Hospitals ask for quarter billion

LIHUE — Officials from the state’s public health care provider, Hawaii Health Systems Corporation, say they will likely need more than a quarter of a billion dollars in taxpayer money over the next two fiscal years to fully offset potentially crippling debts, ranging from new federal changes to collective bargaining raises.

Some officials, however, say they are not convinced the request should be approved.

“I don’t think they’re going to get that,” Rep. Daynette “Dee” Morikawa, D, Koloa-Niihau, said about the financial projections, which were released during a joint informational session Wednesday for the Senate Ways and Means Committee and House Finance Committee. “It’s going to be very interesting. I think, when those numbers came out to the budget committee, their jaws dropped.”

In an HHSC memo addressed to lawmakers, officials from the nation’s fourth-largest public hospital system said they have received about $313.8 million in collective bargaining funding, emergency appropriations and residency program funding over the last four fiscal years.

“This year has been a very challenging year for HHSC (and all other healthcare systems in Hawaii) financially,” HHSC officials wrote in a letter to lawmakers. “HHSC began fiscal year 2015 with only 30 days cash on hand with approximately 65 days in accounts payable, which is a very precarious liquidity position for any business.”

HHSC officials originally estimated they would need about $48 million in emergency appropriations to fully fund operations for the current fiscal year, which ends on June 30.

Interim HHSC Kauai Region CEO Scott McFarland said those estimates were later brought down to $31 million and reduced further to $24 million after a round of cost-cutting and cost-efficiency measures were instituted, including the reduction of 33 jobs throughout the state public health care system.

HHSC officials say they will need that amount on top of the $82.9 million in state funding budgeted for this fiscal year to stave off further cuts. HHSC officials say those funds would be used to pay off $60 million in collective bargaining raises for public hospital employees that were negotiated by former Gov. Neil Abercrombie’s administration for the 2013 to 2015 fiscal years.

“HHSC is also analyzing how it can re-structure itself to better meet the challenges of health care reform,” HHSC officials wrote. “In doing so, HHSC continues to evaluate its current operations to see where there may be opportunities for the system as a whole to operate more efficiently and effectively in providing accessible, high quality, cost-effective services that address the healthcare needs of Hawaii’s unique island communities.”

Rep. James “Jimmy” Kanane Tokioka, D, Omao-Wailua, said the funding request will have to be looked at hard.

“You need to break it down hospital by hospital by all the different facilities that we have,” he said. “I’ve supported all two (Samuel Mahelona Memorial and Kauai Veterans Memorial) hospitals since I’ve got into the Legislature and, is it important that we keep these hospitals open? In my mind, yes. But there are other people in the state of Hawaii who do not believe Kauai should have three hospitals.”

The best alternative, HHSC said, is to have the public health care system pursue more public partnerships, which would require approval from the Legislature.

“HHSC believes that the best alternative, in order for its communities to receive the health care they deserve at the minimum cost to the state of Hawaii, would be to find another health system which would engage HHSC in a public-private partnership,” HHSC officials wrote. “All regional boards and the corporate board support the exploration of the concept of public-private partnerships.”

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