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Case Study

Proving Its Relevance: Wahiawa General Hospital repositions to secure its future

THE SITUATION

Following years of preserving healthcare services while under financial distress, Wahiawa General Hospital (WGH) in Wahiawa, Hawaii, was making a comeback when the COVID-19 pandemic struck, sending the hospital into a tailspin. Relief funds were helpful but once those ended, the hospital was in a financially critical situation. Working closely with CHC Consulting, hospital leadership focused on repositioning WGH as an indispensable part of the community’s healthcare continuum in order to become an attractive acquisition target.

BACKGROUND

A group of doctors are indoors in a medical clinic they. They are standing in a group and smiling for the camera.

Founded in 1944, in response to community healthcare needs after the attack on Pearl Harbor, WGH has served Central Oahu and the North Shore as both an acute care and long-term care facility.

WGH’s relationship with CHC began in 2016, with the signing of an agreement for CHC to manage the hospital. The following year, CHC brought Brian Cunningham on board to serve as WGH’s CEO and tasked him with stabilizing the struggling hospital. Turnaround efforts initially focused on rightsizing, process reengineering and productivity management to stop the hospital from operating in the red. Over time, it became clear that typical turnaround strategies would not be enough to prevent patients from overlooking the facility and instead going to three larger hospitals within 15 miles that were also closer to the major population center of the island.

Location, however, became one of the strongest selling points when leaders at WGH determined that the only way to ensure the hospital’s survival was by partnering with an organization that could address its debts and provide capital to rebuild its aging infrastructure.

Where WGH sits on the map, a single highway leads up to the highly touristed North Shore. Heading south from the hospital, the highway splits, leading to the region’s three other hospitals.

“Wahiawa General sits right in the middle, so we have a great location to be a feeder hospital, funneling patients that come down the highway to full-service hospitals further south,” Cunningham says.

 

 

THE PLAN

During the course of Cunningham’s tenure, from 2017 to the spring of 2024, he worked with CHC to strategically right-size WGH, eventually discontinuing surgical services, followed by shutting down the long-term care facility. These were tough but necessary decisions. Without a general surgeon on staff and with no means of recruiting one, WGH’s surgical center was losing upwards of $1 million a year, keeping clinicians under contract and on call 24/7.

The hospital was so distressed that simply breaking even was hailed as a significant milestone. By the time the pandemic pushed WGH to the brink of closure, it had already become apparent that partnering with a larger healthcare organization was the only viable path to long-term sustainability. But how could WGH court prospective partners beyond the due diligence phase, which would show challenges such as dwindling cash on hand, mounting debt, and aging facilities.

The solution was to initiate a series of projects that demonstrated WGH’s relevance to the healthcare continuum across the island.

“We had something that no one else had — space and beds, at a time when all other hospitals in the area were overwhelmed,” Cunningham says.

By capitalizing on its strategic partnership with CHC, WGH began to demonstrate that its capacity to fill gaps in the community’s continuum of care was a must-have rather than a nice-to-have.

  • WGH first partnered with the state Department of Health to dedicate space for substance abuse stabilization beds.
  • During the pandemic, WGH opened a COVID subacute facility to move lower-level COVID patients out of busy hospitals so they could admit and treat sicker patients. WGH also admitted overflow patients from a nearby long-term skilled nursing facility.
  • For the healthcare system that eventually acquired WGH, the hospital offered a lower cost care setting for a continual backlog of “waitlisted” (non-dischargeable) patients requiring post-acute care.

Through these efforts, WGH had begun to demonstrate that its capacity to fill gaps in the community’s continuum of care was a must-have rather than a nice-to-have. To drive home this point, Cunningham did an analysis of how WGH’s closure would impact the island’s already overburdened healthcare system.

  • The reduction in beds would affect other facilities that were already operating over capacity.
  • Closure would lengthen ambulance wait times island-wide.
  • WGH took in up to 50 walk-in patients and up to 10 ambulance patients per day that would need to be absorbed by other facilities.
  • The closure of a similarly sized hospital in 2015 backed up hospitals for a full two years, leaving other facilities scrambling to provide adequate patient care.

Armed with this analysis, Cunningham approached potential hospital system partners.

RESULTS

Because of the relationships built and assistance provided by WGH, leadership found a partner system to acquire the hospital. After three years of extensive due diligence, the transaction went through with a major healthcare system in April 2024. Over time, the partner plans to upgrade infrastructure in phases and operate the facility as a freestanding emergency department, fulfilling continuum-of-care gaps in the region.

“Demonstrating relevance as a critical healthcare facility in the continuum of care represents a tremendous success story for CHC and a victory for the patient population we served,” said Cunningham. “There’s an art and a science behind all of this. The science was presenting a data-based case for partnership, but the art centered on relationship building. None of this would have happened had we not shown a shared, heart-centered, mission-focused desire to deliver comprehensive healthcare to our community.”

 

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