Kahuku Hospital rescued

By Eloise Aguiar
Advertiser Windward O'ahu Writer

KAHUKU — A new federal designation for Kahuku Hospital will give the financially struggling facility a boost that could end its losses in one year.

The 53-year-old hospital recently became a critical access hospital, a designation granted to small rural facilities to save them from bankruptcy, according to Don Olden, the hospital's acting chief executive officer. The designation allows the hospital to receive greater reimbursement from Medicare for acute care and skilled nurse acute care, he said.

Six hospitals in Hawai'i are critical access hospitals. The qualifications include having 25 or fewer beds, not having more than 15 acute care patients at a time whose average stay is less than 96 hours and being in an area that doesn't have nearby hospitals.

The designation means the 25-bed Kahuku Hospital will receive about $600,000 more a year for the same acute care patient load, which will go a long way toward ending the hospital losses that have amounted to about $500,000 a year, said Olden.

"It's a godsend for the hospital," said Olden, who previously was chief financial officer at St. Francis Healthcare System of Hawai'i and became involved at Kahuku on a volunteer basis.

Under the previous system, acute care service was reimbursed at $1,200 per patient day, he said. Now the hospital will receive $1,790 a day. For skilled nurse acute care the hospital will receive $1,400 a day as opposed to $200.

Kahuku Hospital has steadily improved its financial health since 1998 when it was losing almost $2 million a year and was considering shutting down obstetric services, said Rick Spencer, hospital board chairman.

The hospital still relies heavily on state financing, grants and private donations, Spencer said. Receiving the critical access designation means the hospital can charge what it actually cost to treat a Medicare patient.

"That will help us add to the bottom line to cut that $500,000 to about zero," he said, adding that new patients cared for by a string of new doctors in the community also have added to the hospital's revenue.

With revenues improving and the hiring of a new CEO, the hospital also is planning a fund-raising campaign to improve the facility and services, he said.

"For the first time in many years it looks like there's a light at the end of the tunnel and it's not a train," said Spencer, who has served on the board for about 10 years.

Reach Eloise Aguiar at eaguiar@honoluluadvertiser.com or 234-5266.