State weighs hospital deficit options
Democrats ask the governor to aid the state facilities with surplus state funds
State Democratic lawmakers called on Gov. Linda Lingle yesterday to shift surplus state funds to Hawaii's public hospital network so it can stay afloat in the face of a massive budget deficit.
Lingle said she would consider ways to help Hawaii Health Systems Corp. but that state law is written in a way that limits her options.
The state subsidized system operates about a dozen hospitals, mostly on the neighbor islands, including Maui Memorial Medical Center.
Hawaii Health Systems takes in about $450 million in annual revenues from Medicare, insurance companies and patients, but it is also supported by about $58 million from the state's general fund.
It is already on track, however, to lose $62 million during the fiscal year starting today. This loss will come on top of $42 million in unpaid bills to various vendors who provide services to the organization.
The hospital network, like many private hospitals, has been hurting as the federal government's Medicare program and private insurers have reduced the amount they will reimburse hospitals for medical care.
Hawaii Health Systems has also struggled with rising energy costs.
Senate President Colleen Hanabusa said the hospital system will run out of money and be forced to shut down in November if it does not cut costs or if new funds are not appropriated.
"It is the governor's prerogative more than ours, because the moneys are in her control," Hanabusa told a news conference at the Capitol held with other Democratic lawmakers.
Hawaii Health Systems has already begun to cut some costs.
It plans to lay off nine of about 60 full-time employees at its Honolulu headquarters, said spokesman Miles Takaaze.
Hanabusa (D, Nanakuli-Makua) said she was worried the hospital system could be pushed into cutting patient services. "That's what we don't want to see happen," Hanabusa said.
House Finance Chairman Marcus Oshiro (D, Wahiawa-Poamoho) said the governor had the power to "stop the bleeding" by shifting surplus money from the Departments of Health and Human Services to make up for the loss.
The governor disputed that, saying the 1996 law that created Hawaii Health Systems specifically barred the governor from interfering in the organization's policy and budget.
Lingle also accused Democrats of partially creating the current problem by devolving the hospital corporation's power to regional boards last year before the organization was ready.
In the past, the hospital system would shift funds from one part of the organization to another when it suffered budget shortfalls. But regional boards now have more control over how the money is spent under reforms enacted in the wake of complaints on Maui about the quality of care at Maui Memorial.
Lingle said she would work on a solution to the problems even though the law limits her options.
Emily Mendez-Bryant, a spokeswoman for the hospital system's West Hawaii Region, said the hospitals in Kona and Kohala would be cutting some administrative staff but no nurses or doctors. She said the hospitals planned to make sure the cuts would not affect patient services.
Wesley Lo, chief executive officer at Maui Memorial, said his hospital was not directly affected by the "current financial situation" at the parent organization.
Hanabusa and other lawmakers also announced they would form a task force to study health care needs on the neighbor islands.