Six Kona Community Hospital employees are among 34 Hawaii Health Systems Corp. workers set to lose their jobs by December.
HHSC Acting President and Chief Executive Officer Alice Hall said the number of affected employees is lower than some workers expected, based on HHSC officials’ warnings after seeing how much funding the state Legislature provided for this year.
“It’s not a huge number, but it’s not the end, either,” Hall said.
Kona Community Hospital is the only Big Island Hawaii Health Systems Corp. location that will be laying off employees. HHSC officials announced a systemwide layoff, the result of a $48 million shortfall for the current fiscal year. An HHSC spokesman said officials were still calculating how many employees statewide would be affected.
Dan Brinkman, interim East Hawaii Regional CEO, said Hilo Medical Center, Hale Hoola Hamakua, Yukio Okutsu State Veterans Home and Ka‘u Hospital would not be laying off any workers.
“We have made reductions to some of our contract workers,” as well as eliminated some positions as staff members have resigned, Brinkman said. For now that, combined with other measures, has been enough to stave off layoffs.
In West Hawaii, hospital officials have been working with a consultant group that has looked for ways to improve efficiency and cut costs. CEO Jay Kreuzer said the group has identified and implemented changes that so far have put $3.5 million in one-time savings and $1.5 million in annually recurring savings in the bank.
Some of the savings come from seemingly small changes, such as reducing the number of linens on a hospital bed, that add up in the long run, he added.
Kohala Hospital had no employees affected by the reduction in force.
Kreuzer declined to say exactly which positions at Kona Community Hospital were being cut, because doing so might identify the employees who will be losing their jobs, but said patients should not notice an impact on the quality of care.
“I wish it were zero,” he said. “We’re not reducing or eliminating any services. Other regions may be doing something different.”
Hospital officials often cite labor costs as one of the hospital’s biggest financial obligations. Spokeswoman Judy Donovan said employee benefits are equivalent to 79 percent of the hospital’s net patient revenue. The national average is 45 to 50 percent.
Brinkman said the East Hawaii Region has been affected by the increasing gap between the state’s subsidy to HHSC and revenues.
“We think we can get through this year,” he said. “We are very concerned about next year. We’re not planning to reduce anything this year.”
About 70 percent of Hilo Medical Center’s patients are on Medicare or Medicaid, he said.
“That mix will always require some assistance,” Brinkman said.
HHSC officials said in a news release each region’s board of directors would continue to develop and implement contingency plans to meet the financial shortfall.
“We value our employees tremendously and we really tried to avoid this,” Hall said in an email. “Unfortunately, the current financial situation in some regions is not sustainable without significant changes, some of which have resulted in cost saving measures that include a reduction in force.”
HHSC employees already received noticed that the reduction in force was coming. Official notifications will be issued Tuesday.
This notification begins a 90-day process in which the affected employee will have 90 days before the last day of employment. During the 90-day period, affected employees may choose to be placed in a budgeted vacant position, and if none exists, can exercise the “bumping” process as described in applicable collective bargaining agreements, officials said. The “bumping” process may then extend the effects of the RIF beyond originally identified positions, a process that could take up to nine months. Further reductions may occur later in the year.
HHSC facilities face decreased state subsidies and health insurance reimbursements, while operating costs continue to rise and the need for health care in a growing population increases, the news release said. HHSC officials have been meeting with representatives from the state Legislature to discuss strategies and possible long-term solutions.
Hall said about 100 positions across the state have previously been eliminated, through various other kinds of cuts. Those positions were not part of the hospital employees’ collective bargaining agreement.
State Sen. Josh Green, D-Kona, Ka‘u, said he continues to be concerned about ensuring the hospital system has enough funding to remain fully staffed.
“We need to pass the reform I proposed last year,” he said, referencing his bill to allow a local, nonprofit hospital to partner with Kona Community Hospital. “This will help protect jobs.”
Hall agreed.
“We really need to fix it, allow us to privatize where it makes sense,” she said.