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KCH supportive of public-private partnership bill

March 16, 2014 - 12:05am

Senate Bill 3064, which made crossover this month, has progressed the farthest of any bill allowing public-private partnerships for Hawaii Health Systems Corp. facilities.

“We’re seeking a partner who will help us up our game,” said Dr. Alistair Bairos, chairman of the West Hawaii Regional board.

Such a partnership, Bairos and hospital CEO Jay Kreuzer said, is not a takeover of the hospital.

“The state can’t continue to increase subsidies (to the HHSC facilities),” Kreuzer said. “We’ve got to come up with another solution.”

SB 3064 requires any potential partner for HHSC facilities to be already operating in Hawaii. The bill’s introducer, Sen. Josh Green, D-Kona, Ka‘u, said that really leaves a handful of likely partners, including The Queen’s Medical Center, Hawaii Pacific Health and Kaiser Permanente. The bill also limits the potential private partner’s ability to make changes to staffing, requiring existing agreements to be honored.

Even with those concessions, meant to appease labor unions with workers in the hospital, as well as hospital users worried that a private partner would cut unprofitable services from hospitals that function as the state’s health care safety net, the bill’s progress nearly derailed last week, Green said. Bairos submitted last minute testimony asking for an amendment to allow mainland health care groups to be considered as partners and that request didn’t go over well with other legislators, Green said.

A partnership with a larger health care organization offers several advantages, Kreuzer said, particularly for small hospitals, where it can be difficult to create economies of scale in ordering supplies and creating operating efficiencies. The system’s individual hospitals operate as just that, not as a 13-facility system, he said. Neighbor island hospitals also aren’t competing with multiple health care organizations, and competition can help streamline how a hospital works, he added.

West Hawaii Regional board member Reed Flickinger said the hospital isn’t just waiting for a partner to come along and bail them out of its problems. Hospital officials have already been reviewing its workforce, and are bringing in The Huron Group, a consulting firm that has previously helped Queen’s and North Hawaii Community Hospital, finding significant savings there, Flickinger said.

“We’ll look better to prospective partners if we have done efficiency improvements,” he added.

One thing that will make Kona Community Hospital a good candidate for a partnership, Kreuzer said, is West Hawaii’s booming population.

“In most markets, the opportunity for growth would be very attractive,” he said, adding about 40 percent of people in West Hawaii have to travel off island for certain medical treatments.

Thus far, legislators have reacted mostly positively to the request, Kreuzer said.

This isn’t the first time HHSC officials and legislators have attempted to solve the hospital system’s financial problems, Bairos said. In the 40 or so years since the state took over what were once plantation and county hospitals, they have tried, with varying degrees of success, several ways “to get it right,” Bairos said.

This latest push, championed by Green and refined from last year’s conversations with a mainland-based health care system, is “very well thought out,” Bairos added.

The bill has been referred to the House’s health, labor and finance committees.