Maui region hospitals seek solutions for hospitals’ longevity

WAILUKU, MAUI, Hawai‘i (January 8, 2015) – Hawai‘i Health Systems Corporation’s (HHSC) Maui Region facilities - which include Maui Memorial Medical Center (MMMC), Kula Hospital and Lāna‘i Community Hospital - have advanced partnership discussions with Hawai‘i Pacific Health to enter into a partnership agreement. HHSC’s Maui Region ended fiscal year 2014 with an operating loss of approximately $43.4 million with an additional estimated $46.3 million loss is expected for fiscal year 2015.  Without a partnership agreement the Maui Region will be obligated to further re-evaluate staffing levels and the range of health services it provides. Legislative approval is needed for HHSC Maui Region to enter into formal partnership discussions with Hawai‘i Pacific Health.

The continued discussions between the two organizations represent a unified commitment towards a next phase of due diligence.  This allows HHSC Maui Region and Hawai‘i Pacific Health to formalize a relationship to present to State lawmakers.  Both parties agree that a partnership could ensure continued health services on Maui.

“We have a responsibility to meet the healthcare needs of our community, but do not possess the necessary resources or freedom to grow with their needs,” said Wesley Lo, CEO of HHSC Maui Region.  “A partnership with Hawai‘i Pacific Health provides a mutually beneficial solution to help reduce the financial burden to the State while addressing the long-term needs of our community.”

For many years, MMMC has publically proposed alternative solutions to eventually eliminate its dependence on state funds, including partnering with another healthcare provider to maintain and possibly expand services to the islands’ residents.

“We believe a partnership will benefit the community as well as both organizations and its stakeholders,” said Ray Vara, President and CEO of Hawai‘i Pacific Health.  “It is vital that we work together so we can create a more stable operating environment for Maui. Most importantly our intent is to grow health services and deliver enhanced care for the people of Maui County.”

The fiscal difficulties of the HHSC Maui Region have garnered the attention of the media and isle legislators for several years.  With financial losses estimated to be just short of $50 million, State officials have been proactive in seeking public opinion through town hall meetings and testimony to determine the impact budget shortfalls will have on their constituents.

Since 1971, the State has led a number of studies and task forces to evaluate the solvency of the public healthcare system.  Most notably, the 2009 Stroudwater report cited several strategic options to address the growing demand of HHSC on the State, noting incremental changes to be insufficient in addressing both short-term and long-term challenges.  The Stroudwater report recommended an external partner to assist HHSC in achieving efficiencies of scale and an integrated clinical service delivery system; however, this action would require legislation to proceed.

Maui Region leadership began exploratory discussions this summer in an effort to address the troubled healthcare system.  The region’s largest hospital has already felt the effect of current fiscal shortfalls.  In October, 2014, MMMC was forced to close its adolescent behavioral health unit, creating increased demand on local island partners, and challenging the ability of O‘ahu facilities to accept the increased patient demand.

Without the ability to partner with another organization, MMMC alone will require between $573 million and $843 million in State subsidies over the next decade just to operate at current levels. Not factored into these figures are critical issues like physician shortages and a maturing Maui community. The extrapolated numbers also do not include costs for the upkeep of an aging infrastructure and necessary technologies to improve efficiencies in operations.

“We are looking for ways to do more than survive, we are looking for ways to grow with the needs of our community,” Lo said. “This community deserves access to comprehensive, quality healthcare that evolves with their needs, close to home.”