Gov. David Ige reached into the internal workings of the Legislature on Tuesday to persuade House lawmakers to delay a vote that could have positioned Maui’s state-owned hospitals to be transformed into a private nonprofit entity.
Ige asked that House lawmakers delay a planned final vote on House Bill 1075, which has been strongly opposed by the United Public Workers and the Hawaii Government Employees Association.
Ige said the public worker unions did not ask him to intervene, and said he didn’t discuss the matter with them.
The agreement announced by Ige and lawmakers will allow more time to hash out the details of the proposed privatization of three medical facilities, Ige said.
The Maui Region of Hawaii Health Systems Corp. currently operates the Maui Memorial Medical Center, Kula Hospital & Clinic and Lanai Community Hospital, and has been engaged in a six-month due-diligence process with Hawaii Pacific Health to prepare for a possible takeover.
Hawaii Pacific Health already operates Kapiolani Medical Center for Women & Children, Pali Momi Medical Center, Straub Clinic & Hospital and Wilcox Memorial Hospital on Kauai.
Randy Perreira, executive director of HGEA, said in a written statement Tuesday that the union “continues to have concerns about H.B. 1075, which allows privatization of the state’s safety net hospital system and currently targets the Maui Region.”
“HGEA believes it is bad public policy to privatize the state’s safety net hospital system,” Perreira said. “We continue to call for financial and management audits to improve the system from within.”
But Ige said he requested the delay of the bill only to work with lawmakers to develop a better privatization measure, and said he hopes to create a template that can be applied to the privatization of other state-owned hospitals as well.
“We all agreed — House, Senate leadership and the administration — really agreed that we need to move forward with a new opportunity for public-private partnership in order for us to move our hospitals forward,” Ige said during a news conference at the state Capitol.
When asked how the state will pay the cost of transforming the hospitals, Ige replied that “the bill is really just setting up a framework. Once we establish the framework, then all of those details would follow about additional costs, if there are any.”
The HGEA contends the state will need to pay workers at the state-run hospitals at total of $114 million to cash out their accrued vacation benefits if those facilities are converted from state to private health care facilities.
Ige said he asked House Speaker Joe Souki to delay Tuesday’s scheduled House vote because he had “concerns” about the specifics of the bill the House was poised to approve, but Ige declined to say what those concerns were.
Ige’s director of budget and finance, Wesley Machida, has suggested there be further discussions with lawmakers on a number of issues, including whether the state might be legally obligated to go through a competitive selection process to determine who should take control of the hospitals and operate them.
HGEA, meanwhile, has expressed alarm that the hospital workers lack any job protections, especially after language was removed from the bill that would have prohibited Hawaii Pacific Health from laying off workers for six months.
“We are deeply concerned about what will happen to the approximately 900 HGEA nurses and other staff who work in the Maui region along with several hundred other public workers, if the system is turned over to a private operator,” Perreira said in a written statement.
Souki said he looks forward to working with Ige, and said he is “very happy that the governor is involved, and will be taking a strong leadership role in the pursuance of the transition from government to private nonprofit.”
Senate President Donna Mercado Kim said the bill is important, “and so we want to make sure that we have a bill that we can defend. We want a bill that answers a lot of the issues and the questions, and that’s what we will be working on in conference.”
She added, “We want … to come forward with something quickly, not in the next few weeks, but in the next few days.”
House lawmakers deferred action on HB 1075 for one day Tuesday, and House Democratic Majority Leader Scott Saiki said lawmakers plan to continue to defer the bill on a day-to-day basis. In effect, that means the House can still approve the measure at any time if discussions stall on the hospital privatization effort.
