LIHUE — Officials from the state’s public health care provider say they are working to develop financial plans to stabilize operations on Kauai and reverse the region’s cash-strapped path.
What that could mean, however, are cuts or consolidations in services and medical staff, Hawaii Health Systems Corporation officials from Kauai acknowledged to state lawmakers.
“At the end of the day, if we’re going to survive and the funding is not going to be coming forward, it is going to mean we’re potentially looking at service lines and a reduction in force,” HHSC Kauai Regional Board Chair Wade Lord said Wednesday at the State Capitol in Honolulu. “We’re in the middle right now of reviewing each service line and the net financial effect of those lines — how they affect other related services. It’s our hope that we can avoid doing that, but it’s a part of the process and we need to work through it.”
The news was delivered during the first of at least four statewide public meetings, hosted by the state House Committee on Health, that seeks to address the operational and financial stability and future of the nation’s fourth-largest public health care system.
A similar meeting on Kauai is scheduled at 5 p.m. Monday at the War Memorial Convention Hall in Lihue.
“We had a very busy two sessions this biennium where we struggled and wrestled with the question on what to do with the HHSC system,” said Rep. Della Au Belatti, D, Makiki-Manoa, who chairs the House Committee on Health. “We’re taking this time during the interim … to look at this question about HHSC operational plans, budgets and the shortfall that the system and the regions are facing and have a community conversation about what a private-public partnership may look like as we move forward.”
It is a sometimes difficult conversation.
“A lot of attention gets paid to Kauai because we do rely so much on emergency appropriation,” Interim HHSC Kauai Region CEO Scott McFarland said. “We do realize, in the Kauai region, that we do need to become more sustainable with an acceptable level of state support, so this strategic plan should help us down that path.”
In all, McFarland said the public health system received about $16.6 million in state subsidies during the last year alone for regional operations on Kauai, including about $9.7 million in emergency appropriations and about $6.9 million in additional money from the state’s general fund.
The HHSC Kauai region, however, is still facing an $11 million shortfall for the upcoming 2014-2015 fiscal year, which begins July 1 — a fraction of the $48 million shortfall affecting the entire statewide corporation.
One option still being considered by HHSC officials on Kauai is closing the region’s Kalaheo Clinic once the building’s lease ends in September and consolidating services provided there with another clinic in Port Allen.
“The utilization of that clinic went from well over 100 down to, on average, below 20 a day and that isn’t getting better, and it hasn’t gotten better for a long time,” Lord said. “So, people want to see it there but they’re not supporting it with their purses.”
But some patients, including Rep. Dee Morikawa, D, Koloa-Niihau, say they oppose this move.
“It’s very hard for me to justify these emergency appropriations when I don’t see any efficiencies myself on the ground,” Morikawa said.
Though the HHSC regional board on Kauai is looking at streamlining operations, McFarland said neither of the island’s two public hospitals — Samuel Mahelona Memorial Hospital in Kapaa or Kauai Veterans Memorial Hospital in Waimea — is risking closure during the 2014-2015 fiscal year.
A majority of the Kauai region’s expenses, Lord said, are tied to labor costs. As of last November, HHSC employed about 475 people on Kauai, McFarland said.
Kauai regional officials, Lord said, are attempting to work with employees and union officials to reduce some of these costs and amend current collective bargaining agreements, which require medical units and wings to be staffed even when there are no patients in them.
“There has to be some changes to the way staffing is handled,” Lord said. “It’s an inequitable situation, and the people who work there do excellent, wonderful work. We’re grateful and fortunate to have our employees, but at the same time, we have a problem and it has to be resolved, so it’s either going to come through a reduction in force or it’s going to come through funding, so some way, some how, it’s got to happen. No business can operate under that scenario.”
About $1.3 million in costs, McFarland said, may be saved if the Kauai regional board decides to not fill 34 positions that have been incorporated in the 2014-2015 fiscal year budget.
“We’ve worked hard to try to come up with a plan that will see us through 2015,” Lord said.
The HHSC Kauai regional board was scheduled to take up its budget on Wednesday and discuss the possible closure and consolidation of the Kalaheo Clinic, but the results of those talks were not available before press time.
