The state Senate Health and Ways and Means committees Friday approved $7.3 million in emergency funding to sustain two rural Kauai hospitals through next spring.
House lawmakers passed House Bill 3 earlier in the week, increasing the appropriation to $7.3 million from $2.5 million after Hawaii Health Systems Corp. officials testified that more money is needed for services on Kauai.
The bill, unamended by senators, now goes before the full Senate for final approval. The appropriation is one of a handful of issues being taken up by lawmakers during a special legislative session called by the governor over gay marriage.
Alice Hall, acting president and chief executive officer of the system, told lawmakers in a hearing on the Kauai bill Friday that the money would help pay back a $2 million loan from the Maui region and more than $2 million in systemwide obligations owed to the corporate office.
"All of the hospitals are having financial problems, but this happens to be hitting Kauai the most at this point," Hall said. "We don’t have the cash on hand; we have less than a month’s cash on hand at any one time, whereas most hospitals have six months’ cash on hand across the nation."
The funds will also help reduce accounts payable to 30 days from more than 110 days, according to testimony from the Kauai regional board of directors. David Peters, chairman of the board, called the appropriation a blessing and said the board wasn’t sure what it would have done without it.
"Vendors, our payables, would go even higher than where they are now, and people wouldn’t be being paid," he said. "If we tried to cut services out, we’d have to go out to the community and have meetings and hearings to be able to do that, so I really don’t know what would have happened."
The system’s Kauai region operates Samuel Mahelona Memorial Hospital, which houses the only inpatient psychiatric unit on the island; Kauai Veterans Memorial Hospital; and three physician clinics in Waimea, Kalaheo and Port Allen.
The two hospitals in need of emergency funding are Mahelona and Kauai Veterans Memorial.
"We’re extremely grateful to the Legislature and appreciate the fact that they understand the importance of these rural hospitals to our neighbor island citizens," Hall said. "They provide a safety net service that the people would not be getting if it wasn’t for these state-assisted facilities."
Before going to the Legislature during the special session, the board in a move of desperation requested a $9 million loan from the state Department of Budget and Finance.
Hall told lawmakers the $7.3 million would carry the hospitals into the spring, at which time the system will ask the Legislature for systemwide emergency appropriations.
Sen. Sam Slom (R, Diamond Head-Kahala-Hawaii Kai), the lone committee member to vote no on the bill, said continuous requests for money from the system are concerning and that more needs to be done to fix the situation.
"These are fundamental problems that have to be solved, they have to be resolved, and if they are not the taxpayers are going to be bled dry," Slom said. "The idea of cutting things is painful for everybody, it’s painful for every individual in this community, but we’ve done it."
Lawmakers hinted in the hearing that private-public partnerships will likely be discussed again in the coming session as a way to keep the hospital system afloat.
Sen. Josh Green (D, Naalehu-Kailua-Kona), chairman of the Health Committee, said he asked board and union leadership to work across the table "to bring us a consensus together so it’s not quite as contentious as it was in previous sessions."
"That process seems to be yielding some good work," he said.
Legislation discussed in the 2013 session that would have enabled the privatization of eight struggling public hospitals was gutted and replaced with a request for a task force to again study the feasibility of a public-private partnership for the system.
A 2009 legislative study recommended a public-private partnership be forged within two to three years.
