KAHUKU — With less than a month until Kahuku Hospital ends services, legislators and hospital officials are working feverishly to come up with a way to save the hospital or at least preserve what many feel the community absolutely must have — the emergency room.

Meetings are under way that may turn the tides on the fate of the only hospital and emergency room serving residents from Punalu'u to the North Shore.

The hospital has been losing money for six years and has a $3 million debt, its officials say.

Discussions have reached consensus on several issues, said Sen. Clayton Hee, D-23rd (Kane'ohe, Kahuku).

"I haven't heard anyone say that an emergency room is not a critical, vital need at that location on the North Shore," Hee said. "And most people agree that a critical access facility is necessary."

Kahuku offers both services and some fear that should the hospital close, those services would be lost and anyone interested in taking over would have to go through a long licensing and permitting process to get them back. So keeping the hospital open and creating a smooth transition would help preserve those services, he said.

For a smooth transition to take place, the Kahuku Hospital Board of Directors must reconsider filing for bankruptcy, and the state would need to grant emergency funding to continue operations. Then the hospital and the community would have time to develop a plan for the facility, said state Rep. Michael Magaoay, D-46th (Kahuku, North Shore, Schofield).

"The best choice right now, if they decide not to file bankruptcy, is to have them absorbed through the Hawai'i hospital system," Magaoay said. "That would be the perfect model."

Don Olden, Kahuku Hospital CEO, said the emergency funding could protect the hospital's Certificate of Need, the Critical Access Hospital designation and the license to be a hospital. Of the three, the Critical Access Hospital designation is the most important and difficult to get because it's a federal Medicare designation that allows hospitals to get reimbursed at a higher rate.

"For Kahuku, it was somewhere close to $1 million in additional revenue," Olden said, adding that being part of the state hospital system is very desirable because hospitals in the system get about $2 million more on average than Kahuku or other independent small rural hospitals. The 12 hospitals in the state system shared $38 million in 2005 while Kahuku and Moloka'i General received $1 million each, he said.

While emergency room service is important to everyone, it's expensive. Most of the hospital's debt comes from the emergency room, Olden said.

Olden said the process is important because people will be able to draft a strategy to move forward. Hee, Magaoay, Rep. Colleen Meyer, R-47th (Ha'iku, Kahalu'u, La'ie), hospital officials, residents and others are expected to be involved.

Several developers have a stake in Kahuku or the surrounding communities and some of them also are involved, including Continental Pacific, which purchased the hospital grounds and other property in the area this year, and Kuilima Resorts, which is planning to build more hotels at Turtle Bay.

Both developers said maintaining an emergency room in the area is important.

Nathan Hokama, spokesman for Kuilima Resorts, said the developer is working behind the scenes to ensure medical services, and that at some point could be counted on for financial support — but nothing is being promised at this time.

"At this point, it's pretty much trying to unravel what needs to be done and what steps they can take because they know that you need a hospital in the area for the development to work, and at the same time you need critical mass to support the hospital," Hokama said.

Hundreds of new homes, hotels and condominiums are being planned for communities surrounding Kahuku.

"Kuilima has a vested interest in the success and continuity of care in the area," he said.

Eric Morrison, Hawai'i program general manager for Continental Pacific, said the company has committed its Kahuku Hospital land to continued medical service.

"We've assured everyone that at least an emergency room facility will be up and running out there," Morrison said. "Furthermore, we've said we would continue the lease ... if someone wanted to step in and continue to run it."

Continental Pacific has been working with Ko'olauloa Health & Wellness Center, based in Kahuku, to provide it with land at the hospital, but now the group is considering moving into the hospital if it should close, he said.

The company was in the news recently for offering to sell residents of Kahuku Village the fee-simple interest of their rental units for an average of $75,000 in return for support of the company's plan to build 18 beach- front homes.

Irene Carpenter, president of the Ko'olauloa center's Board of Directors, said a lot depends on the state providing the emergency funds.

The clinic is exploring a cooperative that allows health centers and emergency rooms to work together, Carpenter said.

"The issue for us is we are a community health center; we don't have funds to run an emergency room. They always lose money," she said.

"We're exploring every avenue to see what we can do to save it," Meyer said. "There's a lot of people who have a soft place in their hearts for that hospital because when they needed it, it was there."

Reach Eloise Aguiar at eaguiar@honoluluadvertiser.com.