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State kicks in $50M for outpatient center at upcoming Kona area hospital

A rendering of the medical center in development in Kona.
Office of Gov. Josh Green
A rendering of the medical center in development in Kona.

More health care options are coming for Hawaiʻi Island residents.

The state is partnering with The Queen's Health Systems and the Hawaiʻi Health Systems Corporation.

Queen's announced plans last year to build a new 80-bed hospital in Kona. Now, the state is kicking in $50 million to partner with Hawaiʻi Health Systems Corporation to build an outpatient center to complement the new facility.

HHSC also operates Kona Community Hospital and Kohala Hospital. West Hawaiʻi Region CEO Clayton McGhan explained that West Hawaiʻi residents have needed better access to health care.

"For a long time, our region has struggled with many different challenges like physician shortages and limited access to care,” he said.

“By teaming up with The Queen's Health Systems and the state of Hawaiʻi, we finally have a coordinated, sustainable way to tackle these issues together.”

This comes as rural hospitals brace for impacts due to changes in Medicaid eligibility and significant increases in health insurance costs for those who use the Affordable Care Act.

On Hawaiʻi Island, the mix of health care payers is 70% Medicare and Medicaid, and only 30% from private insurers. This ratio has made it difficult to attract health care providers to the areas.

Gov. Josh Green said that's made it critical to invest in new facilities.

“We are going to have to fight like you can't believe to keep resources in health care because otherwise the potential is for billions and billions of dollars falling out of the health care system,” Green said.

“That's why I think you're seeing new models where private partners come together with public partners to make it work.”

Gov. Josh Green talks about the Kona medical facility on Dec. 3, 2025, with HHSC West Hawaiʻi Region CEO Clayton McGhan on the left.
Office of Gov. Josh Green
Gov. Josh Green talks about the upcoming Kona medical facility on Dec. 3, 2025, with Hawaiʻi Health Systems Corporation West Hawaiʻi Region CEO Clayton McGhan on the left and Queen's Health Systems President Jason Chang behind on the right.

Green estimated that because Congress hasn’t extended the enhanced subsidies for the Affordable Care Act, about 8,000 people in Hawaiʻi could lose their insurance. Without those subsidies, people could see their insurance costs more than double.

He said he put $16.5 million aside in next year’s budget to cover the expiring federal subsidies.

“We'll be the first state, I think, to propose this,” he said.

“It's possible the federal government will step up and continue to fund Obamacare for the next year or two. We've heard different messages from the administration, from the president himself, but we're going to be out ahead of that because we believe in all of our health care providers in our health system. But they can't do this without funding, and they can't do this without people being insured.”

Queen's Health Systems President Jason Chang explained that the new hospital and outpatient facility are expected to be completed in the next five years.

“We'll plan to build these things at the same time,” he said. “The goal is to have the first patient cared for in the fifth year, so excited.”


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Ashley Mizuo is the government reporter for Hawaiʻi Public Radio. Contact her at amizuo@hawaiipublicradio.org.
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