KAPAHI — The Kalaheo Clinic, Sheila Heathcote said, is a place where medical staff and neighborhood patients know each other by name.
When she worked there as a registered nurse for three years, Heathcote recalls it as a place where nearby physicians could refer their patients when their calendar was full or additional services were needed.
“Back then, it was busy — it was busy all of the time,” the Kalaheo resident said. “We didn’t even have chairs in the nurse’s station — that’s how busy it was. You were on your feet and moving from 8 o’clock in the morning till 5 o’clock at night, every day.”
It is, she said, a place where many South Shore residents, especially those who are elderly, have been coming for years.
But come September, that will likely change when officials from the state’s public health system, Hawaii Health Systems Corporation, will close the Kalaheo Clinic’s doors and consolidate services provided there with another clinic about four miles away in Port Allen.
And that’s troubling to Heathcote, who lives about two miles away from the Kalaheo Clinic.
“It is going to be quite a crunch for people in this vicinity,” Heathcote said. “A lot of their patients are older people and they’ve been going to that clinic for years. I’m really concerned that their quality of life and their health care is going to suffer.”
HHSC officials say the move, which is now underway, is the first step in a difficult process to reassess the struggling health care system’s finances after a shaky legislative session.
“As the Kauai region faces major financial challenges, we continue to examine ways to improve our revenues and decrease expenses as we continue to strive to improve the quality of health care we provide to our patients,” Scott McFarland, the interim HHSC chief executive officer for Kauai operations, wrote in an email to employees. “The consolidation of our Kalaheo Clinic makes sense for the needs of our community, our families and our patients.”
No further reductions, he said, are currently on the table, at least for now.
During this year’s legislative session, McFarland and other HHSC officials asked state lawmakers to pass several bills that would help buoy the public health care system, which has relied heavily on state subsidies to keep it afloat in recent years.
In all, HHSC officials were seeking $18.2 million in emergency appropriations to offset reductions to Medicare reimbursements, pay off collective bargaining shortfalls and fund Kauai region operations.
That bill, Senate Bill 2866, was signed by Gov. Neil Abercrombie on May 12 and will provide $15 million in emergency appropriations to HHSC for costs accrued during the 2013-2014 fiscal year, which ends on June 30.
Just under $17.4 million was also approved by the state Legislature and the governor to fund collective bargaining pay increases for HHSC employees for the two fiscal years between 2013 and 2015.
Another bill, however, which would have given HHSC officials the ability to work with private health care partners, failed to pass through the state Legislature.
Though the approved funds will help fund HHSC’s operations, at least until the next legislative session, it is still well below the cash needed to offset the public health care system’s estimated $39 million shortfall for the 2014-2015 fiscal year.
“Coming up $39 million short is very challenging for all HHSC regions, including the Kauai region,” McFarland said.
Kauai region officials, he said, are now working with their physicians, employees and board “to get a regional fiscal sustainability plan in place for 2015.”
This year, McFarland said HHSC officials are seeking to cut about $5 million in costs for the Kauai region and implement “some revenue enhancements and increases related to the services that we provide.”
HHSC officials, he said, are also working with collective bargaining and union officials to create flexible staffing solutions when the hospital’s census is low.
“We’re going to have to work through challenges as a team and as a community,” McFarland said. “Neighbor island health care is going to be under a lot of stress over the next 14 months. Some tough decisions have to be made in this region as well as other regions and then we’re going to support one another to get through the period.”
Other system-wide changes, McFarland said, include “looking at what can be done to improve back office functions like administration, billing or information technology.”
“I think this is a good process for us to go through because it allows all the regions to look at neighbor island health care as a system,” McFarland said. “What we’re looking at is first making sure that we’ve got a plan, are maximizing revenue, and collecting for all that we bill for.”
The biggest challenges facing the entire health care system, McFarland said, are decreasing Medicare reimbursements from the federal government.
These uncompensated expenses, he explained, often leave the entire public health system holding the bag to pay for those costs.
“The costs associated with delivering health care keep going up and our reimbursements keep going down, so you can imagine that imbalance is unsustainable, so we really have to look and prioritize how we best staff and provide services in the facilities in which we’re currently operating so that we can continue to deliver for the community,” McFarland said. “We look forward to having conversations and discussions with the community, but we’re certainly not at risk for closing Mahelona or KVMH. That’s not going to happen in the near term, certainly.”
Services and business hours, meanwhile, will be expanded at HHSC’s Port Allen and Waimea clinics to accommodate Saturday appointments, he added.
The reassurances, however, bring little comfort to Heathcote, who is worried that existing staff at the Kalaheo Clinic may lose their jobs.
“I’m no spring chicken but I broke my wrist a couple of years back and thank goodness that clinic was there,” Heathcote said. “I was just in excruciating pain and I don’t know what I would have done without it.”