Major Layoffs Expected at East Hawai’i Hospitals

Seven percent of the total workforce of Hawai’i Health Systems Corporation’s East Hawai’i Region will be laid off, according to an announcement made late Tuesday. This includes employees at Hilo Medical Center, Ka’u Hospital, and Hale Ho’ola Hamakua.

The layoffs follow a projected $7 million deficit in the fiscal year set to begin July 1. HHSC officials say the hospital system, which is state funded, is currently facing an overall $50 million shortfall for fiscal 2016.

“Our budget shortfall will have considerable impact on healthcare facilities in East Hawai’i. Region-wide cost cutting measures have already been implemented and service cutbacks and layoffs are the only remaining options for our financial viability,” said Gary Yoshiyama, East Hawai’i Regional Board Chair. “Many scenarios were carefully weighed in our preparation to maintain essential healthcare services and minimize any potential harm to patients.”

In addition to the 87 employees who will be laid off, HMC, Ka’u Hospital, and Hale Ho’ola Hamakua will see reduction in services. Among the planned closures is Home Care Services, which provides chronic and transitional nursing care to homebound individuals, and one wing of adult inpatient psychiatric care at HMC. Ka’u Hospital, Ho’ola Hamakua, and HMC will also see cuts in the amount of long term care beds available.

“Some healthcare services for our communities will be reduced and disrupted as a result of the planned closures, cutbacks, and staff layoffs,” said Dan Brinkman, Interim East Hawai’i Regional CEO. “As a result of operational efficiencies and cost reductions we’ve already instituted, we are able to complete our current fiscal year intact, but those action are not enough to make up for the coming year’s shortfall. 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. We know our employees and physicians will continue to deliver the high quality patient centered care our community has come to expect.

High costs and lower reimbursement rates incurred are contributing factors to the HHSC East Hawai’i region’s estimated shortfall. HHSC officials say that nearly 75 percent of reimbursements made come from Medicare and Medicaid/Quest, which don’t cover the cost of care.

The hospitals service more than 100,000 people who live in a mostly rural 2,000 square mile area. Many individuals depend on the hospitals as a safety net because they are uninsured and have no other healthcare options.

In 2014 alone, the East Hawai’i region had 49,000 emergency room visits, 39,000 clinic visits, 9,000 admissions and over 1,100 births. The entire East Hawai’i region has a budget of $160 million, $100 million of which is current payroll, making it the Big Island’s second largest employer.