Financial difficulties are forcing St. Francis Healthcare to change the way it carries out Christ’s healing ministry

By Patrick Downes

St. Francis Healthcare System of Hawaii is reassessing the way it performs its Christian mission. Escalating costs and changes in the national health care industry have made it increasingly more difficult to carry out “the healing ministry of Jesus Christ” especially in the area of acute care, said its chief executive officer, Sister of St. Francis Beatrice Tom.

At the same time, St. Francis hears a special calling in the care of the elderly and dying, a growing area of need where Hawaii’s sole Catholic health care system has long been an advocate and a pioneer, Sister Beatrice said.

And so, while St. Francis is constructing its innovative Residential Care Community in Ewa, it is also now looking for outside assistance to help it preserve Catholic acute care in Hawaii.

Sister Beatrice and Eugene Tiwanak, president of the St. Francis Healthcare Foundation discussed the future of the health care mission of Hawaii’s Sisters of St. Francis with the Hawaii Catholic Herald, Feb. 4, at Sister Beatrice’s office in Liliha.

The Sisters of St. Francis are the sponsors of St. Francis Healthcare System of Hawaii and its entities.

The future will involve new, and perhaps not yet discerned, ways of remaining true to Christ’s healing ministry, said Sister Beatrice.

An avenue now being seriously considered is a collaboration between St. Francis’ acute care services — now provided by St. Francis Medical Center in Liliha and St. Francis Medical Center-West in Ewa — and one or more of Hawaii’s other health care systems.

St. Francis is also eager to advance and expand the myriad of services offered by the existing St. Francis Community Health Services (CHS) and the future Residential Care Community.

“CHS houses all our outreach services and services the elderly” including homecare and hospice, Sister Beatrice said. “We will still be able to help people who are sick, especially those who are dying.”

Regarding acute care, St. Francis is now in negotiations with three Hawaii-based medical systems. According to Tiwanak, St. Francis is seeking an arrangement in which it can continue Catholic health care in Hawaii, while obtaining relief from its financial burdens, by transferring some or all of its hospital operations to another health care provider.

He said the agreement would most likely involve a management contract, a lease arrangement, a merger or the outright selling of assets, or a combination of the above.

The announcement of an agreement is expected soon, but the actual move to a new operation would take two to four years to accomplish. A transfer will be complicated by St. Francis Healthcare System’s joint ventures, its real estate and government regulations, Tiwanak said.

The Liliha and Ewa medical centers are the largest of St. Francis Healthcare System’s seven subsidiaries.

Sister Beatrice said that her primary conditions of any agreement would be that “the Sisters (of St. Francis) get a just settlement, that Catholic health care continue and that the poor are cared after.”

“Those are my wishes,” she said.

Maintaining Catholic health care

If the medical centers come under a new administration, they would not be considered officially “Catholic,” the Sister Beatrice said. However, she is seeking an agreement that assures the preservation of Catholic values.

“We are not exactly sure what the future arrangement will look like,” the Franciscan Sister said.

“Whether they just come in and buy everything outright or whether or not we keep the land, we are trying to keep the ethical and religious directives which represent Catholic health care,” she said.

Tiwanak said that such a requirement is not unusual elsewhere and has been received positively in discussions here.

Some of those with whom St. Francis is negotiating have said that they would want to “maintain the St. Francis culture because it serves the community,” he said.

“They recognize the value of St. Francis being beyond brick and mortar,” Tiwanak said. “It’s the culture of care that has been our hallmark.”

He said St. Francis could secure such an agreement, for example, if the land were leased. “We would lock it into the lease agreement,” he said.

He said that the “greatest harm that could happen” in the transition to a new arrangement would be that “it can damage the existing morale and culture of the institution as well as its place in the community.”

St. Francis Healthcare had initially tried keep the hospitals under complete Catholic control by calling on the Oregon-based Sisters of Providence health care system, which has hospitals in Oregon, California, Washington and Alaska.

However, Providence thought any acquisition would involve “too much risk,” Sister Beatrice said, because of what it thought was a large number of hospitals for Oahu.

“They wanted to expand, but they felt the area too well saturated,” she said.

Spiraling medical costs

The final decision to change the approach to acute care was made in a Jan. 25 meeting of the St. Francis board of directors, whose mainland members were in Hawaii for the exhumation of Mother Marianne Cope.

Faced with new timetable demands from FSA (Financial Securities Assurance), the Healthcare System’s bond insurers, and a future that promised increasingly higher financial hurdles, the board made the difficult decision.

St. Francis had been making all the loan payments on its $30 million debt, Sister Beatrice said, however it has not been meeting its “debt-ratio requirement” — the level of income that FSA requires. FSA is therefore requiring that the Liliha and Ewa medical centers consider a sale or merger, she said.

The CEO ran down a list of about a dozen financial challenges that brought St. Francis to this point and that continue to loom on the horizon. They included reduced government Medicare and Medicaid payments required by the Balanced Budget Act of 1997, new government requirements to create electronic medical records, staffing shortages, a lack of admissions, new technology requirements, union negotiations and needed capitol improvements.

The medical centers’ serious money problems began around the year 2000, a short time after the Balanced Budget Act began to cut back on its Medicare and Medicaid payments.

Medicare is the federal health insurance program for people age 65 and older, the disabled, and people with end-stage renal disease.

Medicaid is a joint federal and state program that helps pay medical costs for certain low- and moderate-income individuals and families.

St. Francis being a “safety-net” medical system, Medicare and Medicaid patients account for about 70 percent of the people it serves, Tiwanak said.

The medical centers also have yet to recover from the seven-week nurses’ strike of two years ago. The strike not only cost the hospitals more than $4 million at the time, it has taken two years to rebuild the employee base and the physician network..

As a result, said Sister Beatrice, the 188-bed Liliha hospital has had to close two floors resulting in an occupancy rate of 55 percent.

Tiwanak included the high cost of renal care, including kidney dialysis of which St. Francis is Hawaii’s leader, as adding to the financial difficulties. Because of all the complications associated with kidney failure, “it’s almost twice as expensive to care for renal patients in a skilled nursing facility,” he said.

“Thirty percent of our business is in renal dialysis,” Tiwanak said.

Sister Beatrice compared the last few years to being on a financial “roller-coaster.”

“We’re up, we’re down, and it has taken a horrible toll on the system and the people here,” she said.

“So for that reason and all the other reasons, it becomes apparent that this is not where we need to be,” she said.

“I am a religious and my focus is supposed to be caring for the sick,” she said. “(However) I don’t care for the sick; I am trying to run a business.”

In this business, she said, “you’re trying to compete, you’re trying to pay for this and pay for that. I don’t really feel that that’s our mission.”

Another factor

Another factor in the decision to leave acute care, Sister Beatrice said, was simply the lack of Sisters of St. Francis to carry the medical centers into the future.

“There aren’t sisters,” she said. “My order doesn’t have anyone really prepared to follow me right now.”

She said that 18 sisters are affiliated with the Healthcare System now, mostly as board member and volunteers.

But there was a time when many, if not most, of the nurses, technicians and pharmacists were Sisters of St. Francis. Today only one sister works as a nurse, though not in acute care but in the hospice program.

Sister Beatrice said that, for the sisters she worked with, the news they were leaving was hard to take.

“They were a little sad,” she said. “They have been here a long time. Some of them have grown up here.”

“But what I have to do is bring them back in and talk about what can we do about the future. That would be focusing on long-term care,” she said.

Sister Patricia Burkhard, the general minister of the Sisters of St. Francis, and Sister Grace Anne Dillenschneider, the chairperson of the St. Francis Healthcare System, wrote a letter dated Feb. 14 to the members of their congregation to explain the situation.

“In reaching this decision, we have given priority to our mission as Sisters of St. Francis in Hawaii,” they said.

Return to original mission

The Sisters of St. Francis consider their move toward long-term care as both a return to their original mission and the pioneering of new ground.

Mother Marianne Cope’s original assignment was to care for the victims of leprosy or Hansen’s disease, Sister Beatrice said. “That’s long-term care; that’s care of the dying.”

“And that is where the population of Honolulu is going,” she said, “long-term care and community outreach.”

“It is not glamorous medicine; it is taking care of people, the elderly,” she said.

St. Francis was the first in Hawaii with hospice and the first with home care. It recently initiated the concept of residential care communities for senior citizens.

The health care system broke ground over a year ago in Ewa, near Immaculate Conception Church, for the St. Francis Residential Care Community, 300 low-rise independent living rental apartments for low-to-moderate income elderly in an open-air village.

Construction will begin next year and the first 100 units will be available in 2007. The remaining 200 units to be completed by 2010.

The residents will be offered the services they need at various levels of aging, so that they can live at home for as long as possible.

These services include help with chores, exercise, transportation, shopping, taking medication, managing finances and bathing.

“What we are going to focus on, nobody has really focused on,” Sister Beatrice said. “It is a different kind of long term care.”

The beginnings of St. Francis

Ministry to the poor was the mission of St Francis Hospital from the very beginning. It began in 1924, when a survey of island doctors determined that Oahu needed a hospital willing to treat the poor.

Honolulu already had Queen’s, Kapiolani and Kuakini medical centers.

The Honolulu community turned to the Franciscan Sisters who had gained a reputation for their work in Honolulu and Kalaupapa. The sisters’ founder in Hawaii, the highly regarded Mother Marianne, had died just six years earlier. Following her example, the Franciscan order embraced the idea of an Oahu hospital and set aside $24,000 to buy land in the relatively undeveloped Liliha district overlooking Honolulu.

Church and community fund-raising efforts followed, and on May 8, 1927, Bishop Stephen Alencastre blessed the halls of the new 70-bed facility. The staff consisted of 13 doctors and nine sisters.

The next day, St. Francis admitted its first patient — an eight-year-old girl with tonsillitis. Her bill, paid for by the Territorial Board of Health, was $15.

That first year, St. Francis admitted 694 patients, delivered 40 babies and removed 70 appendixes. Also that year, 45 people died there.

The original building no longer stands.

Under the innovative vision of those Sisters of St. Francis who were its administrators — Sister Flaviana Engle, Sister Jolenta Wilson, Sister Maureen Keleher, Sister Aileen Griffin and, since 1990, Sister Beatrice Tom — St. Francis Hospital has flourished over the past 75 years breaking new ground in the fields of cardiology, oncology, home care, renal care and transplant surgery.

A second medical center

The administrator with the longest tenure was Sister Maureen. Her 35-year leadership oversaw the hospital’s most expansive growth including several new hospital wings, the introduction of home care, renal dialysis treatment and Hawaii’s first organ transplants, and the opening of the state’s first freestanding hospice.

It was also Sister Maureen’s dream to see a second medical center in Leeward Oahu, a vision realized with the opening of St. Francis Medical Center-West in 1990.

The new medical center quickly became the dialysis site for the leeward Oahu communities. It soon introduced MRI services and, before the decade was through, had built a new building to house radiation therapy, occupational and physical therapy services, a clinical lab and a telecommunications operation.

In 1997, the Sisters of St. Francis dedicated the Maurice J. Sullivan Family Hospice Center in Ewa. That same year, the Liliha campus blessed the St. Francis/Harry and Jeanette Weinberg Medical Pavilion, a five-story structure that houses outpatient services and programs, and administrative offices.

St. Francis Medical Centers coordinate the state’s only bone marrow registry and one of the nation’s largest hospital-based kidney dialysis programs. It is Hawaii’s only facility that provides transplant services.

St. Francis hospice programs see approximately 1,000 patients a year and provide additional services to families and loved ones.

Its parish nurse program supplies about 10 parishes with nurses who monitor parishioners’ health through home visits and church blood pressure screenings. An unfunded program, it also has about 150 volunteers and sees about 1,000 people a month.

On the Big Island, St. Francis teamed up in 1997 with the Diocesan Office for Social Ministry to sponsor Mobile Care, a program that delivers dental and medical care on wheels to more than 3,600 poor, uninsured and underinsured persons a year.

Through the years, the mission of St. Francis Healthcare System of Hawaii has been that of Christ himself, to heal the sick and to tend to the poor and the outcast. For more than 75 years, it has provided that ministry with vision, excellence and dedication in its acute care hospitals.

Recent financial realities have made that mission increasingly difficult. The Sisters of St. Francis now face one of its most significant moves since Mother Marianne left the administration of two New York hospitals in the capable hands of others to embark on a new mission in Hawaii.

“I am hungry for the work,” Mother Marianne said of that decision 122 years ago.

The Hawaii Franciscans have always hungered for the work and have never flinched from taking bold new steps in the care of others. Today those steps lead in a new direction. The mission, however, remains the same.