State reviews and Vatican’s approval advance sale of St. Francis hospitals
By Patrick Downes
Hawaii Catholic Herald
St. Francis Healthcare System last month advanced a few steps closer to selling its two hospitals to Hawaii Medical Center thanks to nods from a state agency and the Vatican.
Hawaii Medical Center is the partnership of Hawaii Physician Group and the Kansas-based Cardiovascular Hospitals of America formed this year to acquire St. Francis Medical Center-Liliha and St. Francis Medical Center-West.
Three review panels of the State Health Planning and Development Agency (SHPDA) have recommended approval of Hawaii Medical Center’s “certificate of need,” which is required for the acquisition of the two medical centers.
The state regulates health care to ensure accessible, quality care at a reasonable cost.
The Vatican has also approved St. Francis Healthcare’s request to transfer ownership of the two facilities to Hawaii Medical Center.
The certificate of need hearings were held Sept. 15, 21 and 28 before the Oahuwide Certificate of Need Review Committee, the Certificate of Need Review Panel, and the Statewide Health Coordinating Council.
Providing testimony were Dr. Danelo Canete and Dr. Collin Dang of Hawaii Physician Group and Badr Idbeis, Douglas Kell and Adib Farha of Cardiovascular Hospitals of America.
Dr. Canete is president and CEO of Hawaii Medical Center.
Endorsing the transfer of ownership was Sister of St. Francis Beatrice Tom, acting chief executive officer and president of St. Francis Healthcare.
The review panels gave their recommendation to SHPDA administrator David Sakamoto for a final decision.
In a news release, Canete said he was “optimistic” the certificate of need application will be approved. SHPDA has until Dec. 8 to issue its decision.
Vatican approval of the deal, through the Congregation for Institutes of Consecrated Life and for Societies of Apostolic Life, was required because the two medical centers are Catholic institutions. Sister Patricia Burkhard, general minister of the Sisters of St. Francis in Syracuse, N.Y., received the authorization on behalf of her congregation and St. Francis Healthcare System in Hawaii.
The transfer of ownership must also be approved by the state Office of the Attorney General as required by state law, and the Department of Justice as required by federal law. The transaction is expected to close by the end of this year.
The sale agreement will require Hawaii Medical Center to follow the “Ethical and Religious Directives for Catholic Healthcare Services,” the code of ethics U.S. Catholic hospitals adhere to, and maintain a Catholic presence on both campuses.
The Sisters of St. Francis will own and administer the Catholic chapels in both hospitals.
Included in the sale of the two medical centers will be the joint venture entities providing computed tomography, magnetic resonance imaging, outpatient cardiac catheterization, and outpatient endoscopy services at St. Francis Medical Center.
Hawaii Medical Center intends to change the name of St. Francis Medical Center-Liliha to Hawaii Medical Center East, and St. Francis Medical Center-West to Hawaii Medical Center West.
With a total of 438 beds, the Hawaii Medical Centers will be Hawaii’s only physician-owned medical centers.
Hawaii Physician Group is made up of approximately 125 local physicians.
Cardiovascular Hospitals of America is a for-profit hospital development company founded in 2002 in Wichita, Kan., that is developing hospital projects in California, Kansas, Louisiana, Indiana and Kentucky and overseas.
St. Francis Healthcare System, with the divestiture of its two hospitals, will focus on community health services, including home care and hospice care for the terminally ill.
In development is Franciscan Vistas project, a new model for long-term care based on a “stay healthy at home” program that will allow residents 62 or older to live independently and receive individualized services in their own homes as their needs change.
St. Francis also has begun Our Lady of Keaau, a new ministry at the former First Hawaiian Bank retreat, an expansive facility on the Waianae coast that hosts retreats and civic groups and provides services to the homeless and disadvantaged.
It is also planning to build a hospice center in east Honolulu.
The healthcare system now has seven subsidiaries: St. Francis Medical Center, St. Francis Medical Center-West, St. Francis Healthcare Foundation, St. Francis Healthcare Enterprises, St. Francis Community Health Services, St. Francis Residential Care Community, and Our Lady of Keaau.