Hawaii's hospitals struggled financially in 2008, rolling up operating losses of $187 million, a new report says.

It was the ninth consecutive year in which costs outstripped payments hospitals received, with projections calling for the losses to continue.

"There have been a lot of challenges and changes," said Terri Fujii, managing partner for Ernst & Young LLP, which looked at financial results for 16 hospitals in conducting the study for the Healthcare Association of Hawaii.

"The industry has always been asked to do more with less and less."

The study found that low reimbursements from government health programs, along with other factors such as a lack of long-term nursing facilities resulting in patients staying in hospitals longer, were at the heart of the losses. The industry has complained for years about Medicare and Medicaid/Quest payments being below the cost of providing care while private insurance payments don't make up for the shortfalls.

The study found that overall government payments in Hawaii cover 88 percent of patient costs while the national average for U.S. hospitals is 115 percent.

The study also said:

• Hawaii hospitals continue to suffer from a shortage of long-term nursing care beds in the state because they have to care for patients who would normally be transfered to these facilities. That results in uncompensated costs for patients on a "wait list" for nursing homes because of the way Medicare and Medicaid payments are structured.

"Wait list is still an issue," Fujii told hospital executives gathered for the Healthcare Association of Hawaii's annual meeting yesterday.

She said costs in excess of payments for wait list patients grew to $72.5 million in 2008 from $62.6 million in 2007.

• The number of wait list patient days increased to 74,464 last year from 65,547 in 2007.

• Charity care and bad debts totaled $131.7 million in 2008, or $8.8 million more than a year earlier.

• The hospital's share of providing medical training at their facilities rose to $42 million from $39 million a year earlier.

• The $187 million operating losses of the hospitals compared with the $212 million operating loss they sustained in 2007. Fujii said there could be a number of reasons for the lower loss last year, including higher reimbursements from private insurers such as Hawaii Medical Service Association, and increased efficiency.

The $187 million total though is "still a significant loss," Fujii said. The $212 million loss for 2007 is also higher than what the organization reported last year. For the current report, Ernst & Young drew numbers from a different database that is thought more accurate than the national one previously used.

The financial data are from the Hawaii Databank through the Hawaii Health Information Corp. and is based on figures provided by the hospitals.

The prior years' data were based on information from the American Hospital Association.

The numbers were reported on an operating basis, meaning they only take into account costs and revenues. Some hospitals may have the benefit of investment income or gifts that will offset some or all of the shortfall.

Fujii said a number of trends suggest the hospital losses will worsen this year and that the continuing losses raise questions about how hospitals can reinvest in their operations if they have red ink on an operating basis.