The Queen’s Health Systems is finalizing an agreement to lease space from Kuakini Medical Center to alleviate a backlog of patients waiting to be placed in skilled nursing facilities.

If the agreement is finalized, Queen’s plans to invest “millions of dollars” to remodel Kuakini’s seventh floor, which has 40 beds that will be run by Queen’s medical staff, along with ancillary services including laboratory, pharmacy and supplies. The new unit will open in December.

The Queen’s Medical Center on Punchbowl Street and the Queen’s Medical Center-West Oahu are struggling to free up space in those facilities, which are nearly at full capacity, as the start of flu season begins, said Jason Chang, Queen’s chief operating officer. Kuakini Medical Center is just blocks away from Queen’s Punchbowl Street hospital.

“We’ve been running full for the last two-plus years. Right now we’re still at about 95 percent occupancy, and it’s the slow time of year,” Chang said. “We’re doing this in anticipation of winter so we don’t go through the same thing we did last year where resources were stretched very thin. We have a level of patients that don’t necessarily need all the advanced acute treatment but still need medical care.”

Wait-listed patients in a hospital need some care but not acute care. They are usually waiting for space in a long-term facility to open up. There is a lack of long-term care and other community services, such as nursing homes with higher-skilled staff to meet the needs of patients with complex conditions. Even when there is space in a facility, it might not have the specialty equipment or other the resources needed to support wait-listed patients.

There are between 45 and 65 wait-listed patients daily at the Queen’s facilities in Honolulu and West Oahu, with most in the hospital for 20 to 60 days, Chang said.

“We have a lot of patients that have a need for IV antibiotics, or maybe they’re still on a ventilator or need something that prevents them from going to a true skilled nursing facility. They can finish antibiotics at Kuakini,” Chang said. “We expect patients not to spend 60 days there. We want them to move out of the hospital into a skilled nursing facility and be able to move home. We want to be prepared and want to make sure we’re looking ahead with foresight.”

Queen’s has been expanding in recent years on Oahu and the neighbor islands. In January 2014 it acquired North Hawaii Community Hospital on Hawaii island and purchased the defunct Hawaii Medical Center-West in 2012. Molokai General Hospital joined Queen’s in 1987 after it accumulated “considerable debt” and needed the help of the larger system to rescue it from financial distress.

Kuakini spokeswoman Donda Spiker said the medical center is still working on the agreement with Queen’s and hasn’t signed a contract yet. She added that Kuakini rents space to the University of Hawaii John A. Burns School of Medicine’s Geriatric Medicine Fellowship Training Program and its Hyperbaric Treatment Center.

“It (the agreement with Queen’s) is not a partnership or joint venture, and it does not involve any purchase, merger or acquisition,” Spiker said. “We’re renting out an available area that we have. The details haven’t been worked out.”

When asked about previous talks between Queen’s and Kuakini regarding a possible acquisition or partnership, Chang said, “That conversation has died entirely. This is a totally different direction. I don’t think either parties were that interested.”