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An effort to transfer two Oahu hospitals to the state Department of Health to help fill the island’s dire need for treatment options for residents suffering from mental health issues and substance abuse is on the brink of failure, with the DOH officials who now say it would be cumbersome and cost too much.
Legislature passed a bill in 2021 requiring Leahi Hospital and Maluhia Nursing Home to be transferred from Hawaii Health Systems Corp. to DOH by the end of 2022, a deadline that was later extended due to the COVID pandemic -19. The legislation was strongly supported by DOH and HHSC’s Oahu Regional Council and the administrators who manage the facilities.
DOH, at the time, told lawmakers the move would help the state deliver more behavioral health services and was a “rare opportunity to add significant value to the quality of life for our residents.” And HHSC’s chief administrative officer for Oahu said Leahi Hospital may be able to treat up to 64 psychiatric patients, freeing up space at Hawaii State Hospital, the state’s only psychiatric hospital, which is overcrowded with patients. ordered by the court. The added space could help DOH provide mental health care to patients not ordered to the hospital by the courts.
But after spending more than $452,000 studying the move, officials from both agencies told lawmakers during budget briefings before the House Finance Committee in recent days that they concluded the move was a bad idea. Executing the move would cost approximately $4.1 million, with ongoing additional costs set at $3.7 million in fiscal 2023 and rising to $6.6 million annually by 2026 , according to a report from the DOH.
The report found that the largest cost would be paying DOH’s new staff to assist with operations.
DOH deputy director of behavioral health Marian Tsuji told the House Finance Committee on Wednesday that in addition to costs, the move would require the transfer of contracts and the need to address regulatory requirements related to psychiatric care.
“I know (that) to house psychiatric and mentally ill or substance abuse patients with skilled nursing facility patients, there are some credential issues, so you really need to have a good strong wall between the two,” she said. “So that was a big concern.”
The HHSC system includes approximately a dozen public hospitals, long-term care facilities, and affiliated clinics in Oahu, Hawaii, and Kauai that provide heavily subsidized “safety net” services in many of the state’s more rural regions.
Tsuji told lawmakers it was cheaper to contract services for the entire system. “HHSC currently achieves economies of scale by executing these contracts statewide,” he said.
Although the move was initially supported by HHSC’s Oahu administration, Chief Executive Officer Linda Rosen told the Honolulu Star-Advertiser that she always believed the move was problematic.
“I happen to think it was pretty apparent that HHSC provides all kinds of services,” he said, pointing to IT, legal, tax and HR support. “Just move nearly 500 employees and all these things to DOH and don’t think there would be a cost…”.
Leahi Hospital, located in Kaimuki, was first opened in 1901 to treat tuberculosis patients and currently provides home care and day health care services for adults. Maluhia, located in the Liliha-Kapalama area, operates a 158-bed nursing and intermediate care facility.
Leahi Hospital in particular has suffered from neglect and parts of the hospital buildings are undergoing repairs. Derek Akiyoshi, HHSC’s Oahu region chief executive, told the House Finance Committee that 75 percent to 80 percent of the two facilities’ usable space was occupied.
DOH now plans to push for a bill this year that repeals the requirement to take over Leahi Hospital and Maluhia.
The department’s stance has annoyed some lawmakers.
“It’s disappointing for me,” said Sen. Joy San Buenaventura, chair of the Senate Health and Human Services Committee. “It seems to me that it signals their lack of commitment to scale up behavioral health treatment, which is badly needed in the state.”
Buenaventura said she is skeptical of the cost argument.
“If we’re really going to be serious about reducing chronic homelessness, then we really need to address behavioral health,” she said. “That to me is why it’s disappointing.”
Rep. Della Au Belatti, chair of the House Committee on Health and Homelessness, told DOH officials during Wednesday’s hearing that she understood their working group had decided the state no longer needed the move. but that the DOH and the Oahu region of the HHSC needed the legislature to pass it.
“What worries me is that there’s this huge need,” she said in reference to behavioral health care.