The United Public Workers union representing Hawaii health care workers is suing to block the privatization of the state’s hospitals.
An injunction filed in federal court in Honolulu on Thursday seeks to bar the state from implementing House Bill 1075. The legislation approved this past session allowed Maui’s three state-run hospitals to begin the privatization process and paves the way for facilities like Kona Community Hospital to pursue the same avenue.
KCH administrators facing a $6 million shortfall have eliminated 34 positions, and plan to close the skilled nursing unit next month. Administrators and board members at KCH have expressed keen interest in seeking a public-private partnership with an entity such as The Queen’s Medical Center for financial and logistical support.
The union is pushing back against public-private partnerships as the answer to recurrent budget shortfalls. The suit alleges the provisions of H.B. 1075 violate a clause in the contract between UPW and the state which prevents the state from abrogating its contracts.
“Privatization of our state hospitals would have a profound effect on the communities they were originally intended to serve,” said Dayton Nakanelua, UPW state director, in a statement.
“We already see how layoffs at several of our hospitals are not only affecting those who work there but also patients and their families, as well as diminishing our ability to care for an aging population,” Nakanelua said. “We have to keep in mind that health care is about people, and people should be the number one priority.”
State Sen. Josh Green, an emergency room physician who until recently chaired the Senate Health Committee, has been a key supporter of privatization, saying the old health care model is no longer able to sustain the public hospital safety net. Thursday, Green said he was committed to making sure the health care safety net survives.
“That will take compromise and sacrifice from everyone,” he said.
Green said he feels strongly that an emergency appropriation would help the period of transition from public to private operation of the hospitals. The statewide Hawaii Health Systems Corporation faces a $50 million shortfall for the current fiscal year.
To accomplish an emergency appropriation, the governor would need to coordinate with leadership and call a special session, Green said.
Gov. David Ige’s office did not say whether the governor intends to back an emergency appropriation.
Ige’s spokeswoman Cindy McMillan said the UPW suit is being reviewed by the Department of the Attorney General and other appropriate counsel.
KCH will keep the skilled nursing unit closed only as long as necessary, and intends to reopen the facility when funding allows, CEO Jay Kruezer said at a public hearing in June. Residents who showed up for the meeting called on the state to fund essential health services, saying there are few options to what KCH offers.
Kreuzer said the budget shortfall was created by a new requirement to pay retiree health benefits previously covered by the state, along with collective bargaining agreements that increased labor costs.
The hospital began cutting positions on July 1. KCH declined to list the positions eliminated, citing employee privacy. The positions range across clinical and non-clinical departments, KCH spokeswoman Judy Donovan said. The hospital also declined comment on the UPW lawsuit.
It will not be clear how many employees will be able to move into other positions until the hospital’s human resources department completes a 90-day process, said Donovan.
The 18-bed skilled nursing unit will no longer accept patients starting Sept. 1. Administrators say it could take up to 60 days to release existing patients or transition them to another facility.