Wednesday, August 8, 2001

merger clears first
public hurdle

Kapiolani and Straub pass
the initial step with Kauai's Wilcox
next up for approval

By Lyn Danninger

THE PROPOSED MERGER between Kauai's Wilcox Health System, Kapiolani Health and Straub Clinic and Hospital cleared its first public hurdle at a hearing yesterday at the state capitol.

The state's Oahu Health Planning Council recommended approval for the first stage of the merger involving Kapiolani and Straub. The council hearing is one of the steps in the state Health Planning and Development Agency's certificate of need review process.

The next step will be to seek approval for the Wilcox hospital portion of the merger at an Aug. 14 public meeting on Kauai.

While the merger application was already submitted to SHPDA for review, the council hearing gave community representatives on the council the opportunity to question organization executives directly about the details of the plan.

The Hawaii Nurses Association, represented by HNA Executive Director Nancy McGuckin, was the only group to testify at the hearing.

McGuckin said her organization would have preferred a conditional approval of the merger pending further information and changes to the certificate of need application.

Questions about the financial and human resources aspects of the merger and the new organization's centralized management were raised by McGuckin,

Of particular concern to the nurses is what would happen should the merger not work out or if Hawaii Pacific Health estimates of savings gained from the merger are too optimistic.

"What if those numbers don't pan out?" said McGuckin.

"What if the merger fails? What happens? Is there an exit strategy in place? she said.

Though McGuckin said her organization was not opposed in principle to the merger, she said nurses were concerned about retaining the autonomy of their individual institutions over collective bargaining agreements and other personnel matters.

Representatives from Hawaii Pacific Health, the newly formed parent company of the three hospitals, presented their case saying the need to go forward is based on financial predictions of all three organi- zations. Those projections indicate that without the merger, limits in capital resources would make it difficult for the facilities to keep up with necessary improvements, they said. By combining resources and reducing duplication, the three entities could realize significant savings, they said.

Fran Hallonquist, executive vice president of Hawaii Pacific Health and CEO of Kapiolani and Pali Momi medical centers, said the new corporation was not planning to reduce or eliminate any services or change nurse staffing levels.

Concerns were also raised by the nurses and board members about how well the three organization's corporate and physician cultures would merge.

Hallonquist said efforts were being made to address employee worries.

"We did a cultural audit to understand their concerns. We don't look to blend everything except where appropriate. But we're looking to preserve the best of each culture," she said.

Kapiolani Health President and CEO Roger Drue, head of Hawaii Pacific Health, said while no target date for the merger had been set, the organization hoped to finalize details toward the end of this year, pending approval.

After the Kauai hearing, the merger applications for the three hospitals will reviewed together at two more hearings later this month on Oahu. SHPDA's decision on whether to approve the merger is likely to follow within a few weeks of those meetings.

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