Hawaii Legislature considers privatizing hospitals

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HONOLULU (AP) — The Hawaii Legislature is considering a proposal to allow regional hospitals to be bought by private companies.

The idea has been talked about in the past. Officials at Maui Memorial have talked about privatizing the hospital for years.

But with Banner Health knocking, change could happen sooner rather than later. The Phoenix, Ariz.,-based nonprofit health care organization with 23 hospitals in seven states is interested in running hospitals on Maui and the Big Island.

The Senate Health Committee approved the bill Wednesday, adding several amendments, including one that requires legislative and regional approval of any hospital takeover.

Many residents of the neighboring islands are worried about what privatization would mean given the proposed bill.

Carol Nakahara, a registered nurse at Kona Hospital for 25 years, says she's scared of losing her job.

"If they take over, they will most likely terminate all employees in Kona Hospital, and re-hire only those who pass pre-employment requirements," she wrote in testimony to the Senate health committee this week.

But Maui Sen. Rosalyn Baker said job loss is the opposite of what she expects from the potential shift to private health care.

"I expect there will be more jobs as a result of this because we'll have more resources to do more things on Maui and the Big Island," Baker told The Associated Press.

She says the current health care system is fiscally unsustainable and that allowing Banner Health to take over would not only improve but also expand the care that's available.

The deluge of testimony from Maui and Big Island residents worried about their jobs, along with pressure from union leaders, led the Senate Health Committee to strike language in the bill stating that the hospital's employees will become private if a private company takes over.

But Baker said she thinks the employees may have to become private for the transition to occur.

Senate Health Committee Chairman Josh Green says that although he approved the bill, he still has concerns about the proposal and added language to make sure that the health committee will review it again before it can pass.

"There's an incredible amount of public trust in this issue," said Green, who works as a doctor on the Big Island. "It's big money, it's 4,000 employees and it is the health care of our community."

Green says details still need to be worked out about workers' job security, the breadth of care the company will provide and the size of the government subsidy the company is requesting.

Maui Sen. Gilbert Keith-Agaran says that despite the difficulty of transitioning to a private system, the need to do something to improve health and cut costs is urgent.

Wesley Lo, CEO of Maui Memorial, testified that the hospital lost more than $140 million in 2012. Even with state subsidies, the net loss was almost $70 million.

Lo said he supports the proposal because the hospital has no choice but to seek alternatives to public funding.

The Senate Ways and Means Committee will deliberate the proposal next.

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