State Begins Negotiations with Kaiser for Maui Hospital Partnership

Kaiser on Maui, photo by Wendy Osher.

The state began negotiations today with Kaiser Permanente Hawai‘i, as they discuss a planned partnership for the operation of the Hawai‘i Health Systems Corporation’s Maui Region facilities

The Hawaiʻi Health Systems Corporation announced the selection of Kaiser in September as its choice to operate the Maui Memorial Medical Center, Kula Hospital and the Lāna‘i Community Hospital.

In May Kaiser Permanente expressed interest in participating in the process for selection as Maui Memorial Medical Center sought a management company for a public private partnership.

A bill aimed at setting the groundwork for a public-private partnership passed into law this past legislative session as the hospital administration sought protections from potential job and service cuts due to a $28 million budget shortfall.

The Governor’s office today announced that State Comptroller and Director of the Department of Accounting and General Services Doug Murdock will serve as lead negotiator for the state. Others on the state’s negotiating team will include: the governor’s Deputy Chief of Staff Laurel Johnston; Attorney General Doug Chin; Director of Finance Wesley Machida; Director of the Department of Human Resources Development James Nishimoto; as well as HHSC and Maui Regional Healthcare System staff.

“Our negotiating team’s first priority is affordable, accessible health care for the Maui Region. The state will negotiate in good faith to secure the best possible outcome for our citizens and for employees of the facilities involved,” said Gov. David Ige in a press release statement.

The enactment of Act 103 gave the HHSC’s Maui Region facilities authorization to transfer operations to a new entity in order to mitigate future budget shortfalls.

Among those expressing concern with the selection was Lieutenant Governor Shan Tsutsui.  Following the selection of Kaiser last month, Tsutsui issued a statement saying that if the community’s concerns and questions are not adequately addressed, he urged the Governor to consider halting negotiations if necessary, and committing to emergency funds need to keep the hospitals running until a “proper deal” can be negotiated.

According to information released today through the governor’s office, Kaiser Permanente will become the new operator of the Maui Region facilities once negotiations are complete and a definitive agreement is in place.

Under the planned partnership, the Maui Regional System Board will serve as the custodial caretaker of the properties and oversee performance of the terms and conditions of the agreement.”

According to the governor’s office, the state hopes to finalize an agreement by the end of the year.