Hospital layoffs pass state muster
The Hawaii Medical Centers' staff cuts didn't violate conditions for a sale, the state says
The state has determined that staffing cuts at the Hawaii Medical Centers earlier this year didn't violate conditions required for the approval of a sale by St. Francis Healthcare System of Hawaii.
The state approved the $68 million sale of the hospitals late last year to a local group of physicians and Wichita, Kan.-based CHA LLC, formerly known as Cardiovascular Hospitals of America, which initially said it would retain all 1,634 hospital workers, but later laid off more than 100.
The State Health Planning & Development Agency, which regulates health-care projects and acquisitions, and the Attorney General's office were separately reviewing the layoffs at the former St. Francis Medical Centers.
After requesting more information on the numbers and types of staff to be reduced, staffing ratios by department and the impact on patient care, SHPDA concluded that "the project in fact didn't differ substantially from that which was authorized," Darryl Shutter, the agency's regulatory branch chief, said yesterday.
The attorney general's office also is no longer reviewing the situation, said Hugh Jones, deputy attorney general.
"We are very pleased to have passed another regulatory milestone," said Danelo Canete, CEO of the Hawaii Medical Centers. SHPDA's decision, issued last Friday, "shows that our treatment and staffing model meet the needs of our community," Canete added.
This means that the Hawaii Medical Centers can move forward with plans to restructure hospital finances and staffing levels.
Hospital executives had previously said they had inherited a much higher staffing level than anticipated and that layoffs were necessary to improve the hospitals' weakening financial situation and prevent a closure.
Even though the buyers said they would use "reasonable efforts to retain (employees) for at least one year" after the sale, they later realized they could keep only enough workers to sustain daily operations, Canete previously said.
The hospitals' financial deterioration has come after years of providing charity care for the poor and uninsured and servicing a high number of Medicare and Medicaid patients, which compounded debt.