A state committee has decided against reconsidering a proposal for a private hospital on Maui. That's a disappointment to many Maui residents who have voiced concerns about acute-care bed shortages and about the prospect for even more painful healthcare gaps in the event of natural disasters.

But it also highlights the critical need to revamp the state's process for issuing a "certificate of need," the permit required for major changes in the healthcare system.

The proposal by Malulani Health and Medical Center to build a 150-bed acute-care community hospital in Kihei has divided residents unable to agree on the kind of facilities Maui could support. Most seem to accept the general notion of a second hospital but had questions about financial viability of providing all the services proposed.

The review process as conducted by the State Health Planning and Development Agency failed to get answers to those questions. State Sen. Rosalyn Baker, D-5th District (S. Maui, W. Maui) put her finger on one problem: The agency needs to nail down more of the answers before even accepting the application as complete.

Instead, the process lumbered forward, frustrating the community instead of enlightening it about how well the proposed facility would match the demand. In the end, the entire application was rejected. It's puzzling why the agency couldn't find some kind of middle ground, perhaps setting conditions that would allow the project, in some form, to proceed.

Gov. Linda Lingle, a vocal supporter of the project, has proposed that lawmakers exempt Malulani from the process. There's also been talk of taking the matter to court.

Neither idea sounds ideal.

A court appeal in this case would be a financial drain the state can't afford. And a special exemption from established governmental review sets a bad precedent.

What makes more sense is for the certificate-of-need process to be evaluated and reformed, something that Lingle and some legislators also are contemplating.

If nothing else, the controversy will tap the community wisdom for ways to improve how our healthcare system is managed for the highest public good.