After a 16-month effort and nearly $6 million in state money, Kahuku Hospital will become part of the Hawaii Health Systems Corp. on Friday, ensuring continued critical hospital care for thousands of residents and visitors on the North Shore and Windward Coast.

But completion of the transition, announced yesterday at the state Capitol, is only the first step. Now the state-run facility must decide what its future holds.

The state will acquire the assets of Kahuku Hospital for $2.9 million, allowing it to complete its bankruptcy proceedings and pay off its creditors. The hospital received an additional $3 million to continue operation.

Under the state, the hospital will become Kahuku Medical Center, offering 24-hour limited emergency care, long-term care, pharmacy, X-ray and occupational and physical therapy services. Those are the same services being offered at the time the transfer began.

Hospital employees and area residents are grateful that the state and legislators have worked to save this important resource but they still have concerns about the future.

"I'm relieved, but I'm not," said Sherry Martinez, who rallied with hundreds of other residents to save the hospital. "I'm on pins and needles. I just wish I knew more about (the state's) plans."

Martinez, who runs a food bank on the hospital grounds, said she is especially concerned about the selection of the board that will oversee the hospital operation and wants to make sure community leaders are on the board.

"Those are the people vested in this community," she said. "I would think they would know what the community would want to see. I just want to make sure that gets done."

Thomas Driskill Jr., president and CEO of HHSC, said the next step is to start an analysis of the hospital's operations and the community's needs. The hospital is now serving the community's most needy who have no other options, but it could do more, like provide orthopedic clinics at the hospital, Driskill said.

"That's the direction for Kahuku — small, solid, community-based hospital with an ER to take care of the emergencies and with long-term care capability for the needy families, but some other community-level medical services," he said.

For hospital employees, the transition brings optimism and financial and job security but there is a bit of anxiety, said Sheila Toluta'u, a registered nurse working in the ER.

Employees wonder how management will change and are excited about the possibility of more equipment and doctors, Toluta'u said.

"Kahuku has been so unique," she said. "It's like a family business. We don't want to lose that family feeling. We don't want them to come in and just change us because they're our new employers."

The Kahuku Hospital Board announced in November 2006 that it would close by year's end, blaming years of financial hardship and revenue shortfalls.

That launched the effort to save the hospital, starting at the grassroots level. Ultimately, a bill ushered through the Legislature by Sen. Clayton Hee and Rep. Michael Magaoay called for the state to place the hospital under the state's "safety net" healthcare system.

Eric Beaver, president of the Kahuku Hospital Board, said yesterday that the hospital had been operating under a cloud for 20 years and the transfer to the state system was a last resort. At the time the hospital announced it would close, it was juggling money and not paying its bills, Beaver said.

That was "not fair to our vendors and creditors," Beaver said.

Lance Segawa, the hospital administrator under HHSC, said no changes will be made at the hospital until the analysis is completed. But the medical center will get added support from the corporation with technology, consultation and shared purchasing power.

"It will provide much more intellectual capacity for the hospital from various individuals within the HHSC organization," Segawa said.

Hee and Magaoay attended the press conference that included Dr. Chiyome Fukino, director for the state Department of Health, which oversees HHSC.

Magaoay said last year the community was in a panic and now the hospital is at a new beginning.

"This is one wave I'm glad we rode ... out," he said.

Hee said the hospital will need to assess its services and evaluate the true needs of the community but the hospital will always be needed, especially with more than 700 new homes being proposed there.

"As we move forward in time, the hospital will be a better-used facility because growth is clearly (coming) on the North Shore and the events like surfing, the Polynesian Cultural Center, Brigham Young University will become more frequent users of the facility," Hee said. "It seems to me things will be looking up in the long term."

Reach Eloise Aguiar at eaguiar@honoluluadvertiser.com.