LIHUE — The corporation overseeing Kauai’s two public hospitals will seek $7.3 million in emergency funding at a public hearing today before the state Legislature to keep the state-funded public health system afloat.
The request, outlined in House Bill 3, is nearly triple the $2.5 million amount that Hawaii Health Systems Corp. officials were planning to ask legislators before the special session began on Monday.
In a written testimony submitted to the House Committees on Health and Finance on Monday, HHSC Acting President and Chief Executive Officer Alice Hall said $2.5 million “will not be sufficient to cover the overdue bills and obligations of the region.”
She testified that the Kauai region — consisting of Kauai Veterans Memorial Hospital; Samuel Mahelona Memorial Hospital; and four clinics in Waimea, Port Allen, Kalaheo and Kapaa — has spent its first two quarters of general funding allocations, borrowed $2 million from the Maui region, and not paid more than $2 million in its share of “systemwide obligations” to the corporate office.
The Kauai region, she said, also has “very high account payables and does not project enough money to meet payroll and other obligations without a further infusion of cash.”
“If one region does not pay its share, the burden falls on the others to make up for it. Unfortunately, none of the hospitals have the extra cash to make up for Kauai’s shortfall,” Hall wrote.
If the Kauai region were to only receive the $2.5 million in emergency funds requested initially, the local health care providers “will stop getting deliveries of some needed supplies and not be able to meet payroll by the end of the calendar year.” The proposed $4.8 million increase in those funds, Hall said, would help the Kauai region remain solvent through next spring, when another emergency appropriation can be considered.
The funding diagnosis
The House Committees on Health and Finance unanimously approved bill amendment for increased funding on Monday, leaving the bill to be considered by the Senate’s Ways and Means and Health Committees today.
But, even if the emergency funding is awarded, HHSC officials say there is work to be done throughout the public health care system.
“With very little cash on hand, HHSC is facing some difficult decisions relating to the provision of services or restructuring for a more cost effective organization,” Hall said. “Kauai is the first region to be in this position; others will follow unless we get more funding or reorganize in a fashion that changes our cost structure.”
The nine-member HHSC Kauai region board acknowledged in their testimony before the Senate that “significant problems” with the island health system’s coding and billing departments, along with a “lack of follow up processes,” are contributing to the rising accounts payable debts.
What’s more, board members said daily patient levels at the Samuel Mahelona Memorial Hospital’s long-term care facility is “below sustainable level,” contributing an over $2 million shortfall for one of HHSC’s revenue sources at a time when there has been a mandatory 2 percent reduction in Medicare reimbursements from federal sequestration.
These, however, aren’t the only challenges facing the island’s health care providers, Hall said.
Between 2011 and 2013, she said a total of $15.6 million in general appropriations from the Legislature were restricted by the state.
A long-term remedy
To solve the billing and coding issues plaguing island health care providers, regional board directors hired two support staff members to shore up HHSC’s system.
The two health corporations servicing Kauai, Hawaii Pacific Health and HHSC, are also working on a study to determine where services can be improved for island residents.
Areas now being identified, the directors said, are focused on behavioral health, surgical call coverage, and the recruitment of specialists.
The health care providers are also working on establishing a committee, aligning their services with Hoola Lahui Hawaii, to provide the primary care base and possibly aligning their clinics to bolster access without duplicating efforts.
The hearing on House Bill 3 will take place before the Senate’s Ways and Means and Health Committees at 1:30 p.m. today in Room 211 at the Hawaii State Capitol in Honolulu.