Focusing on Healthcare, Well-Being and Our Pocketbooks
by Rep. Romy M. CACHOLA
Despite the old saying “Health is Wealth,” healthcare all too often takes a back seat to rail, education, crime, the economy and other hot button topics at the State Legislature. While issues such as Hawaii’s physician shortage are cause for concern, the sense of urgency to address our lack of doctors may not be as great as say, balancing the budget—so any legislation to alleviate the shortage is usually tabled for future discussion.
But perhaps not anymore. The time is now to address Hawaii’s physician shortage, which continues to worsen as more doctors reach retirement age or leave Hawaii for other states where the cost of living and running a business are much lower.
To address this shortage and other important health-related issues, I’ve introduced the following bills that we would be wise to take action on during this session:
House Bill 1463 - Exempts health care providers from liability in cases of patients receiving injury or worsening of a health condition while awaiting insurer preauthorization for medical services or treatment. Currently, certain physician-ordered treatments or services must be approved in advance by the insurer or by a medical review service contracted by the insurer before the insurer will provide final reimbursement or payment.
However, obtaining preauthorization for medical services may hamper the ability of health care providers to provide the necessary treatments to their patients and may be a contributing factor to the Hawaii’s acute physician shortage.
House Bill 1464 - Requires the State Insurance Commissioner to conduct a study on capitated payment rates in Hawaii that compares Hawaii’s reimbursement model for physicians with other states. Primary care physicians mostly receive their reimbursement under certain insurance plans at a capitated rate of $24 per-member-per-month which does not change regardless of how many times a physician treats a member per month.
Based on this rate, a solo practitioner must work over 200 hours per month and care for over 1,500 patients to receive a fair and reasonable income, not including costs for overhead, staff, or supplies. Additionally, more insurance companies are moving away from a fee-for-service model of reimbursement and towards capitated payments. This may negatively impact patient care by encouraging doctors to see fewer patients, discouraging them from accepting sickly patients, or causing them to leave for other states with a lower cost of living and a higher capitated payment rate.
HB 1463 and HB 1464 both go a long way towards addressing our doctor shortage, which according to some estimates, could amount to between 800 to 1,500 physicians within the next decade.
House Bill 1089 - Appropriates funds to the State Department of Health for a Pilot Program to pay for Hawaii residents to attend medical school in the Philippines in exchange for a commitment to practice medicine in Hawaii after graduation and licensure, particularly in rural and underserved areas on the neighbor islands.
It’s imperative to think “outside of the box” for ways to reduce our physician shortfall. The State could simply hire more faculty or expand the facilities at the University of Hawaii’s John A. Burns School of Medicine. However, HB1089 is a much less expensive alternative that financially assists Hawaii residents to attend medical school in a foreign nation like the Philippines where the cost of education and living are lower than in Hawaii.
House Bill 1462 - Addresses the $12 billion unfunded liability of the Hawaii Employer-Union Health Benefits Trust Fund. HB1462 requires the State auditor to study the feasibility of providing health benefits to state and county employees using a self-insured model. It also establishes a Rate Stabilization Reserve Fund within the Hawaii Employer-Union Health Benefits Trust Fund to help subsidize the costs of providing health and other benefit plans for active employees, retirees and beneficiaries.
Based on my research, 29 other states have converted to a self-insured model which resulted in significant cost savings. Similarly, if HB1462 is passed, the State will save approximately $500 million per year—an amount that could not only ease the financial burden for taxpayers but also help fund much needed state and county projects such as the Aloha Stadium development and OCCC relocation. Nor will we have to lay off workers, raise taxes, reduce benefits for state and county employees or increase employee contributions.
It’s time to get serious about addressing our massive health unfunded liability to ease the burden on our taxpayers. If we do not act now, our young people and future generations will end up being burdened with this obligation.