State hospitals
aren’t for sale

Talks with a private firm
look for some much-
needed capital

By Helen Altonn
Star-Bulletin

The state's 12 hospitals aren't for sale despite a big hole in their budget left by the last Legislature, say Hawaii Health Systems Corp. officials.

House Speaker Calvin Say raised the issue, inviting Texas-based Tenet Health Care, a private health-care system, to come here for discussions on possible joint-venture opportunities with the hospitals.

"It's just another option of public-private partnerships," Say said, pointing out that the national company "would have capital as backup."

Most of the hospitals are in rural neighbor island areas and operate at a loss. If Tenet were to acquire the corporation, the agreement could stipulate that the hospitals not be closed, Say said.

HHSC Vice President Kelley Roberson, chief financial officer, said any meetings held with Tenet executives would include representatives from the hospital system's unions.

"It's not our intent to sell anything," he said, adding that that's always been chief executive officer Tom Driskill's position. But the system needs $15.3 million to cover retroactive pay increases negotiated for the hospitals' 3,000 union workers and $4.4 million for raises from July 1 to Jan. 1.

The appropriations were deleted from the Legislature's collective bargaining bill. The House prepared the final draft and Senate conferees said they weren't aware of the missing section when they signed it just before a midnight deadline April 30.

Say said he believes the money committees deleted the appropriation when they raised a special fund ceiling for the corporation -- allowing it to generate more resources to cover pay raises.

But Senate Ways and Means Co-Chairs Carol Fukunaga and Andy Levin said they didn't know the appropriation was gone from the bill until the day after they signed it.

"When the hospital corporation called up in a panic, we could hardly believe it," Levin said. "They don't have a printing press. Raising the ceiling doesn't put money in their pocket."

Say said the corporation had enough resources to give "major pay raises in six figures" to its executives. He said legislators "were shocked last year" when they learned of the raises.

"The logic really isn't there -- punishing workers for decisions made elsewhere," Levin said.

In a letter to the speaker Monday, Diane J. Plotts, chairwoman of HHSC's board of directors, pointed out that the board must make the system competitive with the private sector despite legal restraints and minimal state support.

She said executive salaries must be competitive because of outside recruitment, and part of the pay is based on meeting financial goals.

The corporation reduced fiscal year losses from $35 million in 1996 and $46 million in 1997 to $17.7 million last year, Roberson said. Losses this year will be about $12 million to $15 million, he said.

He said Say's suggestions about finding additional revenue and increasing efficiency "are right on. We are doing it and will continue to do it, but the magnitude of this shortfall and the two-month period we have to deal with it just won't work."

The corporation asked the state administration to help resolve the problem and Fukunaga said, "We're also trying to see how we might be able to help HHSC so it doesn't turn into a battle between external groups trying to take it over."

"It should not be for sale," Levin added.