Kahuku Hospital
cuts back,
fights for life

'If we can stay alive six months,' the
board chairman says, there's a good
possibility we'll make it

By Helen Altonn
Star-Bulletin

Layoffs, reduced staff hours and other cost-cutting measures are under way at Kahuku Hospital in its struggle for survival.

"If we can stay alive six months, I think there is a good possibility the hospital can make it," said hospital board chairman Daniel Ditto, president and chief executive officer of Hawaii Reserves Inc.

Ditto said plans are being implemented to reduce the hospital's deficit -- $1.3 million last year -- with savings and increased revenue.

Keith Ridley, Kahuku's chief executive officer, said eight positions have been eliminated, and layoffs and reduced hours will continue in stages over the next few months. "About 26 people will be affected in one way or another," he said.

Ridley said staff members are sad about the situation but aren't blaming the hospital because they understand the importance of maintaining health services.

"The quality of care and scope of services will not be reduced," he said.

Early release by Gov. Ben Cayetano of $390,000 from a legislative subsidy "has given us a tremendous break . . . allowing us even to get to this point," Ridley said.

"It looks like the money will carry us through September, and probably we will be able to go beyond that," he said.

An administrative consultant, Gary Stay of Utah, has joined the community fight to save the North Shore's only hospital. Stay ran a large hospital in Denver for many years and retired a few years ago from Intermountain Health Care, which manages nine rural hospitals, Ditto said.

"He is quite an expert in rescuing rural hospitals," he said.

Ditto said Stay has ties with people with financial expertise in rural hospitals and is developing a marketing plan for Kahuku. Basically he's receiving only living expenses while here, Ditto said.

Full-time employee layoffs will produce savings of about $400,000 to $500,000 a year, Ditto said.

But he said that will take awhile, stressing the need for interim grants or funding to keep the hospital going.

"It's a very important facility, not just for the North Shore but all of Hawaii," he said. "The North Shore is a playground for all of Oahu."

In a hurricane, tidal wave or other disaster, Ditto said, Civil Defense officials believe the North Shore would be cut off from the rest of the island.

"If that's true, it will leave us completely without medical facilities. That's pretty frightening."

Ditto cited these, among other developments, planned to save and improve the hospital:

Two pharmacies on the grounds will be combined, and Kaiser Permanente has been asked to put its pharmacy there.

Emergency physician staffing is being reconfigured for a savings of about $150,000 a year.

Kaiser and the Ohana Physicians Group have been invited to lease space for their doctors at Kahuku Hospital. A "one-campus medical center" could be created for the North Shore under a name such as Koolauloa Medical Center, Ditto said.

Possible affiliation of Kahuku Hospital with a larger health system is being explored in talks with The Queen's Medical Center, Castle Medical Center and the Hawaii Health System. The possibility of becoming part of a national health care organization also is being discussed, Ditto said, "but our preference would be to not bring in another large national concern."

The hospital is improving its ultrasound capabilities and setting up a telemedicine system with a Weinberg Foundation grant. "In theory, we should be able to connect with any hospital in the state, plus a number of hospitals on the mainland," Ditto said.

Professional services are being enhanced with addition of a podiatrist and a doctor specializing in obstetrics. The hospital also is trying to increase its cash flow with specialty clinics once or twice a month in orthopedics, cardiology and other medical areas.

A $65,000 grant was received to hire someone with a master's degree in social work to improve QUEST and home health care reimbursements to the hospital.

Changes being made in the hospital's radiology procedures are expected to save about $25,000 a year.