Hawaii Medical Center Hospitals to close

Community leaders were working Friday on plans to revive the Hawaii Medical Center hospitals in Liliha and Ewa after the owners said they will shutter the bankrupt facilities within three weeks.

Closing the former St. Francis medical centers, which date back to the 1920s, will leave 990 workers unemployed and eliminate more than 340 hospital beds.

The loss will be felt throughout the health community. HMC provides critical dialysis services to a significant portion of Oahu's renal patients and operates the only organ transplant center in the Pacific. The Ewa facility is the only full-service emergency hospital in West Oahu. The 150 patients in the two hospitals will have to be moved or discharged.

To prevent a public health emergency, the state administration is hopeful that buyers can be found to operate one or both of the facilities.

The situation appears dire for HMC's employees since many Oahu health care facilities won't likely be able to absorb the significant number of workers who will be left without jobs.

"I don't think there's any one health system here that could absorb all those workers," said HPH spokeswoman Shawn Nakamoto.

HMC had a brief glimmer of hope in recent weeks that it could stave off a shutdown when an affiliate of California-based Prime Healthcare Services offered to pay a minimum of $25 million for the facilities. However, the deal fell apart this week because St. Francis, the former owner of the hospitals which is owed $39 million by the current owner, objected to the offer, according to Prime. Prime's offer would have paid the Catholic religious order $11.3 million.

"The problem here was that St. Francis basically conveyed that they wouldn't support a sale unless we paid (them) off," said Prime's attorney Mark Bradshaw. "It's clearly about money for St. Francis. Given that the hospitals are not worth $40 million, it didn't make sense for anybody. We were basically discouraged from bidding."

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[1/5/12] Hawaii Medical Center said today it has closed its Liliha campus, after transferring the last few patients to area hospitals and long-term care facilities late Wednesday.

"With the cessation of patient care, HMC will lay off a significant majority of its nearly 1,000 employees by this weekend," said Maria Kostylo, HMC's CEO. "Today is a sad day for all of us at Hawaii Medical Center. We've been a part of the community for 85 years, first as St. Francis Medical Center and then as Hawaii Medical Center. Despite our many challenges in recent years, the employees of HMC never wavered in their commitment to provide quality care for patients."

Hawaii Medical Center's Ewa hospital shut down last week after transferring the last of its patients to the Liliha campus. The hospital said it had a difficult time placing its last remaining patients with complex, chronic medical conditions that require long-term care, which is scarce in the community.

HMC's administration and billing departments will remain open as the hospitals wind down business operations.

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House Health Committee lawmakers advanced today two measures intended to help St. Francis Healthcare System of Hawaii reopen the now defunct Hawaii Medical Centers.

The first, House Bill 2345, would provide St. Francis up to $80 million in special-purpose revenue bonds to renovate the HMC-West and HMC-East campuses and "reopen the now-closed hospital in Ewa Beach," said state Rep. Rida Cabanilla (D, Waipahu-Honouliuli-West Loch-Ewa), who introduced the measure.

Meanwhile, the committee passed another measure, House Bill 609, which would allow the public hospital system known as Hawaii Health Systems Corp. to negotiate with St. Francis to operate Liliha's HMC-East facility.

Both bills now head to the House Finance Committee.

The Franciscan sisters sold the hospitals in January 2007 for $68 million to HMC LLC, then a for-profit joint venture between Hawaii Physician Group LLC, composed of 130 local doctors, and Kansas-based Cardiovascular Hospitals of America. St. Francis provided the bulk of the financing for the sale, $40.2 million.

HMC first filed for Chapter 11 bankruptcy protection in August 2008. It emerged in August 2010 and became a nonprofit organization before filing its second bankruptcy in June. HMC began closing the hospitals in December.

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The effort by St. Francis Healthcare System of Hawaii to sell two shuttered medical facilities on Oahu that it recently took back in bankruptcy has attracted an offer from a partnership led by someone very familiar with the properties in Liliha and Ewa.

Eugene Tiwanak, a former St. Francis official, is leading a bid to buy the two former Hawaii Medical Center hospitals in partnership with a San Francisco-based physicians group, Hampton Health Ltd.

Tiwanak’s group hand-delivered a letter of intent Tuesday to St. Francis, offering to buy and reopen both facilities. A proposed purchase price was included but isn’t being made public. The partnership said it has necessary financing from investors to complete the acquisition.

The offer follows an expression of intent announced last week by the parent company of The Queen’s Medical Center to explore the feasibility of reopening the Ewa hospital.

Separately, the state’s Hawaii Health Systems Corp. won legislative approval earlier this month to buy the Liliha facility, though there haven’t been discussions with St. Francis and no funds were appropriated for such an acquisition.