Maui's only acute care hospital and two other state-owned medical facilities could be privatized under a bill given final approval by state lawmakers.
The legislation passed Friday clears the way for a possible takeover of Maui Memorial Medical Center by the nonprofit Hawaii Pacific Health or another operator, the Honolulu Star-Advertiser reported.
Maui region managers of the state's public hospital network have been discussing a possible takeover with Hawaii Pacific Health for about six months. But the bill requires that other Hawaii hospital operators also be allowed to compete for the opportunity to operate the Maui facilities.
The bill tasks Gov. David Ige with leading negotiations for the transition. The measure would cover Maui Memorial, Kula Hospital & Clinic and Lanai Community Hospital.
Last month, Ige intervened to delay a vote on the hospital privatization bill, House Bill 1075, which has been strongly opposed by the United Public Workers and the Hawaii Government Employees Association. Ige then proposed a revised draft of the bill, which lawmakers adopted Friday.
Randy Perreira, executive director of the government employees group, said some of the union's immediate concerns were addressed in the new bill. But he said that "we still don't believe it is appropriate to be selling off public services."
The Hawaii Government Employees Association has about 800 union members among the Maui Memorial employees and an additional 50 at the Kula facility.
The bill guarantees there will be no employee layoffs for six months after any takeover, and Perreira said it "will ensure that the governor's office and not partisan people from Maui . will be driving the conversation about if and how we move forward."
Assuming the process moves ahead, Perreira predicted lawmakers next year will suffer from "sticker shock" when they get a bill for the cost of the Maui privatization effort.
To move the Maui hospital employees into private-sector jobs, the union believes the state must pay $114 million to cash out the employees' accrued leave benefits and compensatory time, and hundreds of millions of dollars more in pension and retirement medical costs. The entire package could cost the state $320 million, Perreira said.
"I don't know where the state is going to find $320 million in its budget to do this or practically anything else, frankly," he said.
The Maui region of the Hawaii Health Systems Corp. faces a $28 million deficit in the upcoming year. Region CEO Wesley Lo warned it might need to lay off staff and cut services if privatization isn't authorized.
The state now pays about $100 million per year to support the public hospital network that includes the Maui facilities, and lawmakers want to reduce those costs.
Hawaii Pacific Health already operates Kapiolani Medical Center for Women & Children, Pali Momi Medical Center, Straub Clinic & Hospital and Wilcox Memorial Hospital on Kauai.
