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State subsidy sought to move patients from hospital to Hale Makua

Lo: Spending $2 million per year would yield net savings of nearly $9 million

The House Committee on Health has amended and recommended passage of a bill to provide a state subsidy that would allow Hale Makua Health Services to admit more wait-listed patients who are no longer in need of acute care but are taking up valuable beds at Maui Memorial Medical Center.

As drafted by House Speaker Joe Souki of Wailuku, House Bill 995 would appropriate as much as $4 million over two years to move patients no longer in need of acute care from Maui Memorial to Hale Makua with a cost savings to the state of more than four times the subsidy.

Last week, the Health Committee called for passing the bill on second reading and referred it to the House Finance Committee, inserting an unspecified amount for the appropriation and changing the effective date of the bill from July 1 to that date in 2090 “to encourage further discussion.”

According to the bill, it costs $1,500 per day to care for a wait-listed patient at the 213-bed Maui Memorial, and transferring them to lower-cost, 366-bed Hale Makua would yield a net savings to the state of nearly $9 million per year.

The transfer of hospital operations from the quasi-public Hawaii Health Systems Corp. to Kaiser Permanente later this year would exacerbate the wait-list problem because Kaiser would bring more physicians to the island and create more demand for beds at Maui Memorial, the bill says.

In written testimony in support of the bill, former Maui Memorial chief and current Hale Makua Chief Executive Officer Wesley Lo said demand for beds at Maui Memorial often exceeds capacity, resulting in “backups” in the emergency room.

“Much of the problem with Maui Memorial operating over capacity is related to the high number of patients who are no longer considered ‘acute’ and are no longer in need of acute level of services,” he wrote.

The hospital has from 35 to 40 beds per day taken up by “wait-list” patients, Lo said. The cost ranges from $19.2 million to $21.9 million per year.

Often, there are no beds available for acute-care patients, he said. And that results in patients being held in the emergency room and/or elective surgeries being canceled to reduce demand for hospital beds.

“This domino effect results in delayed care of patients by a hospital providing for the entire island of Maui,” Lo said.

Meanwhile, Kula Hospital is operating near capacity, and for financial reasons it’s most beneficial to have Medicaid-Medicare patients in its beds. The hospital has 113 beds, most of which are for patients needing skilled nursing care or long-term care above the level offered at an assisted-living facility.

Hale Makua has been operating with a census of 80 to 85 percent, with unoccupied nursing-home beds of more than 40 per day, Lo told lawmakers. The facility’s cost per patient is $300 to $500 per day.

According to Hale Mahaolu Executive Director Roy Katsuda, the average Medicaid reimbursement rate is from $220 to $240 per day.

“This bill will provide the ability to mitigate some of the major clinical and financial problems plaguing the health care delivery system in the state,” Katsuda said in written testimony.

Lo broke down Hale Makua’s subsidy request as follows:

• $1 million to allow the facility to admit additional uninsured/underinsured patients and homeless patients, reducing Maui Memorial’s wait list by about 10.

• $500,000 to subsidize the hiring of a Kaiser doctor at Hale Makua, which would result in it being able to admit patients in greater need of nursing care.

• $500,000 to pay for the purchase of specialty equipment, disposable and other items to allow the admission of more patients, such as those in need of bariatric or respiratory care.

Now, the state spends $30 million per year to subsidize Maui Memorial.

“The Legislature believes that one of the best opportunities to reduce the subsidy provided by the state is to facilitate a reduction in wait-listed patients at Maui Memorial,” the House bill says.

As of Wednesday afternoon, the measure had not been scheduled for a hearing before the House Finance Committee.

Two other bills — Senate Bill 277 and its companion, House Bill 709 — also are aimed at reducing wait-listed patients at Maui Memorial by seeking state subsidies.

The Senate bill passed second reading last week and was referred to the Ways and Means Committee. The House bill had yet to be heard in committee.

* Brian Perry can be reached at bperry@mauinews.com.

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