Administrators of East Hawaii’s health care system said patient care was their No. 1 concern as they weighed cutting employees and services to meet an anticipated $7 million shortfall in the coming fiscal year.
Administrators of East Hawaii’s health care system said patient care was their No. 1 concern as they weighed cutting employees and services to meet an anticipated $7 million shortfall in the coming fiscal year.
Hawaii Health Systems Corp.’s East Hawaii Region announced Tuesday night it would cut multiple services and lay off 87 employees. The cuts will impact Hilo Medical Center, Ka‘u Hospital and Hale Ho‘ola Hamakua.
Statewide, HHSC anticipates a shortfall of $50 million in fiscal year 2016.
“Our budget shortfall will have considerable impact on health care facilities in East Hawaii,” said East Hawaii Regional Board Chairman Gary Yoshiyama. “Regionwide cost-cutting measures have already been implemented, and service cutbacks and layoffs are the only remaining option for our financial viability.”
Closures in East Hawaii will include Home Care Services, which provides home-bound individuals with chronic and transitional nursing care, and one wing of adult inpatient psychiatric care at Hilo Medical Center. The number of long-term care beds at Hilo Medical Center, Hale Ho‘ola Hamakua and Ka‘u Hospital also will be reduced by 20, 12 and three beds, respectively.
Facilities will work to find alternative care for patients affected by the cuts, and all changes could take as long as six months to take effect, said HHSC East Hawaii Region Interim CEO Dan Brinkman.
“While the vast majority of our workers will keep their jobs, it saddens us that very capable people who help care for our community will lose their jobs,” he said. “We know our employees and physicians will continue to deliver the high quality patient-centered care our community has come to expect.”
Brinkman explained that the health system’s board made the decision to cut services and jobs Tuesday, after taking several factors into consideration.
“The first rule was to identify what would cause the least potential harm to patients. We also, everything we looked at, we always analyzed, ‘Is this an essential service that no one else can provide?’ because we don’t want to touch those. Then, we also, obviously, looked at services where we were losing a lot of money,” Brinkman said.
The layoffs mostly will impact employees working in the service areas being cut, Brinkman said, although 18 positions from other areas are included. Twenty-three of the laid-off employees are contract workers.
The interim CEO said affected employees would not all be notified at once, but rather as their services wind down and eventually close. The jobs lost represent about 7 percent of a total workforce of 1,300 in East Hawaii.
The service and employee cuts are anticipated to save the regional facilities $5.5 million in fiscal year 2016, Brinkman said. The remainder of the $7 million shortfall will be made up in revenue increases because of changes to the hospital system’s electronic medical record system and other recent changes.
Brinkman warned before the start of the 2015 legislative session that “catastrophic cuts” were on the horizon if legislators did not appropriate more funds for the struggling health care system.
“We’re worried,” he told the Tribune-Herald in late November. “We have a lot of reason to be concerned for next year. … Right now, we have a plan to get through this year without cuts in services. We’ve figured out how to scrape enough together to keep going. But, we have wrung all the possible efficiencies out of our system. There’s not another thing left to drop.”
HHSC requested $156 million from the Legislature, but only $106 million was appropriated in the state’s general funds budget. Another shortfall of $90 million is anticipated for 2017, when HHSC is scheduled to receive $85 million from the state.
HHSC’s budget woes are the result of higher health care costs and lower reimbursement rates that have collided with a rapidly growing population of more than 100,000 people who live within a mostly rural 2,000-square-mile area, according to a press release issued by the health system Tuesday night.
“The hospitals are the safety net for many in the community who are uninsured and have no other health care options. Approximately 75 percent of the East Hawaii Region’s reimbursements come from Medicare and Medicaid/Quest and they do not cover the cost of care,” the release stated.
Email Colin M. Stewart at cstewart@hawaiitribune-herald.com.