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The Honolulu Advertiser
Posted on: Saturday, December 16, 2006

State likely to run Kahuku Hospital

By Greg Wiles
Advertiser Staff Writer

Transfer of the 25-bed Kahuku Hospital to state control will require approval from the Legislature for emergency funding.

ADVERTISER LIBRARY PHOTO | May 2005

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A blueprint for having Kahuku Hospital remain open and most likely transferred to state control may be finalized by the end of next week.

Kahuku Hospital's board of directors hope to have a memorandum of understanding completed and signed by the state by the end of Friday. Under it, the state would provide money to help keep the facility open while seeking legislative approval for emergency funding needed to transfer the 25-bed hospital to the state.

"Everybody is trying to find a way to keep the hospital open and keep that service in the community," said Eric Beaver, hospital chairman. "We will definitely have a memorandum of understanding in place by next week and by next Friday have it signed."

The hospital, which has the only emergency room on O'ahu's North Shore, has lost millions of dollars in the past six years and was set to close at the end of this year. The directors and state government have been talking about ways to keep the facility open and had faced a deadline yesterday for signing off on a plan.

Beaver said the directors decided to extend that deadline after meeting with members of Gov. Linda Lingle's administration, state Rep. Michael Magaoay and state Sen. Clayton Hee on Thursday. Also in attendance were representatives of the Hawai'i Health Systems Corp., operator of 12 hospitals for the state, which would take over operation of Kahuku if legislative and other approvals are obtained.

The rough outline of the plan being talked about with the state includes:

  • Lingle releasing the final $500,000 of the $1 million in funding the state gives to Kahuku Hospital annually.

  • Lingle making an emergency funding request that would be submitted to the Legislature to help fund the transfer of the hospital to Hawai'i Health Systems. The request most likely will be one of the first pieces of legislation heard after the session begins Jan. 17, Beaver said.

  • Using the bulk of the emergency funds for legal and other services needed to help Kahuku Hospital file for a Chapter 11 bankruptcy. The hospital would discharge about $3.5 million of debt through the filing.

  • Hawai'i Health Systems taking over Kahuku Hospital as it exits bankruptcy. Hawai'i Health Systems is the fourth-largest public health system in the nation, with 1,270 beds in its facilities.

    Meanwhile, a community group formed to preserve Kahuku Hospital's operations said it will hold a meeting at 7 p.m. Wednesday at Kahuku High School. The Save Kahuku Hospital group said it wants to let lawmakers know the community is behind the board's efforts to keep the facility open.

    Reach Greg Wiles at gwiles@honoluluadvertiser.com.