LAHAINA, Maui — Residual community anger and frustration over a state agency's rejection of a proposed 150-bed hospital in Kihei is fueling Republican Jan Shields' bid to oust Democratic state Sen. Roz Baker from her 5th District seat that comprises South and West Maui.

Shields helped start the Association to Improve Healthcare on Maui in the aftermath of the 2006 denial of Malulani Health & Medical Center's application for a certificate of need from the State Health Planning and Development Agency.

The privately funded $212 million Kihei project would have provided Maui a second full-service hospital in addition to state-subsidized Maui Memorial Medical Center in Wailuku. The SHPDA administrator denied the application even though a Maui-based advisory board, one of three panels to consider the proposal, recommended approval.

The certificate of need process is used to determine whether a new medical service or facility fits within the state's healthcare priorities and ensure it wouldn't undermine the financial stability of existing vital services.

Kihei Community Association president Jon Miller said a forum on the Malulani controversy brought out a record crowd of more than 500 citizens.

"From the community standpoint, there was a lot of frustration about not being able to make our own choices and frustration that a state agency would make the decision even though no one was asking for any public money," Miller said.

"They were telling us, 'We can make a better decision in Honolulu.' There was a feeling the community knows what it wants and we can make the best decisions."

A HOT-BUTTON ISSUE

Shields, 54, is a former Maui Memorial nurse who now works as a healthcare lobbyist, patient advocate and inventor of neonatal products.

She claims the forces that worked to defeat Malulani and eliminate the threat of competition included Maui Memorial and its parent, Hawaii Health Systems Corp.; O'ahu hospitals that profit from treating Maui patients; public employee unions; and the union-backed Baker.

The subject remains a hot-button issue in the 5th District because of what's at stake, Shields said.

"Every time we lose one of our family members because it's eight hours to get to O'ahu, every time someone loses a leg because they don't get vascular surgery in time, every time a doctor moves off island, that wound is ripped open again and the anger is toward Roz Baker and toward government," she said.

Baker, 62, bristles at the "misinformation" and "outright lies" she says her opponent is spreading about the incumbent's role in the matter. "I did not have anything to do with them making that decision. The decision rested with the administrator of SHPDA, who was an appointee of the governor," she said.

Baker said she had reservations about the proposal and was unable to provide "wholehearted" support for Malulani during SPHDA hearings. The lawmaker feels that Malulani officials did not offer enough evidence to support their application and could have pushed harder to revive the project once it was rejected.

"I felt like (Malulani) needed to answer questions about how it's going to impact the community. We need to be raising healthcare up for everybody and not trying to diminish the services that we have. I strongly support a West Maui critical-care facility because it's going to add healthcare services and not try to detract from existing services," she said.

After Malulani was rejected by SHPDA, Baker said she arranged for a facilitator to bring Maui Memorial, HHSC and Malulani officials together to talk about collaborating on a new facility that would complement the existing 231-bed hospital. She said the talks fell apart after Malulani's principal financial backer, Triad Hospitals Inc., was purchased by Community Health Systems.

Shields said the best way to avoid a similar fiasco is to abolish the certificate of need process, which she said has been wielded to crush competition, lowering the quality of health- care available in Hawai'i and increasing costs.

Shields also favors dismantling SHPDA. "The 'D' is for development but it's done nothing but obstruct," she said.

That and selling Maui Memorial and other HHSC hospitals would improve healthcare and the state's bottom line, according to the candidate. The system is facing a $62 million deficit and must support a costly hierarchy of hospital administrators and HHSC executives, Shields said.

"If we sold them for a dollar we'd make money," she said.

Through AIHM, Shields said she is working to identify parties interested in building a hospital in South Maui that would replace Maui Memorial's aged facility. If a new hospital is built, the old one could be used for long-term care, a rehabilitation facility or similar purposes, she said.

Shields readily admits that abolishing the certificate of need process "is my No. 1 thing," but denies she's a one-issue candidate. She said she also would work on changing liability law to reducing malpractice insurance costs for physicians; creating a more friendly climate for small businesses; and education.

Unlike her opponent, Shields favors local school boards.

Baker said local boards make no sense without the power to control revenues and would only add another layer of bureaucracy to the education system.

"Learning happens in the classroom with teachers and aides and materials, not with governance," she said.

Among her achievements, the veteran lawmaker lists her support for $20 million to build a high school in Kihei and legislation that made it easier for the Department of Education to partner with private developers on school projects. She said she also helped secure $13 million for a new cafeteria at Lahainaluna High School.

BAKER TOUTS RECORD

On a statewide level, Baker was the prime sponsor of landmark legislation establishing smoke-free workplaces and public places, and also authored a 2006 increase in the cigarette tax that earmarked the additional revenue for cancer research, a statewide trauma system and other healthcare purposes.

Baker said her big-picture contributions in the healthcare arena have been overlooked in the controversy over Malulani. Also overlooked, she said, have been new fixed-wing and helicopter ambulance services for Maui and recent improvements at Maui Memorial Medical Center, such as construction of a $46 million wing and an expanded cardiovascular intervention program.

"My opponent has marginalized it because the one thing she wants the most hasn't been achieved. If you look at the overall record, I've done as much as anyone to try to move education and healthcare forward in the state," she said.

Baker feels that the certificate of need process is necessary but agrees there is room for reform, such as raising the dollar threshold for projects required to seek approval, and taking decision-making out of the hands of a single individual.

"I think it's important to be able to know what kind of services are coming into a community and to have the opportunity for the community to respond to it," she said. "I'm not wedded to the current process, but I haven't seen anyone come up and suggest something else."

In response to the Malulani situation, the Legislature last year required that all hearings and meetings on a proposal be held on the island for which the project is proposed. The same legislation created a task force to update the Hawai'i Health Performance Plan that contains the standards used to evaluate certificate of need applications, and streamlined the process for applicants who meet the standards.

"One of the good things that came out of (the Malulani debate) is that everyone is focusing on how we can improve our health care," Baker said. "It's not just one approach, it's a whole range of things that will get us to where we need to be. I've always believed that collaborative, positive energy is more valuable than all of the negativity."