The state hospital system has been losing tens of millions of taxpayer dollars each year, and frustrated state lawmakers Tuesday moved a step closer to authorizing a partnership between the state-owned Maui Memorial Medical Center and a private health care provider to try to finally curb those losses.
But the leader of the largest public employee union in Hawaii sharply criticized the bill allowing privatization of Maui Memorial, Kula and Lanai Community hospitals, warning it could obligate taxpayers to pay operating losses and construction costs for a private operator for years to come.
"Realistically, I think this is a bum deal for taxpayers, and further I would question the manner in which we have gotten to this point," said Randy Perreira, executive director of the Hawaii Government Employees Association.
"It appears that this bill is really designed to benefit one local organization, and while we don’t have any quarrels with Hawaii Pacific Health, the terms of the bill are just far too generous as far as taxpayers are concerned."
House Bill 1075 was approved by the House Finance Committee on Tuesday to authorize "a private entity" to assume control of the three hospitals to operate them as a new nonprofit corporation.
Representatives for the nonprofit Hawaii Pacific Health have told lawmakers they are willing to partner with the state to provide health care on Maui. Hawaii Pacific Health already operates Kapiolani Medical Center for Women & Children, Pali Momi Medical Center and Straub Clinic & Hospital on Oahu, and Wilcox Memorial Hospital on Kauai.
The bill says the state will continue to provide the nonprofit with up to $32 million per year to cover its operating losses at Maui Memorial, and also says the state will help fund construction projects for the new operator for the next decade, said House Finance Chairwoman Sylvia Luke (D, Punchbowl-Pauoa-Nuuanu).
However, the state attorney general’s office is warning that those portions of the bill promising future subsidies are legally unenforceable and is recommending they be deleted.
Lawmakers don’t know yet what other terms might be included in an agreement between the state hospitals and Hawaii Pacific Health because the specific details haven’t been worked out yet.
Luke said members of the Finance Committee had concerns about the bill but voted for it anyway because "a lot of legislators are at a point where they’re just willing to try it."
Lawmakers have serious questions about the financial stability and management of the hospitals, she said.
The network of state hospitals, which includes facilities on Maui and Hawaii island, normally asks the Legislature for about $100 million a year to cover its losses and subsidize its operations, of which about $30 million goes to Maui Memorial.
Luke said this year the hospital system asked lawmakers to double that amount to $200 million.
"I think there’s a lot of frustration among legislators and the administration on how we’re going to be able to sustain the hospital system without having major services cut," Luke said. "When we talk about services, we are talking about the core functions and how do we make this work. The hospital system is the safety net in the community."
Perreira said he is also concerned about the future of the hospital employees. HGEA has about 800 union members working at Maui Memorial and about 50 more at Kula.
"We’re their advocates, and the fact that so far there has been no promise of any job security beyond six months is very troubling," Perreira said. "These are some of the best-paying jobs that one could find certainly on Maui, and it concerns us that we’re not able to get more assurances" that those jobs would be protected.
HGEA has about 43,000 union members statewide.
