Hospital group plans cutbacks

Administrators cite unreimbursed care at Straub and Kapiolani

Hawaii Pacific Health is planning to reorganize, eliminating or merging some jobs, to improve efficiency and reduce costs because of losses of as much as $59 million in 2003-04, according to hospital officials.

"All hospitals in Hawaii are facing a serious problem of financial shortfalls due to the underreimbursement situation," Hawaii Pacific Health spokeswoman Pat Oda said yesterday. "Government payers don't pay the full cost of providing care and the cost of caring for patients has increased so much, we're not able to cover the cost."

She said HPH's four hospitals and 17 clinics have improved operational efficiencies in recent years, but more steps are needed.

Hawaii Pacific Health hospitals include Kapiolani Medical Center for Women and Children, Kapiolani Medical Center at Pali Momi, Straub Clinic & Hospital and Wilcox Memorial Hospital on Kauai.

Executives met with more than 100 managers of the system Friday to discuss the proposed reorganization, Oda said. Jobs will be affected in some cases, she said, adding that some changes will happen soon and others might take up to 18 months.

She said the reorganization will focus on areas that don't directly affect patient services.

Hawaii Pacific Health in 2003-04 had a $59 million shortfall, said Dr. Virginia Pressler, senior vice president for government relations and marketing.

That was the difference between what the hospital system spent to provide care and what it received in government reimbursements for patients under Medicare, Medicaid and Quest programs, she said.

Pressler said an American Hospital Association report in 2003 showed Hawaii hospitals as a whole (excluding Tripler Army Medical Center) had a 25 percent loss in caring for Medicaid-Quest patients compared with 4 to 9 percent nationally.

Hawaii hospitals lost 21 percent on Medicare patients, compared with 2 to 6 percent on the mainland, she said, adding: "We are not getting adequate government reimbursements for Medicaid, Quest or Medicare. There are huge losses because of that."

The public and legislators think of the hospitals as private operations that don't need support but they "really are public hospitals," Pressler said, pointing out 43 percent of discharges from Kapiolani are Medicaid-Quest patients. "And the four hospitals serve 36 percent of the entire Medicaid-Quest population."

While it costs about 25 percent more to provide health care here compared to comparable mainland hospitals, Hawaii medical insurance premiums are significantly lower than on the mainland, she said. They're expected to be 27 percent less next year, she said.

"Whose pocket is it coming out of? It comes out of the hospitals. We're getting squeezed from all sides. We can't afford it," Pressler said.

Straub loses at least $500,000 a year on its burn unit, the only one in the Pacific, Pressler noted. "It's in jeopardy all the time. We get no state support for it. Most patients are on Medicaid or uninsured," she said.

State legislation is pending to establish a special fund to help support and expand the trauma system.

But Pressler said it may not provide enough money to cover emergency rooms throughout the state.

She said she is trying to get support from Hawaii's congressional team, especially for Pacific patients. Many American Samoan patients go to the emergency rooms with no insurance coverage, she said.

Kapiolani has had cases of very sick Pacific children involving costs from $500,000 to $1 million, she said. "It looks like we're not going to be paid anything. We can't afford to absorb those losses."

It's the hospital's mission to care for these children, but these cases are national issues, she said.

Wait-listed patients are another issue, Pressler said.

These are patients who are ready to be discharged but have nowhere to go because of lack of long-term care beds, mental health problems, homelessness or special care needs, she said.

"We have hundreds of wait-listed patients in all hospitals in Hawaii. ... They're taking up our acute care beds. It's a huge expense, costing everybody money, and it's not good quality of life for patients and their families," Pressler said.

For example, she said Straub couldn't find a bed anywhere in Hawaii for a burn unit patient with mental health problems and had to send her to the mainland with a nurse escort at the hospital's expense.

"I don't know if the state is going to pay us or not. It shouldn't be the hospital's responsibility and cost. It should be their (state's) responsibility," she said.