KAHULUI, Maui — The proposed Malulani Health & Medical Center improved its prognosis yesterday by winning approval from the Tri-Isle Subarea Health Council in a passionate community debate over whether Maui can support two hospitals.

Dr. Ron Kwon, the Maui physician behind a move to build the 150-bed facility in Kihei, called the 5-2 vote to approve Malulani's application for a state certificate of need "a great day for Maui." But he acknowledged the application still must be scrutinized by two additional review panels, with recommendations from all three groups to be submitted to the State Health Planning and Development Agency Administrator David Sakamoto, who will make a final decision on Malulani's application.

Maui Memorial Medical Center in Wailuku, run by the quasi-public Hawai'i Health Systems Corp., vigorously opposes the Malulani project, saying the competing hospital would siphon off $55 million in revenues and potentially dilute the island's medical resources.

But during sometimes emotional testimony Friday and Saturday, dozens of physicians, nurses and residents expressed their frustration with Maui Memorial's services and its 50-year-old facilities.

The three-day hearing drew several hundred people, and health council and state health agency officials said they had not seen such a high level of community interest for any certificate of need application in recent years.

Kwon said afterward that public testimony and backing from Gov. Linda Lingle and Mayor Alan Arakawa helped persuade the panel that a new hospital is essential to the growing population. In testimony provided by her Maui liaison, Lingle said it is unlikely the state would be able to provide the substantial funding for the kind of improvements at Maui Memorial that will meet future healthcare demands.

Maui Memorial Regional CEO Wesley Lo said he is looking forward to presenting testimony before the next two review boards, which he said are more technically oriented.

"We expected the emotional stuff but we were disappointed that it got so politicized. The political support (for Malulani) has nothing to do with the criteria. We were sticking basically to the criteria and they had all the emotion," Lo said, referring the six criteria used to judge certificate of need applications. The criteria include need and accessibility, relationship to existing healthcare, and availability of resources.

The hospital is proposed for 40 acres off the Lipoa Parkway in Kihei. It is a partnership between local nonprofit Malulani Health Systems Inc. and Triad Hospitals Inc. of Plano, Texas. The partnership estimates it will cost $212 million to build a state-of-the-art healthcare campus, including a comprehensive imaging center, an emergency department, heliport, open-heart surgery facilities and neonatal intensive care unit not now available on Maui.

During yesterday's meeting, health council member Denise Cohen, a nursing instructor at Maui Community College, said she was assured by the fact that Triad is backing Malulani. The Mainland company's commitment to the local community was one concern expressed by opponents.

Cohen said she researched Triad and found "it has a really good success rate. Whenever they go into a community, they do what they say and the community really likes it."

Cohen also cited Lingle's support, and labeled as "too little, too late" calls by state Sen. Roz Baker and Maui Memorial officials to hold off on approving the project so that a master plan could be developed for Maui's healthcare needs. She echoed earlier remarks that talk of a study and a push for improvements at Maui Memorial materialized only after it became apparent that Malulani was a serious prospect with substantial financial backing.

Elaine Slavinsky, former nursing director at Maui Memorial, said "we would be crazy" not to accept Triad's offer of $170 million to build a new hospital. "The community is crying for this hospital," she said.

But Glenn Izawa, a state social worker from Moloka'i who voted against the application, questions whether Malulani would be able to raise its 20 percent development costs, about $42 million. He also said the project's South Maui location didn't make sense because most of the island's growth is projected for West and Central Maui, and that the proposal doesn't address the community's most pressing healthcare needs: substance abuse and psychiatric treatment.

Health council member Curt Morimoto of American Medical Response, which supplies ground and air ambulance service on Maui, also voted against it. He said Malulani submitted "faulty data" to support its application, and he was skeptical the hospital would be able to meet staffing projections of more than 800 workers. "Simply saying 'If we build it, they will come' is simply not enough for me," he said.

Voting with Cohen and Slavinsky to approve the application were MCC nursing instructor Julie Clark-McGee, naturopathic physician Valerie Simonsen and health council chairman John Ornellas, a property manager with Castle & Cook on Lana'i.

After the hearing, Kwon said that Malulani has raised $1 million and several Hawai'i donors are waiting for state approvals to provide more support.

Separate meetings to discuss the plan are tentatively scheduled for July 20 before a panel of health experts and July 27 before the Statewide Health Coordinating Council in Honolulu, with times and locations to be announced.

Reach Christie Wilson at cwilson@honoluluadvertiser.com.