HHSC names new leader

LIHUE — Officials from Hawaii Health Systems Corporation selected a new regional Kauai CEO to replace Scott McFarland, who filled the role on an interim basis for nearly two years.

Peter Klune was picked by the state public hospital system’s 11-member Kauai regional board to succeed McFarland last week.

HHSC Kauai Regional Board Chair Patrick Gegen said the decision culminated a nearly three-month long selection process in which they received over 70 applications for the permanent CEO position.

They eventually narrowed their choices to four prospective candidates, including Klune, who was ultimately chosen by a unanimous vote.

“His expertise in hospital operations includes multiple facility systems, as well as small, rural critical access hospitals — many of which operate as public or district hospitals — and makes his background well-suited for working on Kauai within the HHSC system,” Gegen said of Klune.

McFarland said he will remain on Kauai and advise health care providers on a consultant basis. He said he was thankful for his time with HHSC.

“I have been so blessed with the compassionate, high-quality care that’s given to those at KVMH (Kauai Veterans Memorial Hospital), Samuel Mehelona (Memorial Hospital) and the clinics,” McFarland said by phone on Friday. “Regardless of who is in the CEO position, the people who serve our patients and our residents are really what matters. There should be no concern about this sort of transition from to Scott to Peter — I’m sure he’s going to keep up the great work that’s happening.”

But not everyone agreed with Klune’s selection.

Rep. Daynette “Dee” Morikawa, D, Koloa-Niihau, said she hoped regional board members would have selected someone “from within the system” and pointed to McFarland’s leadership during tough, if not dire, economic times.

“Under the leadership of Scott McFarland, I believe they did a lot of cost cutting and were more efficiently run, so I can understand that he may have made some people upset, especially when he needed to lay off employees,” Morikawa, wrote in an email. “Not knowing the details of this new appointment worries me because I’m not sure how it will affect the morale of the employees and how it will be financially affordable.”

McFarland assumed the interim HHSC Kauai regional CEO position in November 2013 after succeeding Jerry Walker, who served in a similar role for nearly five years.

Some say McFarland came in at a particularly critical time for the state public hospital’s Kauai region, which includes KVMH, Samuel Mahelona Memorial Hospital and four outpatient clinics in Waimea, Port Allen, Kalaheo and Kapaa.

“Scott was chosen by the board to serve as Interim CEO during a very difficult time,” Gegen said. “During his first week in the position, he had the difficult task of asking the state Legislature for just under $10 million just to ensure that our region could continue serving our patients and residents and continue paying our employees and local vendors that provide services to our facilities.”

Since then, HHSC officials cut about 22 people on Kauai late last year — eight of whom were either rehired or found another job within the statewide HHSC system — and considered closing the Kalaheo Clinic, a decision that was later reconsidered.

“Since that tumultuous beginning, Scott has helped bring significant financial stability to the region,” Gegen said. “We are grateful for the service provided by Scott over the past 17 months because we are on a much firmer financial and operational foundation than when he stepped into the interim CEO role.”

Rep. Derek Kawakami, D, Wailua-Hanalei, agreed and said McFarland “has worked hard and tirelessly to improve the services, financial stability, and accountability in our two HHSC hospitals.”

“He inherited a challenge and met the challenge head on — we couldn’t ask more out of him,” Kawakami wrote in an email.

Klune was an independent health care consultant for the past two years in southern California. Before that he was the CEO Palo Verde Hospital in Blythe, California. He could not be reached for comment Friday afternoon.


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