LIHUE — Some health care providers know their finances need to be put in order. How they get there is still up in the air. In the meantime, several providers on Kauai are left asking the Legislature for emergency funds
LIHUE — Some health care providers know their finances need to be put in order.
How they get there is still up in the air.
In the meantime, several providers on Kauai are left asking the Legislature for emergency funds to support their operations, although a recent state proposal is asking the hospitals to cut costs themselves.
“When I walked into the job in November, there was a day that the region got down to $11,000 in its operating account,” Hawaii Health Systems Corporation Interim Kauai Region CEO Scott McFarland said about the fragile state of operations on Kauai. “It has been a difficult road to recover — we are very far behind in paying our local vendors who support our care delivery and our system and we have been working with the great vendors of our community to get our invoices up to date. We are slowly but surely making progress but we were in such a deep hole that we literally had to focus toward that end.”
Changes may be coming for HHSC employees at the island’s three primary care clinics and two public hospitals as officials seek to trim millions of dollars in costs and bolster revenues.
Increasing employee meal costs, reworking job descriptions and increasing outpatient services are just a few of the changes proposed for HHSC’s Kauai operations as company officials work with legislators to prevent deeper cuts.
To help stabilize operations, state lawmakers are now considering two measures to help fund the nation’s fourth largest public hospital system and provide more oversight over HHSC’s finances.
The recommendations provided by HHSC officials make up the crux of the first measure, House Concurrent Resolution 203, which calls for the company and its five regional boards to submit “long-term, multi-biennium plans to reduce the corporation’s operating deficits,” before the start of the 2015 and 2016 legislative sessions.
The statewide public health care system operates Kauai Veterans Memorial Hospital in Waimea, Samuel Mahelona Memorial in Kapaa, and three clinics in Waimea, Port Allen and Kalaheo.
Other cost-cutting and efficiency measures outlined for the Kauai region, according to HHSC plans, include reducing purchased services; paring overtime expenses by 15 percent; and establishing a physician compensation model based on productivity, quality and performance.
The company is also considering a freeze on hiring a compliance officer and chief financial officer for the Kauai Region and sharing those roles with the HHSC corporate office, a move that could save about $390,000 a year, according to HHSC estimates.
“A large part of whether we pull the trigger, so to speak, on some of these options is contingent on the full funding of HHSC for the 2015 fiscal year as well as the emergency appropriation that we’re working through this session to make us even for 2014,” McFarland said.
This call for transparency come on the heels of a $18.2 million emergency funding request, highlighted in Senate Bill 2866, that HHSC officials say is needed to keep the public health care system afloat until the end of this fiscal year in June.
“Without an emergency appropriation, Hawaii health systems corporation’s health care operations will be severely impacted, and the impact will place the health care of residents and visitors of the state in jeopardy,” a draft version of the measure reads.
But this isn’t the first time HHSC officials have appealed to lawmakers for help.
During the Legislature’s special session several months ago, HHSC officials lobbied successfully for a measure to provide $7.3 million in emergency funds to the health care system, which has struggled to fulfill collective bargaining obligations, sustain operations on Kauai and offset the effects of federal budget cuts.
Those funds, however, were only meant to sustain HHSC operations until this spring, when company officials said they would return to the Legislature and seek additional funding.
About $11.2 million, or more than 60 percent of the funds now being requested, would help the public health care system pay for employee raises negotiated last year in the Legislature, according to testimony from HHSC officials submitted to state lawmakers.
Another $2.4 million would apply specifically to HHSC operations on Kauai and allow regional officials to pay overdue bills and “enable the region to continue to operate and provide services at current levels,” McFarland said.
The Kauai region’s total share of the emergency appropriation, including funds set aside to pay for collective bargaining raises, is $3.7 million.
If the emergency funding is not approved, half of HHSC’s 12 facilities will run out of funds to pay their employees or bills as early as April or before the end of the 2014 fiscal year, Hall wrote.
“The difficulty of operating efficiently in a rural setting and not resolving the cash shortage will affect patient care,” HHSC Acting President and Chief Executive Officer Alice Hall wrote in a March 19 letter to state lawmakers. “If Kauai Region does not pay its vendors, staff and others, the Kauai Region cannot sustain its hospital operations.”
McFarland said he is confident that operations will continue to improve on Kauai but acknowledged that company officials need the community’s support and the Legislature’s blessing to do so.
“We have a great strategic plan — we just need some time and resources to deliver against that strategic plan,” McFarland said. “My hope is that the community supports us and the public financing structure that we have and the state continues to invest in the assets here on Kauai and allow them to move forward and to a better future state that supports a care continuum that is really essential for our island.”
• Darin Moriki, staff writer, can be reached at 245-3681.
