By Patrick Downes
Hawaii Catholic Herald
The sale of Hawaii’s two Catholic hospitals to a group of Hawaii physicians and a mainland-based hospital development company will take place on the first of the year. St. Francis Healthcare System made the announcement Nov. 6.
The State Health Planning and Development Agency (SPHDA) on Nov. 3 gave the green light to the transfer of ownership of St. Francis Medical Centers-Liliha and West to Hawaii Medical Center LLC (HMC), with its approval of HMC’s application for a certificate of need.
HMC, which will pay $67.9 million for the two hospitals, is the joint venture of Hawaii Physician Group LLC and CHA-Hawaii.
In its “decision on merit” approving the application, SPHDA stated that “(1) There is a public need for this proposal; and (2) The cost of the proposal will not be unreasonable in light of the benefits it will provide and its impact on health care costs.”
The state regulates health care providers to ensure accessible, quality care at a reasonable cost.
The transfer of ownership had earlier gained the needed approval of the state attorney general.
Upon examining the certificate of need application and independent financial evaluations of the deal, attorney general Mark Bennett stated in a letter to HMC that he found the acquisition to be “in the public interest, and that fair value is being paid for the assets of St. Francis Medical Centers.”
Hawaii Physician Group was formed earlier this year by approximately 125 local physicians in order to purchase the two medical centers in partnership with CHA.
Founded in 2002, CHA is a Wichita, Kan., company engaged in developing hospital projects in California, Kansas, Louisiana, Indiana and Kentucky, and overseas.
Dr. Danelo Canete is president and CEO of Hawaii Medical Center. Dr. Badr Idbeis is the president and chief executive officer of CHA and the chairman of HMC.
“We are full steam ahead,” Dr. Idbeis said in a news release, Nov. 6. “We hope to start the healing work of HMC on New Year’s Day.”
The two medical centers are part of the St. Francis Healthcare System of Hawaii. With the divestiture of the two acute care facilities, St. Francis will focus on long-term health services, including home care and hospice care for the terminally ill.
Earlier, the Vatican’s Congregation for Institutes of Consecrated Life and for Societies of Apostolic Life gave the sale its approval, required because the medical centers are Catholic institutions.
According to the sale agreement, Hawaii Medical Center will be required to follow the “Ethical and Religious Directives for Catholic Healthcare Services,” the code of ethics all U.S. Catholic hospitals follow.
The Sisters of St. Francis will continue to own and administer the Catholic chapels in both hospitals.
Included in the sale will be joint venture entities providing computed tomography, magnetic resonance imaging, outpatient cardiac catheterization, and outpatient endoscopy services now offered at St. Francis Medical Center.
The new name for St. Francis Medical Center-Liliha will be Hawaii Medical Center East. St. Francis Medical Center-West will be called Hawaii Medical Center West.
The Hawaii Medical Centers, with a combined total of 438 beds, will be Hawaii’s only physician-owned medical centers.