Hospitals consider joining forces
By Deborah Adamson
Advertiser Staff Writer
Hawaii Pacific Health and St. Francis Healthcare System are in talks to collaborate on improving the quality of care while lowering medical costs. The two hospitals did not rule out a merger or acquisition.
In a letter to employees dated July 29, Sister Beatrice Tom, chief executive of St. Francis, said that Hawaii Pacific Health approached the hospital to discuss "new opportunities for collaboration."
"We have historically sought partnerships that assist in meeting and expanding health care offerings for Hawai'i's people while reducing the duplication of costly medical services," she wrote.
St. Francis spokeswoman Teri Tanaka said yesterday, "It's too early to speculate. We are always considering opportunities."
Discussions center on joint ventures similar to ones they have had with other medical service providers, Tanaka said.
Hawaii Pacific Health said in a statement yesterday that it is exploring "further synergies" between the two organizations.
"I understand they are talking," said David Sakamoto, administrator of the state Health Planning and Development Agency. "We know that St. Francis has financial difficulties and it's got to be in the center of all this."
His agency would have oversight on certain hospital ventures, as well as mergers or acquisitions.
The agency would assess whether the change would affect how healthcare is accessed and provided in the state.
St. Francis' mission is to provide services to the needy, Sakamoto said. It is the largest kidney dialysis provider in the state.
"We know they want to maintain their identity," Sakamoto said. "I'm not sure anybody can fill that niche."
The Catholic hospital's roots go back to 1883, when Mother Marianne Cope and the Sisters of St. Francis traveled to Hawai'i to care for Hansen's disease patients.
But as healthcare costs escalated, the hospital's mission to the needy contributed to its financial problems.
In April, lawmakers approved $85 million in special-purpose revenue bonds for St. Francis, to be used for construction and improvement projects and to purchase equipment for two medical centers on O'ahu and clinics on the Neighbor Islands.
Sakamoto said that St. Francis' three-year contract with the nurses' union, reached in early 2003, which called for raises and no staff-level reductions, added to its financial burden.
"They have not fully recovered from it," he said.
In December, St. Francis said it would lay off 40 employees as part of a restructuring.
Tom told workers in her letter that despite improvements in operations, the hospital "still has not maintained consistency in achieving financial stability. For this reason, we are forced to intensify our turnaround efforts in patient services consolidation and work force reduction."
Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.
