Lawmakers call special session to address privatization of Maui hospitals

Lawmakers call special session to address privatization of Maui hospitals

HONOLULU (HawaiiNewsNow) - Lawmakers gathered for a rare special session on Tuesday aimed at keeping three Maui county hospitals afloat.

The session came after the governor vetoed a bill he said promised excessive payouts for state employees who work at the three hospitals, which Kaiser Permanente is set to take over from the state.

Lawmakers had the choice to override Ige's veto or work with him on an amendment to change it.

At stake is whether they can keep the privatization deal with Kaiser alive, which most believe is essential to providing health care in Maui county.

The bill was intended to assist state employees who will be affected when Maui Memorial, Kula Hospital and Clinic, and Lanai Community Hospital are taken over by Kaiser. The transfer is scheduled for October 1.

"This is the largest privatization project in modern state history," said House Majority Leader Scott Saiki. "We need to work out the kinks and one of the kinks at this point is how do we transition employees from state service to private service?"

As the bill was written, employees would have been given a choice of early retirement or a severance payment.

According to the governor, the separation benefits that were being offered could have cost the state upwards of $60 million. Ige says the measure also would have had unintended tax status consequences.

"Clearly, jeopardizing the tax status of the pension system is not something we can allow to have happen," said Ige, in explaining his veto.

Senate and House lawmakers gathered for just a few minutes Tuesday morning, before announcing they were breaking for recess until Monday, when they plan to reconvene with an amendment to the bill.

"We're here to work with the House and the governor to ensure that the residents of Maui are not impacted in the delivery of healthcare and services, and to ensure that we treat fairly our employees as the transition goes forward," Senate President Ron Kouchi said.

The governor has a suggested a new draft of his own, which appropriates $25 million from the general fund to pay separation benefits and authorizes affected employees to purchase retirement credits.

"It recognizes that there is a duty, I believe, to provide a fair separation as these employees are leaving state service and it provides a mechanism to fund it," Ige said.

Meanwhile, the governor says he is continuing negotiations with the union that represents affected workers, who are under contract with the state until June 30, 2017. That's nine months after the transition to Kaiser is scheduled to take place.

United Public Workers has filed a federal lawsuit to block the state from privatizing the three Maui County hospitals, arguing that the government can't repeal its contracts. There's no timeline on a decision from the 9th Circuit Court, but the state has to file a joint status report Friday on whether the two sides have made any progress. The transfer can't be completed without court approval.

"I think we all are committed to the same thing," Ige said. "It's really assuring the health and safety of the people on Maui and resolving the transition and lawsuit as quickly as possible."

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