In a hat trick, Hawaii Medical Center announced yesterday that it will layoff at least 150 employees at its hospitals in Liliha and Ewa Beach. This will be the third layoff in four months and comes four weeks after the hospital filed for Chapter 11 bankruptcy recognition citing skyrocketing health care costs and cash shortfall as the reasons, after its lender, Siemens Financial, refused to extend existing loan agreements for its subsidiaries, HMC East and HMC West. HMC has to pay Siemens around $5.5 million.

Hospital officials said the laid off staff, which constitute 18 % of HMC’s 830 employees, would be given 60 days notice and would be provided help in transitioning to new jobs. In a statement CEO Danelo Canete said though that the decision to lay off workers was difficult it was necessary as the hospitals were 30 % overstaffed. “Based on national standards, our staff is too large for the number of patients in our hospitals,” Canete said. “We will still have sufficient staffing to provide excellent patient care after the reduction.”

The recent layoffs come a month after a restructuring plan was worked out to help the Hawaii Medical Center cope through the crisis by reducing expenses and increasing efficiency. 

Canete said the layoffs would not in any way affect the quality of services. The Hawaii Medical Center, is the state’s only for-profit, physician-owned hospital, and in the current count the total cuts to 230 employees in two months. This lay off will save HMC about $10 million annually.

It has struggled since it purchased the two financially strapped medical centers from St. Francis Health Systems in January 2007 for $67.9 million. Hawaii Medical Center is a partnership of CHA Hawaii, an affiliate of Cardiovascular Hospitals of America, a leading U.S. hospital management company, and the more than 130 Hawaii-based physicians who form Hawaii Physician Group LLC.

Hawaii Medical Center LLC, listed assets of between $10 million and $50 million, while it listed liabilities of between $50 million and $100 million when it filed for bankruptcy. At the time, hospital executives insisted they had enough cash to pay all of their employees and also proposed to sell the company’s accounts receivables in order to fund full payment to vendors and other unsecured creditors.

Salim Hasham, HMC's director of implementation was hired five months ago to help orchestrate an HMC turnaround. He said economic conditions in Hawai'i and nationwide were partly to blame as was Siemens' unwillingness to extend the loan. "We were actually caught in it from that standpoint," he said. He hasn't ruled out the possibility of more layoffs though at this point, he said, he doesn't see the need for more staff reductions.

Richard Meiers, Healthcare Association of Hawaii president and chief executive officer, said even hospitals are being affected in an economic downturn.  Referring to the issues facing hospitals amid the economic crisis he said "It's part of a bigger picture. There's going to be a lot more grief over the next couple of years."