The East Hawaii Regional Board of Hawaii Health Systems Corp. voted Tuesday to actively pursue partnerships with other health care providers.
In a brief statement, Chairman Kurt Corbin said the measure was part of the health care network’s strategy to “secure our financial situation and preserve patient care services.”
The vote came one day after hospital administrators met with members of the the state House of Representatives’ Committee on Finance.
At that meeting, East Hawaii Regional CEO Dan Brinkman reported that the system would likely face another $7 million shortfall next fiscal year. The system began this summer instituting a total of 87 personnel cuts and multiple service cuts in an effort to deal with an anticipated shortfall of $7 million for the current year.
Also this summer, HHSC began informal talks with Adventist Health, which operates Castle Medical Center in Honolulu.
In a memo sent to employees Tuesday evening, Corbin explained that much of the East Hawaii region’s budget problems were because of pay raises negotiated by the state in collective bargaining, as well as increased charges for future health care benefits for retirees.
“Unfortunately, these two charges alone account for almost $13 million in new expenses for which we cannot afford,” he wrote. “Our goal was to be sure the Finance Committee was aware of these obligations for our region and of our need to have these fully funded in the upcoming legislative session. We clearly communicated that reductions in services and staff would be a likely consequence if nothing was done.
“This year-to-year cycle of financial uncertainty, as well as the limited availability of state funds, is of great concern to our board. They take very seriously their responsibility to preserve and enhance the health-care services in our community. At our board meeting (Wednesday), they approved a motion that directed our region to actively explore partnerships with other health-care entities as a strategy to secure our financial situation and preserve patient care services. As a part of our next steps, we will be working to have legislation introduced and passed that will allow our region and other regions to enter into partnerships.”
Similar legislation was signed into law following the last legislative session that has allowed Maui Memorial Medical Center to enter into negotiations with Kaiser Permanente.
“We are still at the start of this journey that involves many steps and many decisions,” Corbin wrote. “Our board and executive management team are committed to doing all that we can to ensure the health of our community and the well-being of our employees. I strongly believe that these two objectives can be accomplished in a way that is fair to our employees and their families and still preserves the essential services so vital to our community.
“As we talk further with Adventist and other potential partners, we will actively inform and communicate new developments. Our board and executive team are committed to an open and transparent process. After all … we are all in this together.”
Email Colin M. Stewart at cstewart@hawaiitribune-herald.com.