STAR-BULLETIN FILE Kahuku Hospital, the only emergency facility on the North Shore, announced last month it would close by year's end because of mounting debt. For now, it will stay open.

Kahuku Hospital stays open for now

The board of the private facility votes to work with the state on a funding solution

The Kahuku Hospital board of directors voted yesterday to keep the North Shore's only emergency medical facility open past the end of the year and to work with the state Legislature and Department of Health to find a solution to the hospital's financial problems.

R. Don Olden, the hospital's chief executive officer, said lawyers are reviewing a memorandum of understanding with the Legislature and the Health Department to adequately fund Kahuku Hospital or bring the facility into the quasi-public Hawaii Health System Corp., which runs 10 state hospitals on the neighbor islands and Leahi and Maluhia hospitals on Oahu.

"I think the community should be optimistic," Olden said.

Last month, the board voted to file for Chapter 7 liquidation bankruptcy and close the 78-year-old former plantation hospital at the end of the year because of mounting debt and a lack of state funding.

The plan to save the hospital came out of discussions with state Rep. Michael Magaoay and Sen. Clayton Hee, who represent the area, Olden said.

Hee said yesterday that he and Magaoay already had spoken to state Health Director Chiyome Fukino and Senate and House leaders. A meeting is scheduled for next week with the health systems corporation.

"Clearly, we've made significant progress," Hee said.

If the 25-bed Kahuku Hospital were to close, the nearest emergency room for the North Shore would be at Castle Medical Center, 32 miles away, or at Wahiawa General, 22 miles from Kahuku.

"We would be up a creek without it (Kahuku Hospital)," said Patrick Macy, a member of the neighborhood board who lives in Laie. "When it gets serious, they have to go to a hospital, and Kahuku is our only place."

Olden said the facility is about $3 million in debt because patient fees do not cover the cost of operating a small rural hospital.

The hospital needs about $1.5 million a year in state support, but received only $1 million this fiscal year, Olden said.

About $500,000 is left on that appropriation, which will allow the hospital to keep going for a few months more.

Olden said the hospital is trying to figure out how much money would be needed to keep it open. The hospital has about 110 employees.

Merging with the HHSC might save some money in billing, purchasing, insurance and other centralized costs. But there will be additional costs to file for reorganization in bankruptcy court to manage the remaining debt, legal fees and consulting fees, Olden said.

Once lawyers review the memorandum of understanding, the state and key lawmakers have to sign on or provide letters of support to the board, Olden said.

Health Department spokeswoman Janice Okubo cautioned that it was still early in the process and that much is needed to be done to save the hospital.

But, she said, "We've always been committed to try and help them."