by Andrew Walden
Is this the last chance to save the insolvent Hawaii Health Services Corporation?
HHSC Maui Region CEO Wes Lo and Hawaii Pacific Health President and CEO Ray Vara teamed up at a news conference today to announce their proposal for a partnership agreement between the 100-year old parent company of Straub, Pali Momi, and Wilcox and the HHSC flagship Maui Memorial Hospital along with the smaller Kula and Lanai Hospitals.
Setting the stage as the executives walked in, the Hawaiian flag flew upside down outside HHSC's Leahi Hospital. Perched on the ridge behind Diamond Head, Leahi--not part of the proposed partnership--boasts a majestic view of the Waikiki shoreline, but like many HHSC facilities, the building itself appears not to have been updated since Statehood.
The HGEA-controlled Hawaii State Legislature has rejected legislation to partner the HHSC with private medical systems repeatedly since the 2009 "Stroudwater Report" called for conversion of HHSC from an HGEA job trust to a non-profit hospital system and liberation of the system's 5,000 employees from the civil service system. Potential partner Banner Health Systems walked away from negotiations in 2013 after legislators used the excuse that Banner was a Mainland company to reject legislation authorizing its partnership proposal. HGEA President Randy "F*** You" Perreira takes credit for the collapse of a 2014 effort to pass partnership legislation. Within the last few days, Kaiser Health Systems announced that it would not be making a partnership proposal to HHSC.
Is this the last chance? At the news conference, the question draws very different answers from HHSC and HPH:
HHSC's Wes Lo replies, "I don't know if this is the last chance or not. I think we've put together a strong offer."
Ray Vara of HPH says, "We've been around for 100 years, I suspect we'll be around for 100 more and beyond."
The difference between the two answers underlines the fact that the HGEA and UPW are toast. The only real question is how the hospitals will be transformed: Will HHSC be absorbed organizationally? -- or -- Will private hospital systems such as HPH, Queen's, and Kaiser step in to create new systems from scratch after the inevitable demise of HHSC?
Rejecting the partnership proposal, the HGEA's Perreira shows he is happy to continue living in a fool's paradise. Perreira tells KITV: "The leadership of Maui Memorial, including their board of directors and a number of physicians, they looking to sell the hospital. It's that simple. And, frankly, their talk of a partnership is a misstatement. Really, they are looking at an acquisition."
The partnership proposal actually calls for the lease, not sale, of the Maui HHSC hospital buildings, but the facts don't matter. As columnist Richard Borreca explained January 6:
"The HGEA knows change to the hospital contract will not help union members, and a damaged membership will not support the existing union leaders. So stall, talk and then block is the course of action for the HGEA."
The failure of then-Senator David Ige to deal with the HHSC crisis became an issue during the general election campaign. Now-Governor Ige told the January 6 Star-Advertiser:
"... we have begun negotiations with (Hawaii Government Employees Association) Unit 9 (nurses) as well as with some of the other units where some of their membership is part of the hospital, so I do know that there needs to be some contract changes that are necessary to make the hospital system function better. I think that that’s kind of the starting point. I think we will be having discussions with the unions and talking about the kinds of things that are essential to allow the hospital system, operating as a government entity, to be successful...."
In a news release distributed at the conference, the potential partners outline their proposed structure and legislative action being requested:
HHSC would enter into a 25-year lease operator partnership agreement with HPH.
- The lease operator partnership agreement would assign HPH with the sole responsibility for the provision of healthcare services at all Maui Region sites.
- HPH will lease all MMMC facilities at a nominal rate for the purpose of operating and managing healthcare services for the Maui Region.
- State to retain ownership of the land and facilities with responsibility for repayment of long-term liabilities, including postemployment benefit (OPEB) liabilities.
- MMMC would retain its current assets to allow pay down of current liabilities.
- HPH to work with State on alternative benefit arrangements for employees nearing retirement.
What we are requesting
- Legislation to authorize HHSC to enter into a public/private partnership agreement with HPH.
- Legislative intent to enable MMMC employees to transition into market based healthcare wage and benefit structure.
- Legislative intent to commit to a 10-year subsidy time horizon by the State.
- Funding of the State's CIP commitments through the current year.
- Initial appropriation to fund -jointly with HPH-implementation of necessary EHR/IT.
- Legislation to assure governance and operational structure to enable HPH to effectively operate MMMC.
PDF: News Release and Fact Sheet