Executives of Hawaii’s state-owned Hawaii Health Services Corporation say their hospitals are down to only a few days cash on hand, and they may have to close Oahu nursing care facilities such as Leahi Hospital and Maluhia Long-Term Care Health Center, throwing hundreds of elderly patients into the street with nowhere else to go.
Maui Memorial Hospital, the island’s only acute-care facility, is closing its adolescent mental health clinic. Oncology and dialysis could be next, forcing patients to fly to Oahu for treatment.
At a Health Committee briefing for the Hawaii legislature, Scott McFarland, CEO of the Hawaii Health Services Corporation (HHSC), Kauai region, told legislators, “If there is one hiccup, we will not meet payroll.”
Gary Yoshiyama, board chair of the HHSC, East Hawaii region, pointed to the hospital’s inability to pay for its collective bargaining agreements, explaining, “We cannot absorb the cost without deep harm to our community.”
Hawaii Government Employees Association President Randy Perriera’s response to HHSC’s troubles and proposals to save the near-insolvent system?
Proud of Obstructionism
Perriera’s remarks came to light in recently uncovered video of his keynote address to the union’s May 2014 biannual convention. There, he told delegates, “We helped defeat a bill that would have sold off our HHSC hospitals to the private sector…. For people … who look to sell our jobs out from under us; people who look to outsource services, deny what we have earned, try to cut our wages and benefits, and keep us down, I have a very simple two-word reaction: F*** you.”
The remarks are not surprising to those who have been working to solve HHSC’s multimillion-dollar financial shortfalls. In at least one private meeting, HGEA officials suggested they would prefer to close Kona Community Hospital than take HHSC out of the civil service system. Kona Community Hospital is the only hospital on the west side of the island of Hawaii (also known as the Big Island), serving approximately 45,000 residents.
Perriera also stated in his remarks, “Uninformed journalists … continue to blame HGEA for the failure of the bill to pass to privatize HHSC,” seemingly at odds with his boast they had helped defeat the privatization bill and his later rhetorical question-and-answer, “Is HGEA partially responsible for the failure of that bill to pass? Yes, and I’m damn proud to admit that.”
At 43,000 members, HGEA is Hawaii’s largest union. HHSC’s 4,000 employees are divided between HGEA and the United Public Workers union.
State-owned hospital system
Hawaii is unusual in that the state-owned HHSC hospitals provide most of the beds and emergency care outside of Oahu. On the Big Island, Kamuela’s North Hawaii Community Hospital (NHCH), a previously money-losing private hospital, has joined the Honolulu-based private nonprofit Queens Healthcare System. In sharp contrast to HHSC, NHCH is now in the black, recruiting MDs, and adding about 20 new positions.
A central point of contention between the union and those seeking reform is the recommendations in a report by Stroudwater Associates in 2009. The report takes direct aim at government employee union work rules and benefits: “The first ‘essential change’ calls for a conversion of HHSC from a public benefit corporation to a private non-profit 501(c)(3) corporation. By definition, this change would end HHSC’s status as an agency of the State, disqualifying it from remaining part of the State’s civil service employment structure.”
The report goes on to note privatizing HHSC would save nearly $50 million in annual operating costs, and it says work rule changes and the state assuming liability for retiree health benefit costs could reduce HHSC’s annual operating costs by an another $31 million.
Speaker Calls for Action
In the five years since the Stroudwater Report, legislative efforts to authorize HHSC management to negotiate partnership agreements with privately run nonprofit hospital chains have come up short. With his island’s main hospital on the line, House Speaker Joe Souki (D-Maui) has asked for an emergency Special Session to respond to the HHSC crisis.
The next regular session of the Hawaii legislature does not begin until January.
Andrew Walden ([email protected]) writes at Hawaii Free Press, where an earlier version of this article first appeared. Reprinted with permission.