Kahuku Hospital given reprieve
An agreement with the state will keep the facility open at least through February
Kahuku Hospital will remain open through February under an agreement with the state Department of Health.
"We're optimistic that things will move in the right direction, at least until February," said Don Olden, Kahuku Hospital chief executive officer.
State Health Department Director Chiyome Fukino said she had signed a letter of support with the hospital's board, agreeing to release the remaining $500,000 of the hospital's fiscal year 2007 state appropriation.
The letter also says Gov. Linda Lingle's administration will ask the state Legislature for a $950,000 emergency appropriation to keep the hospital open until the end of June.
"That will give Kahuku the funds it needs to file Chapter 11 bankruptcy (reorganization)," Fukino said.
The hospital board had announced it would file for Chapter 7 bankruptcy liquidation last month and close the hospital at the end of the year.
Fukino said the emergency appropriation would allow the hospital to prepare for transfer to the Hawaii Health Systems Corp., the quasi-governmental agency that runs the state's 12 community hospitals.
The area's two state lawmakers, Rep. Michael Magaoay and Sen. Clayton Hee, sent a letter to the hospital yesterday supporting the agreement and promising to introduce legislation for HHSC to either acquire or share in the management of Kahuku Hospital.
The legislation and emergency appropriation require approval by the state Legislature.
Last week the hospital's board submitted a proposed memorandum of understanding to the state with provisions for the $500,000 release, $950,000 emergency appropriation request, HHSC legislation and switching its bankruptcy filing from liquidation to reorganization.
Fukino said the state Attorney General recommended she sign a letter of support instead, because a memorandum of understanding might be interpreted as a binding contract, and the administration cannot commit to actions that require legislative approval.
When the board announced the hospital closure, it said it was about $3 million in debt and operating at an average annual loss of about $1.2 million.