KEALAKEKUA, Hawaii – Kona Community Hospital informed employees on Monday that they will be eliminating 34 positions, starting no later than August 1st. In addition to the reduction in force, the hospital will be closing its 18-bed skilled nursing service.

“It is with deep regret that we must make these decisions,” said Jay Kreuzer, West Hawaii Regional CEO of Hawaii Health Systems Corporation (HHSC), in a media release. “Over the past several years, the entire hospital staff has pulled together to help address our financial challenges. Our hospital departments are running efficiently, and there is no excess or waste to be trimmed. Sadly, these efforts do not offset our FY 2016 deficit due to lack of state funding.”

The hospital needs to fill a $6 million budget shortfall created in part by increased costs of collective bargaining and retiree health benefits, which in the past years were paid by the State. This year the HHSC says the State opted not to fund these expenses.

“We are grateful for state support,” said Kreuzer in the media release. “Although the state budget is also tight, with these new expenses, the general fund assistance we receive is not enough to continue our current level of operations.”

In order to offset rising expenses, KCH has already reduced staff through retirement and resignation. The hospital also successfully concluded a year-long project that implemented $9 million in cost savings initiatives.

However, in an effort to further reduce expenses, hospital leaders developed financial contingency plan including the reduction in force and closure of the skilled nursing unit. The skilled nursing beds are not being de-licensed, and could potentially be reopened at some time in the future.

Although the 18-bed skilled nursing unit has an average daily census of six patients, the cost to operate it remains constant. Additionally, skilled nursing services can reasonably be provided by other facilities within the region.

“We are profoundly aware that the lives of these employees are being impacted,” said Kreuzer. “They have been valued members of our work family. These are very difficult times for our hospital.”

“At Kona Community Hospital, we have learned to adapt when change happens,” Kreuzer said. “Our mission has always been to provide accessible, comprehensive healthcare to our community. We will continue to do that during this tough transition.”

HHSC Corporate and KCH Human Resources personnel are prepared to assist affected employees through the 90-day RIF process. Employees whose positions have been eliminated will have the option to be placed in a budgeted vacant position within their bargaining units. HHSC West Hawaii Region media release

Kona’s reductions are part of corporate-wide layoffs and service reductions intended to address a $50 million projected deficit for the entire system for fiscal year 2016.

The hospital will be holding a community input meeting on Monday, June 15th to talk about the cuts. The meeting will be held at the hospital’s Administration Building, Conference Rooms 2 and 3, and begins at 5:30 p.m.

The situation is similar to what is happening at Hilo Medical Center, which held a community input meeting last week in Hilo.