Kaiser unveils new wing

Phase one of the new Moanalua Medical Center is scheduled to open in mid-May

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Kaiser Permanente Hawaii unveiled yesterday a new six-story tower as part of a larger $168.8 million project that will add more hospital beds and help to control health-care costs.

The state's largest health-maintenance organization, which has improved its financial situation after implementing a cost-cutting program, held a grand opening for the 176,000-square-foot wing, marking the beginning of a new growth strategy over the next three years. The new wing is expected to open for patients in mid-May.

The expansion is intended to reduce the expenses Kaiser has incurred for sending some members to outside hospitals. The project, which began in May 2005, will include in its second phase the renovation of 95,000 square feet at the existing medical center.

Though raw materials and labor have risen 30 percent since the project began, pushing total costs to $168.8 million from $150 million, Kaiser expects construction to be completed in spring 2010.

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Kaiser Permanente Hawaii unveiled yesterday the first phase of a $168.8 million tower project at the Moanalua Medical Center, marking the beginning of a new growth strategy intended to carry it through the next three years.

HMO marking a new chapter Kaiser's $168.8 million expansion of Moanalua Medical Center, the first major renovation since the medical center opened in 1985, includes: » A six-story, 176,000-square-foot wing totaling $141.7 million that will add patient beds, a new labor and delivery section with expanded mother and baby suites, an emergency department three times its current size, eight additional operating rooms, a clinic lab and blood bank, and an educational conference center open to the community. » A wing that has been designed with green technology, reducing environmental impact through recycling and sustainable architecture and landscaping. » A second phase that will result in the renovation of 95,000 square feet at the existing medical center by spring 2010. » The addition of 68 patient beds to bring the total number of beds to 318. IN ADDITION » Kaiser is spending approximately $60 million for construction materials bought from local businesses and $38 million for new technology as part of the project's total cost. » Kaiser has spent about $39 million in labor costs for newly created jobs over the last three years of construction.

The state's largest health-maintenance organization, which has improved its financial situation after cost-cutting efforts, held a grand opening for the 176,000-square-foot wing. It is expected to open for patients in mid-May. Kaiser paid $141.7 million in cash for construction of the six-story tower, thereby dodging recent turmoil in the credit markets, said Janet Liang, Kaiser Hawaii region president.

Kaiser saw six months of membership growth, resulting in the company breaking even last year and ending three years of losses for the hospital and health plan combined, Liang said.

"We're really excited about the future," she said. "We're currently planning for growth, including new facilities and expanded hours."

Kaiser, which is celebrating its 50th anniversary in Hawaii this year, also recorded a net gain in the 2008 first quarter, Liang said. The company plans to release its earnings report within the next month.

However, the company will continue to scrutinize new positions and hiring because of volatility in the health-care market, she said.

Kaiser has 200 full time and 100 part time new and existing open positions, which is attributed to the rapid growth in membership. The company eliminated 144 positions over the past two years as part of its restructuring.

The HMO gained 2,000 new members from a year ago, bringing total membership to 224,000. Membership is projected to grow 1 percent this year.

"It's a volatile market. I don't feel like we can ever rest," Liang said. "I never want us to have to go back to some of the strategies we've had to use in the past."

Liang doesn't expect further staff reductions over the next three years, though she added the caveat that new technology, expanding services or moving facilities could impact some of Kaiser's 4,500 workers.

Kaiser has implemented training programs to help workers who may be affected by any changes move into other positions within the organization, she added.

Moreover, Kaiser is looking to expand service offerings on the Big Island and in Kapolei, Liang said. It also will expand staffing and services at Moanalua in a new 22,000-square-foot emergency room department, which is three times larger than the original facility.

"Instead of generating a lot of margin for ourselves, we're choosing to give back to the community in affordable rates, new facilities and expanded services," Liang said.

Kaiser raised rates for businesses and government employers by an average 2 percent on Jan. 1, a small increase compared to the 12.8 percent rate hike proposed by the Hawaii Medical Service Association beginning on July 1.

The project, which began in May 2005, will include in its second phase the renovation of 95,000 square feet at the existing medical center. Though raw materials and labor have risen 30 percent since the project began, pushing total costs to $168.8 million from $150 million, Kaiser expects construction to be completed in spring 2010.

The project, which represents the first major renovation since the medical center opened in 1985, will add 68 beds, bringing the total number of beds at the facility to 318. The expansion, which will offer members a larger, more personalized mother-baby unit as well as additional operating suites, is intended to reduce the expenses Kaiser has incurred for sending some members to outside hospitals.

Besides Moanalua Medical Center, Kaiser has 17 clinics on Oahu, Maui and the Big Island.