Maui Memorial in talks to partner with Banner Health

Maui Memorial Medical Center is seeking to break free from the Hawaii Health Systems Corp., the state’s 12-hospital public health system.

The Wailuku-based hospital said Tuesday it has begun talks with Phoenix-based Banner Health to form a public-private partnership that would improve the quality and delivery of health care services on Maui.

Clay Sutherland, chairman of Hawaii Health Systems, described the talks with Banner as “very preliminary.”

“We need to explore different alternatives to see how we can provide the best possible health care for our community given our current constraints,” said Wesley Lo, Maui regional CEO of Hawaii Health Systems. “It’s crazy out there with declining reimbursements and the changing health care landscape.”

State legislation created in 2007 allowed Maui Memorial to have some level of autonomy in operations, and in 2009 to explore public-private partnerships including leasing facilities or entering into operating agreements with other organizations.

Maui Memorial has 1,400 employees and is licensed for 213 acute-care beds that service patients needing short-term medical treatment.

“It’s yet to be seen if we stay with HHSC,” Lo said. “It could be we’re part of HHSC; it could be we transition out of HHSC. We’re a state entity. We’re not allowed to sell the assets.”

In Maui County, Hawaii Health Systems operates Maui Memorial as well as Kula Hospital & Clinic and the Lanai Community Hospital.

“As we continue to move forward with ongoing projects and initiatives at (Maui Memorial), our goals remain the same — to provide high-quality acute care service on Maui,” Lo said. “And that’s why we are excited about the possibility of partnering with a quality organization like Banner Health.”

Recent improvements at Maui Memorial include a new Heart Program that provides cardiovascular care and treatment on Maui, the addition of the 75,000-square-foot Representative Bob Nakasone Kahului Tower, a new helipad and an expanded emergency department.

“Despite our successes, we realized that there are numerous challenges facing rural community hospitals on the neighbor islands, including capital shortfalls, budgetary restrictions, declining government and third-party payer subsidies, and a lack of scale that affects operations and the inability to keep up with health care reform,” Lo said.

He said with declining reimbursements and capital needs that Maui Memorial needs to become more efficient.

“We need to explore other options other than just being a state entity,” he said. “We’re looking for a more efficient way to deliver the best quality of care we can to the community.”

Banner Health, which operates 23 acute-care hospitals and health care facilities in seven states, was recognized earlier this year as one of the top five large health systems by Thomson Reuters.

Maui Memorial, the only full-service acute care hospital on Maui, was founded more than 125 years ago and services all of Maui County, including Lanai and Molokai. It is the only hospital outside of Oahu that provides a full range of cardiac services.