Gov. David Ige’s administration announced an agreement Friday with the United Public Workers union that allows for transfer of three Maui region hospitals to private control under Kaiser Permanente.

The union had sued to stop the deal because of concerns over the jobs of its employees at the three hospitals, Maui Memorial Medical Center, Kula Hospital & Clinic and Lanai Community Hospital.

“These employees are providing top-notch care for the community, and this agreement acknowledges their dedication to their patients,” said Ige in a statement. “The settlement provides certainty to the people of Maui County that they will continue to have access to high quality health care.”

Said Dayton Nakanelua, state director of the UPW: “With this agreement, the governor has recognized and addressed the concerns of our members. He is honoring the process and the existing collective bargaining agreement.”

Maui Memorial Medical Center hospital. 3 aug 2016
Maui Memorial Medical Center is one of three hospitals that the state is transferring to the private sector. Cory Lum/Civil Beat/2016

Court Asked To Dismiss Lawsuit

The state and the unions will ask the 9th Circuit Court of Appeals to lift its injunction and dismiss UPW’s lawsuit.

The standoff between the union and the governor was intensified recently by the Legislature’s override of Ige’s veto of a bill intended to help the union workers by providing severance and retirement benefits.

On Tuesday the Employees’ Retirement System sued the state of Hawaii and the Hawaii Health Systems Corporation over the deal, expressing concern over its potential impact on the tax-exempt status of the retirement system.

Ige said the ERS lawsuit does not affect the settlement agreement. The governor reiterated his opposition to Senate Bill 2077, now Act 1, and said the Legislature will have to find a way to fund what the law calls for.

His objections included concern that SB 2077 would end tax-exempt status for the ERS. Ige on Friday insisted that he did not want to put at risk retirement benefits for tens of thousands of public servants.

Governor David Ige enters with Chief of Staff Mike McCartney and Director of Communications Cindy McMillan before announcing the deal was reached with the United Public Workers union at Maui Hospitals. 12 aug 2016
Governor David Ige along with Chief of Staff Mike McCartney and Director of Communications Cindy McMillan before announcing the deal reached with the United Public Workers. Cory Lum/Civil Beat

Privatization Coming

The UPW agreement clears the way for transfer of the Maui region facilities to Kaiser operation and management, which will happen by Nov. 6 at the earliest.

According to the administration, “UPW bargaining unit employees will work under Kaiser’s supervision and direction and still be covered by UPW collective bargaining agreements until those agreements expire on June 30, 2017.”

Kaiser will also offer to hire UPW employees during a six-month period starting next July 1.

Ige said the main impetus for the settlement, which will cost the state an undisclosed amount of money, was to honor its bargaining contracts with public employees.

Kouchi English Souki floor1. 5 may 2016
A majority of the Hawaii Legislature supported legislation this year to help Maui hospital workers. Cory Lum/Civil Beat

The UPW has over 530 employees at the hospitals. Another powerful public employees union, the Hawaii Government Employees Association, has around 900 employees.

It’s not clear how the agreement with UPW might affect the HGEA, but the governor said it was possible the UPW deal could serve as a template for a similar agreement with HGEA.

Ige said his administration hopes to continue talks with HGEA — which he described as having different needs than UPW — as well as with the ERS and legislative leaders. The governor continues to characterize the hospital transition as very complex.

HGEA lobbied hard for the passage of SB 2077, and the union’s executive director, Randy Perreira, has belittled the governor over his handling of the hospital transfer.

House Speaker Joe Souki welcomed the agreement reached with UPW as well as the passage last year of legislation that led to the privatization..

“I want to thank the governor and UPW Director Dayton Nakanelua for their commitment to work through some very complicated issues and negotiate this historic settlement,” said Souki in a statement. “I also commend the Maui delegation and other members of the House and the Senate who initiated and supported HB 1075. Their commitment to preserving benefits of state workers and to ensuring healthcare services for the people of Maui was an important element throughout this transition process.”

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