maui region was initially facing a $28 million deficit for the current fiscal year. Maui Memorial closed last fall its adolescent mental health services, which saved about $1 million. 

Once a definitive agreement is executed, Kaiser will become the new operator of the Maui facilities, HHSC said. The board expects to come to a definitive contract and lease agreement by year’s end, said Avery Chumbley, chairman of the Maui regional system board, which will continue to oversee the property and conditions of the lease.

“We have a responsibility to meet the healthcare needs of our community, and we believe this transition provides us the greatest path forward to continue doing this,” Wesley Lo, CEO of HHSC’s Maui region, said in a press release.

Kaiser currently has more than 243,000 members in Hawaii, including over 55,000 on Maui.

The Maui Region of HHSC serves more than 11,000 patients and sees 45,000 emergency room visits per year and employs over 1,500 people.