DENNIS ODA / DODA@STARBULLETIN.COM R. Eric Beaver, chairman of the board of Kahuku Hospital, shook hands yesterday with Thomas M. Driskill, Hawaii Health Systems Corp. president and CEO, as Rep. Michael Magaoay looked on. Legislators, Kahuku residents and health officials discussed the future of the hospital at the state Capitol.

Kahuku Hospital in better health

No day goes by without someone in Kahuku Hospital's emergency room saying how glad they are that the hospital is there, said Sheila Toluta'u, a registered nurse there.

She said it's "an absolute necessity" to have a hospital on the North Shore because of the growth and tourism.

Recognizing that, the Legislature, state administration, the Hawaii Health Systems Corp. and community members began working in 2006 to keep the financially troubled hospital alive.

On Friday, the 80-year-old hospital will become an HHSC affiliate -- completing a complex, $2.9 million deal authorized last year by the Legislature and approved by Gov. Linda Lingle.

The transaction involved transferring Kahuku Hospital's assets in bankruptcy to Kahuku Medical Center, set up by HHSC as a new nonprofit organization to operate the hospital. The last bankruptcy proceeding was held yesterday.

"We've been working a long time for this day," said R. Eric Beaver, chairman of the Kahuku Hospital Board of Directors, noting the process took 16 months.

"It's a joyous occasion for us. ... a new beginning, especially for my district," said Rep. Michael Magaoay (D, Schofield-Kahuku). "We have many challenges."

"Things will change but we (75 professional employees) have jobs," Toluta'u said.

Lance Segawa, who will become administrator of the 23-bed facility Friday, said community meetings will be held to analyze the hospital's internal operations and discuss any changes.

He said the hospital will do what it can internally to be as self-sufficient as possible, but he can't say its financial problems will be solved. "In the current climate of health care, it makes it very difficult to have a bottom line."

The HHSC affiliation is expected to result in more support, technology, consultations and capacity, Segawa said.

Others at a news conference yesterday celebrating the hospital's survival and relationship with the state's community hospital system were Sen. Clayton Hee (D, Kahuku-Kaneohe); Thomas M. Driskill, HHSC president and chief executive officer; and state Health Department Director Chiyome Fukino.

Hee said enabling the hospital to stay open was a high point in his career as a legislator. The community was "in chaos" with the hospital's possible closure and unemployed workers, he said, describing hard work by many to maintain doctors and health care for the North Shore.

Kahuku Medical Center's funding -- about $1.5 million for each of the next two fiscal years -- won't be included in HHSC's budget but will be a separate line item in the budget, the officials said.