by Keli'i Akina, Ph.D, President of Grasroot Institute of Hawaii Even before the COVID-19 pandemic, we were warned that lack of healthcare capacity in our state was a deepening problem. The last two years have revealed that things are even worse than we thought. As I discussed in my Wall Street Journal commentary published last weekend — “Hawaii Is No Paradise if You Need Medical Care” — Hawaii’s healthcare crisis includes a growing doctor shortage, lack of specialty care in rural areas, high emergency room wait times and the fact that we have among the fewest hospital beds per capita in the nation. These are problems that have been highlighted by the pandemic, but they did not pop up overnight. They are the result of decades of regulations and policy decisions, including high taxes, extensive regulations and Hawaii’s notoriously high cost of living. According to Lisa Rantz, my guest on this week’s episode of “Hawaii Together” on ThinkTech Hawaii, many people are still waking up to the reality of the state’s healthcare shortages. Rantz is the executive director of the Hilo Medical Center Foundation, which has been conducting a comprehensive study of community health needs. She noted that while the state has done “a great job” at ensuring that people have health insurance, “having health insurance does not equate to having access to healthcare.” If anything, Rantz said, the numbers understate the depth of the healthcare crisis in Hawaii. While we usually hear that the state is short about 820 doctors, Rantz says that the real shortage, at this point, is over 1,000 physicians. And it’s not just more doctors that we need. The nursing shortage is also growing. Hawaii County has the third-largest nursing shortage in the country, followed by Maui at No. 5 and Kauai at No. 13. The shortage of specialists has long been a problem on neighbor islands, where people have to fly to Oahu or the mainland for care. But now, even Oahu is starting to notice the effects. “I think as we’ve seen more neighbor island folks getting care on Oahu, as our shortages increase across the neighbor islands, we’re starting to feel that on Oahu,” said Rantz. “When you call your doctor and they’re like, ‘Oh, you can’t get in for two weeks,’ or ‘We can’t see you for three weeks because we have appointments from neighbor island community members,’ then all of a sudden it hits home. I think as the shortage increases, we’re starting to see more of the impact on Oahu.” The shortages restrict possible solutions to the problem. Rantz said that when speaking to legislators about the lack of doctors, they’ll suggest using nurse practitioners or physician assistants to provide primary care. But that won’t work when the shortage exists across all medical positions. Why does this shortage exist? Rantz says it’s the result of a “perfect storm” of factors, many of which will be familiar to anyone who has followed our “Why We Left Hawaii” series. The state’s high cost of living — including housing costs — is especially discouraging to medical students who are already struggling with heavy debt. Combine this with the high taxes and low reimbursement rates for doctors and it becomes very difficult to recruit young medical professionals to Hawaii. In other words, the same problems that contribute to our state’s overall population loss are exacerbating our healthcare woes. Clearly, the first thing that lawmakers ought to do is embrace policies that will reduce the overall cost of living, like lowering taxes and making more land available for residential development. But there are other reforms that could directly address our state’s healthcare capacity issues. We could start by liberalizing Hawaii’s so-called certificate-of-need laws, which are among the strictest in the country. A study from the Mercatus Center found that states with certificate-of-need programs have 30% fewer hospitals per 100,000 residents and 13% fewer rural ambulatory surgical centers per 100,000 residents. Rantz also singled out Hawaii’s low Medicare rates as a problem that could benefit from the attention of our congressional delegation. At the state level, she said, the general excise tax is a significant problem for private-practice physicians. Though most people perceive the GET as a small charge, it is imposed at every transaction level and ultimately totals two to three times more than its face value of 4.5%. Combined with the state’s low Medicare reimbursement rate, that leaves private-practice doctors in Hawaii scraping by with very low margins. Rantz said that between the high cost of living and the GET, it is very difficult for Hawaii doctors to maintain a viable practice. “We actually just lost three providers here in East Hawaii on Hawaii island that are closing up their doors and moving to the mainland, because they can’t make the numbers work. They just can’t do it,” she said. If policymakers are serious about improving healthcare access in our state, addressing the GET and low Medicare reimbursements are just the beginning. Other avenues to explore include reexamining licensing laws, exploring the potential of public-private partnerships, improving telehealth and, of course, repealing or reforming the state’s CON laws. What we cannot afford to do, however, is stick our heads in the sand and hope the problem will go away. If we want to be prepared for future emergencies, we need bold changes to encourage and facilitate the provision of healthcare. ____________ This commentary was Keli’i Akina’s weekly “President’s Corner” column for Dec. 11, 2021. If you would like to have his columns emailed to you on a regular basis, please call 808-864-1776 or email [email protected]. (https://www.grassrootinstitute.org/2021/12/bold-change-needed-to-fix-hawaii-healthcare/)
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The New County TAT Earmarks Aren’t the Real Problem
Honolulu, just like most of the other neighbor Island counties, has passed a 3% addition to the Transient Accommodations Tax (TAT). It had to. The State was giving it millions of dollars a year in revenue sharing, but in 2020 the Governor shut off the spigot using his emergency powers and in 2021 the legislature made that permanent. “We’ll keep the money permanently,” they said, “but you counties can enact a TAT of your own.” Here in Honolulu, enactment of the county TAT was pretty much a foregone conclusion. But there was lots and lots of debate over earmarking the money. This much goes to the General Fund. This much goes to the Transit Fund (i.e., rail). The final version of the bill also sets up a special account in the general fund, which must be used to “mitigate the impacts of visitors on public facilities and natural resources, including the restoration, operations, and maintenance of beaches and parks,” and to “supplement, and not supplant, any funds regularly appropriated for those purposes. May I suggest, though, that these debates are meaningless. Suppose I had three bank accounts, one called “General,” one for “Vacation,” and one for “House Maintenance.” I dutifully put some money into each account every month, pay my house maintenance expenses out of the House Maintenance account, and pay other expenses out of the General account. Then tragedy strikes! My spouse gets sick and has to go to the hospital. Because I don’t have a diamond-studded platinum health plan, the health insurance only pays a certain percentage of the hospital bill, leaving a good chunk for me to absorb. My mortgage is due in a few days, and my General account doesn’t have enough to pay it. Do I preserve the other two accounts, let the mortgage fall into default, and cringe while waiting for the foreclosure notice? Not a chance. The Honolulu rail project is hitting some serious bumps in the track. The wheels don’t fit the rails (or the rails don’t fit the wheels). Someone forgot that there’s electric power needed to get a train moving – a lot of power –every time a train leaves a station, so that other customers on the power grid might be impacted if the trains simply pull power out of the grid without doing anything to protect the other users. And now, HART needs to start building the rail track in urban Honolulu, which is going to be quite a bit more complicated, and may contain more surprises, than building in the suburbs or in rural areas. These surprises may require more than the Transit Fund is going to have. Are we going to preserve the General Fund and the visitor mitigation (or whatever it’s going to be called) fund while letting the City & County of Honolulu go into default, wrecking its bond ratings in the process? Although that decision may be made by future City Councils and not this one, we can bet that we won’t be worrying about the integrity of the special funds as much as we would be worrying about how to pay the City’s bills. Which is why, when we are examining county council actions like this one, we need to pay more attention to the reality of the action (a new tax is being imposed) rather than the “earmarks” on that tax (which may become entirely meaningless once financial reality sets in). As voters and taxpayers, I suggest we be more watchful of what issues are threatening to give us even more cost overruns, and that we insist that our politicians who are (or want to be) in that office give us some action on those issues now. (The message below was emailed to WMTA from Grassroots Institute of Hawaii, of which Keli'i Akina is President) Akina writes in Wall Street Journal about ways to fix Hawaii healthcare HONOLULU, Dec. 7, 2021 >> Readers of The Wall Street Journal were provided a diagnosis over the weekend about what has been ailing Hawaii's healthcare system.
Keli'i Akina, president of the Grassroot Institute of Hawaii, said Hawaii's dangerously diminished healthcare capacity is due to the state's high taxes, its so-called certificate-of-need laws and other forms of government intervention into the medical marketplace. His article, "Hawaii Is No Paradise if You Need Medical Care," was published online Friday and in the newspaper's print edition on Saturday. The Wall Street Journal is one of the nation's most respected newspapers, with a circulation of almost 3 million readers. "It's wonderful that a publication such as The Wall Street Journal has allowed us to tell Hawaii's story about the pitfalls of government interference into healthcare," Akina said. "Our experience is a warning as to what other states should not do, if they wish to make healthcare more available and less expensive. It also will help policymakers in Hawaii realize that they are not operating in a vacuum; their counterproductive policies are being noticed nationwide, and maybe this will help motivate them to get on the right path." Here is how Akina's Wall Street Journal article begins: "When the coronavirus pandemic hit in March 2020, the only thing Hawaii had going for it was that it could strictly control who came and went. The Aloha State, however, was ill-prepared to handle the increased burden on its medical system, and authorities used that as an excuse to impose lockdowns on all economic and social activity—to 'flatten the curve' and prevent excess demand at local hospitals. "Nineteen months later, some of those lockdown measures are being lifted, but many remain. COVID-19 eventually will morph from a pandemic disease to an endemic one, and presumably Hawaii’s constitutional balance of powers and freedoms will be fully restored. But Hawaii’s healthcare capacity shortage will continue, at least until the state’s political authorities tackle with earnest its multiple causes. "Hawaii has among the fewest hospital beds per capita of any state and the 10th longest emergency-room wait times. For years it has wrestled with a severe doctor shortage and a lack of specialty care in its rural areas. These shortages are the result of decades of high taxes, voluminous regulations and certificate-of-need laws." To read more, you can access the full article here. However, it is behind a paywall, so you will have to either subscribe to The Wall Street Journal to finish reading it or wait until early next month when it will be posted on the Grassroot Institute of Hawaii website. For more information, or to arrange an interview with Akina, please call Mark Coleman at 808-386-9047 or email [email protected]. |
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