Hawaii Pacific Health, owner of Kapiolani and Straub hospitals, is among several potential buyers for all or parts of the bankrupt Hawaii Medical Center, owner of HMC-East in Liliha and HMC-West in Ewa.
Hawaii Pacific Health singled out its interest in HMC’s newer Ewa hospital, which opened in 1990.
"If an opportunity presents itself for us to extend our proven care model further west and does not jeopardize hospital operations at our affiliate hospitals, we will certainly give it considerable thought," said Hawaii Pacific Health spokeswoman Shawn Nakamoto, in an email Thursday.
HMC is in talks with several other potential buyers, said HMC spokeswoman Kris Tanahara, but declined to identify them.
If no buyer steps forward, HMC could be forced to close and lay off its 990 employees.
"In the event we are unable to find a new buyer, Hawaii Medical Center will take the necessary steps to ensure an orderly wind-down and the safe transfer of patients to other medical facilities on the island," said CEO Maria Kostylo, in a statement Wednesday.
The 240-bed HMC-East in Liliha had about 30 patients, and the 102-bed HMC West in Ewa had 60, as of last week. That was when the St. Francis Healthcare System of Hawaii, the facilities’ former owner, said it was pulling out of a bankruptcy reorganization plan, making it more likely that HMC might be forced to close.
HAWAII MEDICAL CENTER FACTS
» Hawaii Medical Center-East opened in 1927 in Liliha.
» Hawaii Medical Center-West opened in 1990 in Ewa Beach.
» Last sold: January 2007
» First bankruptcy: August 2008
» Emerged from bankruptcy: August 2010
» Entered bankruptcy again: June 2011
» Specialties: Renal services, organ transplants, skilled nursing
|
"If there were a closure, it wouldn’t just affect HPH hospital. It would affect all the hospitals on Oahu," Hawaii Pacific Health’s Nakamoto said.
The Queen’s Medical Center and Kaiser Permanente Hawaii bid for the Liliha and Ewa hospitals in 2005.
When asked whether they are exploring a purchase now, Queen’s officials said they are monitoring the bankruptcy and take the "situation very seriously."
A Kaiser spokeswoman said she wasn’t able to reach executives for comment.
A bankruptcy hearing is scheduled for Monday. While that is not a deadline for a sale, HMC is aggressively pursuing buyers.
So far Hawaii Pacific Health is the only one to acknowledge an interest in buying, and that is only for the Ewa hospital. The company•made no mention Thursday of the aging Liliha facility.
The Liliha hospital opened in 1927 and historically has had a higher number of indigent and uninsured.
The newer HMC-West has been attractive because of its population mix of privately insured patients who balanced patients in lower-paying Medicaid and Medicare programs, said cardiologist Danelo Canete, HMC’s former CEO.
In addition, there are no other West Oahu hospitals to compete with, unlike Liliha, which is within a few miles of Oahu’s major medical facilities. The new Ewa facility also has significantly less deferred maintenance than Liliha.
The Liliha hospital has a larger population of seniors on Medicare and Medicaid and patients with kidney disease who "stay in the hospital forever," Canete said. "You can’t discharge them, because they develop a lot of complications."
Canete said his group of cardiologists — Hawaii Cardiology LLC — who primarily work at HMC is already scheduling procedures elsewhere, such as at Castle Medical Center, Kuakini Health System and Queen’s.
"We’re preparing for the worst-case scenario," he said.
HMC was formed when St. Francis sold the two medical centers in January 2007 for $68 million to HMC LLC, a joint venture of Hawaii Physician Group LLC, comprising local doctors, and Kansas-based Cardiovascular Hospitals of America.
St. Francis provided the bulk of the financing for the sale — $40.2 million — and remains HMC’s main creditor.
At the time, St. Francis required a packaged deal for both hospitals as well as a pledge to continue the Franciscan sisters’ commitment to treat the aged and poor — a promise that in the end wasn’t financially viable.
HMC filed for Chapter 11 bankruptcy protection in August 2008. It emerged in August 2010 and filed again in June.