Layoffs expected at Big Isle hospital
North Hawaii hospital prepares layoffs to offset millions in losses
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North Hawaii Community Hospital officials are trying to stave off a financial crisis, but they are expected to announce employee layoffs today as part of a turnaround plan.
Contracts of three administrators already have been terminated.
Founder Earl T. Bakken severed his connections last week and board President Pat Bergin is resigning but will remain until the end of the year.
Paul Dunne, vice president for fund development and marketing, said the hospital faces a deficit of more than $1.6 million next month and wouldn't be able to meet the payroll or pay vendors without immediate action to reduce costs.
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Employee layoffs were expected to be announced today at North Hawaii Community Hospital as part of a "turnaround plan" to avert losses threatening its operation.
Managers of the Big Island's small Waimea hospital planned to present a plan to the board of directors this morning after "agonizing" over the proposed cuts in meetings yesterday, said Paul Dunne, vice president for fund development and marketing.
Contracts of three administrators already have been terminated -- Kenneth Riff, former executive director of the Heart Brain Center; Jone Flanders, cardiologist; and Sally Kaufmann, administrative director of the center.
Two of the most prominent people associated with the hospital also are cutting their ties.
Earl T. Bakken, renowned inventor of the first wearable pacemaker and founder of the North Hawaii hospital, severed his connections last week amid a series of management changes.
Pat Bergin, board president for the past eight years, is resigning, but will remain until the end of the year to help the hospital through the transition, Dunne said yesterday in a telephone interview.
One of the hospital's major developments was the Heart Brain Center, a major interest of Bakken, who along with his wife gave $10 million in 2004 to the prestigious Cleveland Clinic to study heart and brain relationships as a partner of the North Hawaii hospital.
Dunne said the Heart Brain Center was mostly doing screening, which it will continue to do as part of a Community Wellness Department concerned with diabetes, glaucoma, immunizations and other health issues.
About 150 Waimea residents attended a meeting last Wednesday at which Jeff Comer, the hospital's new chief executive officer, described the situation.
Dunne said the hospital's bondholders at a meeting 2 1/2 months ago requested a "turnaround plan" after $7.5 million in losses last year.
He said the hospital faces a deficit of more than $1.6 million next month and wouldn't be able to meet the payroll or pay vendors without immediate action to reduce costs.
Comer developed a plan calling for a 15 percent reduction in areas affecting the bottom line, which includes the 460 to 480 employees, Dunne said. He said the 40-bed hospital "is overstaffed according to national hospital standards."
Dunne said the employees "are a wonderful group of people. Part of the reason it's taking so long is we're agonizing over every person in one of these layoffs. We're saying, as opposed to cutting a person, can we maybe job share?"
Dunne emphasized that the layoffs "will not affect customer care," adding, "Quality of care is still the most important piece of this."
The hospital, chosen by AARP magazine in 2001 as one of 15 "Hospitals with Heart" across the nation, changed management last fall from Adventist Health of Roseville, Calif., to Quorum Health Group of Brentwood, Texas.
"Our hope is within 1.5 years we should be at a break-even point for the hospital," Dunne said, adding that it's purely a financial situation. "You just cannot lose $7.5 million and stay open much longer."
He said that about $4 million of last year's loss is being offset "through the generosity of a lot of donors."
As with other isle hospitals, North Hawaii Community Hospital is suffering from low cost-reimbursements -- about 40 cents on the dollar, Dunne said. It is a beneficiary of Parker Ranch and receives no state or federal support. It relies on donations, he said.
Bakken has been president emeritus of the board and is still welcome to sit on the board in that capacity, Dunne said.
However, Bakken, in a statement last week, said he could no longer work with the hospital directors or the CEO.
"The mission, vision, values and philosophy, based on the spirit of aloha, are what set this hospital apart from all others, drew me to it in the first place, kept me intimately involved all along, and are what I believed would ensure its long-term operational success," he said. "Now it seems these very founding principles that formed the heart and soul of North Hawaii Community Hospital appear to have been forgotten."
Leila Staniec was administrative assistant of Lucy Henriques Medical Center when it merged with North Hawaii Community Hospital in 1999. She became director of community relations and volunteer services, a position she held until she resigned May 16. She said she loves the hospital and didn't want to retire but that the atmosphere began changing in November as various interim CEOs arrived, saying they were directed "to clean house."
She said she felt "very sad" about Bakken, who "has done so much for our community and this hospital. We have had people come from all over the world who heard of our hospital from Earl Bakken, who on travels took videos of the hospital and would promote us worldwide."
CORRECTION Wednesday, July 16, 2008
Leila Staniec was administrative assistant of Lucy Henriques Medical Center when it merged with North Hawaii Community Hospital in 1999. She became director of community relations and volunteer services, a position she held until she resigned May 16. Originally, this article had incorrect information.
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