Closing the only hospital on the North Shore could mean that 4,300 emergency room visitors, 1,560 expectant mothers and 6,570 patients a year would have to find another facility to obtain the services they need.

The private, nonprofit hospital has suffered financially for more than a decade, managing to stay afloat with the help of donors and an ability to nurse its equipment into longer life.

But the hospital has experienced a downward spiral in the past five years, with malpractice insurance costs increasing from $70,000 a year in 2002 to $456,000, and debt of $2 million.

Half the debt is owed to the IRS because payroll taxes were withheld but not paid to the government by a former administrator. Another issue weighing heavily is reduced reimbursement from medical insurance companies.

Kahuku Hospital, which opened in 1929 and now serves 6,570 patients a year, has suffered financially for more than a decade. Bruce Asato • The Honolulu Advertiser

Kahuku's patients claim it's the best hospital on the island. Its doctors worry the community will suffer should the hospital close.

"We have people come in all the time that if this hospital weren't here, they would be dead," said Dr. Richard Price, the emergency room director at Kahuku. "Children with severe asthma, people with severe respiratory distress, heart attacks. I have personally saved lives of people in this community."

Price was on duty on Mother's Day 1999, when a massive rock slide in the mountains surrounding Sacred Falls killed eight people and injured 50 others. Some 14 people were treated at Kahuku, and Price said much of the work done in the ER was to comfort people who lost loved ones.

On another occasion some 20 people showed up at the hospital with cases of food poisoning, he said. He has also delivered babies in emergency.

"We're the safety net for people," Price said.

Hospital earns praise

Paul Bursey, left, Kahuku Hospital's director of nursing, meets with nurses Debra Parr, second from left, and Dana Hackman, wearing cap, and staff development coordinator Ella Siroskey at the second-floor nurse's station. Bruce Asato • The Honolulu Advertiser

Bright and airy, the hospital sits on the edge of Kahuku town on a rise that overlooks a field of bananas and the ocean. Patients in wheelchairs enjoy the cool breeze and warm sun under a huge covered lanai at the entrance to the building.

Hoku, a service dog, roams the hospital with the respiratory therapist, Hannah Joachim, as she tends to her patients. Patients call out his name and reach down to pet him, bringing a smile to their faces.

David Kaaihui, 55, a quadriplegic and patient at the hospital for 15 years, paints canvases by holding a paintbrush in his mouth.

Some patients there last week were unaware of the struggles the hospital is experiencing, praising the care and service they were receiving, including all-private rooms.

Dr. Neil Thomas Katz, an orthopedic surgeon, looks at the arm of Nicholas Lobdell, 14, of Sunset Beach, who broke his elbow April 9 while skateboarding. Katz advised Nicholas of rehabilitative exercises he should be doing. Bruce Asato • The Honolulu Advertiser

"The other hospital, they no good," Pila said. "They mean."

The good service has a lot to do with the fact that there are too few patients in the hospital for the number of staff, said Don Olden, hospital CEO. In the wards, nurses aren't fully engaged caring for 17 to 18 people a day.

The ER, which has one nurse and one doctor on duty 24 hours a day, sees about 12 people a day and that means the nurse spends about two hours for each patient, Olden said. If the number of visitors doubled, the ER could support itself, he said, adding that the same would be true for the wards if the patients increased slightly.

Insurance costs rise

Charles Pila pets Hoku, a service dog who visits the hospital regularly to help cheer up patients. Pila, 41, who had surgery to remove several toes on his right foot because of complications from diabetes, is impressed with the hospital's food and nursing staff. Bruce Asato • The Honolulu Advertiser

"We provide the service and will average 75 days before we get paid," he said, adding that in turn the hospital delays payments to its doctors and suppliers.

The money from the state will help, Olden said. In the past three years the hospital has received an increasing amount of state support that gets it closer to parity with the support the state gives to other rural hospitals in Hawai'i. The other rural hospitals that are part of the state hospital system are getting more than 50 percent of their operating revenue from the state. With the $1 million, the private Kahuku would get about 15 percent.

Kahuku Hospital staffer Virgie Garo helps Leland Cartwright get back to his room. Patients say Kahuku is the best hospital on the island. Bruce Asato • The Honolulu Advertiser

The state has come to the rescue and the hospital is grateful, he said. But now it's time for the board to make some hard decisions because no one wants to help until the hospital becomes more self-sustaining, Beaver said.

"We'll look at each service we offer and ask if we can continue to offer that service," he said. "Certainly if it's not contributing, we'd consider terminating that service to get things to balance."

The community feels strongly that emergency room service is greatly needed, Beaver said, even though it's losing money. He said the ER service might become more cost efficient by cutting the hours it's available.