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Gov. Ige approves transfer of Maui hospitals to Kaiser

January 15, 2016 GMT

HONOLULU (AP) — Gov. David Ige has signed off on a transfer agreement allowing Kaiser Permanente Hawaii to control three financially troubled Maui County public hospitals.

Ige said the deal signed Thursday is expected to save the state an estimated $260 million over 10 years. The state heavily subsidizes Maui Memorial Center, Kula Hospital and Lanai Community Hospital, The Honolulu Star-Advertiser reported (http://bit.ly/1Q2f9Ks).

Kaiser, the state’s largest health-maintenance organization, has committed to put $30 million into the hospitals and roughly half the $110 million in capital improvements through 2025. The organization will also spend at least $20 million to upgrade the hospitals’ information technology systems, including medical records.

State officials said they can’t yet put a price tag on the deal because the lease and collective bargaining agreements are still being negotiated.

Kaiser, a health insurer and medical provider, said the three facilities will continue to operate as hospitals for the community and will accept all types of insurance plans, including rival Hawaii Medical Service Association.

The deal is expected to significantly grow Kaiser’s membership, because Maui Memorial is the only acute-care hospital in the region. Kaiser currently has more than 243,000 members in Hawaii, including over 55,000 on Maui.

Ige signed a law last year allowing Hawaii Health Systems Corp., parent company of the Maui hospitals, to transfer its facilities to a new entity amid budget shortfalls that affected services and jobs.

The deal is expected to close on June 30, with Kaiser beginning its operations on July 1.

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Information from: Honolulu Star-Advertiser, http://www.staradvertiser.com