Dr. Lynda Dolan and Dr. Dan Belcher were kind enough to share their time with the Economic Development Committee in October. The topic was the challenges facing private practice physicians in Hawaii and on the island. The overall statistics for physicians in the islands are grim, with a shortage of 1000 doctors across the state and over 300 on Hawaii Island alone. Why is this the situation, and what can we do to help.
- As seen in the local paper recently, one issue facing private practice physicians is the general excise tax (GET). While federal and state facilities are exempt, all other physicians have to pay the GET on their services. They can pass these costs on to private payers, but the federal government prohibits them from passing these costs on to Medicare and Medicaid patients. While not a huge expense, Dr. Dolan said that she would be able to hire one to two more staff members if she didn’t have to pay it.
- Hawaii has the lowest Medicare and Medicaid reimbursement rates in the nation while also being one of the most expensive places to live. This not only hurts physicians who work with these patients directly, but HMSA and other insurance companies base their reimbursement rates on these lower federal reimbursements. Additionally, starting in 2023, the Medicare and Medicaid reimbursement rates are set to be cut by 10% across the nation. With 50% of the patients in the state on Medicare or Medicaid, things are only going to get worse.
- Fixed costs are increasing due to inflation, and insurance reimbursement rates are not keeping pace.
- There is a workforce shortage at both the physician and staff levels. For physicians in particular, Dr. Belcher said that for every four that comes to the state, only one stays. Additionally, half of the physicians born and raised in Hawaii do not return.
How We Can Help
- Push our state senators and representatives to exempt medical care from the GET.
- Push our federal senators and representatives to work for more equitable Medicare and Medicaid reimbursement rates for the state. We were told that they are aware of the issue, but for every increase in reimbursement rates for Hawaii, another state would lose the same amount (ie any changes must be budget neutral).
- Make it more attractive for physicians and their families to live in East Hawaii. This includes affordable housing, a more attractive downtown (support the Business Improvement District), engagement with family members, etc. Dr. Dolan shared that it takes about three years and $1,000,000 for a new physician to become productive. We need to make sure that they, and especially their families, want to stay here.
- Be open to practice consolidation and team-based care. If you don’t have major heath issues, be okay with seeing a nurse practitioner who will still be overseen by a doctor.
Private physicians in East Hawaii take care of about 1/3 of all patients. They are critical to our health care needs and the needs of prospective employers and employees. If we can’t get the needed coverage on the island, business will choose to go somewhere else.
Please call the office and let Miles or Taylor know if you would like to be a part of the Economic Development Committee. We are always happy to have more participants.