Pass the GET Exemption on Medical Services, JABSOM Should Give Admissions Priority to Neighbor Island Students

Hawaii’s physician shortage follows a similar pattern in communities throughout the entire U.S. – largely spiked by greater demand (larger population of seniors, insured, overall population) and less supply of doctors, primarily due to retirement. So that’s the baseline from which all communities are working with.

What makes Hawaii’s shortage unique is that our state’s super high cost of living and lower pay scale for physicians here (relative to other parts of the mainland) is a disincentive for doctors to practice on the islands.

In essence, states are competing against each other to lure an already smaller pool of doctors (because of retirement) through recruitment and retention (having them stay).

And personal finance-salary and benefits is a major influencer in recruitment and retention with most of the initiatives proposed and talked about – from GET medical exemption, increasing Medicare Reimbursement Rates, educational loan repayment program, proposed housing stipend for doctors, possible special low-interest rates on mortgages for doctors, etc. – ultimately have to do with improving this profession’s bottom line or net gain.

If it were not for the importance of the profession, that healthcare is fundamental to our quality of existence, there would be no urgency or talks of critical shortages. How many other industries and professions have left Hawaii (or that we found unimportant to cultivate) that simply became antiquated without a whisper of concern?

That said, this is the reality we are dealing with, that in our free enterprise economy, competition among states, cities and communities to recruit and retain doctors, we must put our best foot forward, put together the most ideal environment, financial or otherwise, to reverse the trend of our state’s physician shortage.

What this means is that all of those proposals are on the table for negotiations that the federal government (relating to Medicare Reimbursement Rates, federal loan forgiveness, reducing administrative requirements for Medicare, etc.), state government (GET exemptions, local loan repayment programs, housing stipends, funding the JABSOM and residency training, etc.) and county governments (additional surcharges) along with the private sector must work on collaboratively.

How effective this collaboration is — will determine how successful we are in dealing with Hawaii’s physician shortage.

Let’s face the fact that 1) Hawaii’s high cost of living will always be in the top tier in the nation – a built-in drawback unless we can raise salaries and benefits to match other extremely expensive cities to live in (which is what we’re attempting to do); and that 2) Hawaii will continue to be a beautiful and desirable place to live – definitely an advantage that we must be promoting and “selling” to our workers, in this case, our current and future doctors.

Shortage on the neighbor islands and rural communities
JABSOM’s Hawaii Physician Workforce Report reveals that the neighbor islands physician shortage is particularly acute.

Hilo physician Dr. Scott Grosskreutz said, “So, from the Big Island, we’re very much in a state of crisis there. We have a 44% shortage of physicians on the Big Island. About 230 doctors is the number of physicians that we’re short of and of the remaining practicing physicians 32%, or basically a third of the remaining doctors, are 65 years old or older.”JABSOM’s Dean for Academic Affairs Dr. Lee Buenconsejo-Lum mentioned one of the school’s goals is to increase the number of physicians on the neighbor islands.

Clearly, they’re rightly prioritizing this problem and have as a long-term goal to have medical school branches on all islands. In addition, JABSOM aims to expand the school’s admission from 77 to 100 students, eventually.

JABSOM already has as a priority to admit resident applications with strong ties to the State of Hawaii. Studies show that medical students tend to practice medicine in communities that they have strong ties to. So JABSOM is on the right track here with regards to increasing the state’s physician shortage.

However, perhaps, it’s also time to consider giving preference in admission to students from the neighbor islands. National studies and JABSOM has done a study themselves, showing that students in rural communities (in our case the neighbor islands) are more likely to practice in the rural communities they came from.

“Nearly half (46%) of physicians from rural backgrounds who stayed in Hawaii chose to practice in a rural setting, while only 5% of physicians from non-rural backgrounds chose to practice outside of O‘ahu. Thus, Hawaii-schooled physicians from rural settings are nine times more likely to practice in a rural location than those who did not go to high school on a neighbor island,” a JABSOM study found.

This is significant, revealing data – and certainly it should be considered in the admissions process, as one among other JABSOM plans to increase doctors practicing on the neighbor islands.

The shortage on the neighbor islands is critical. Other medical schools at universities on the mainland already have special entrance programs that target applicants from rural communities. We should be doing the same.

State prioritizing the physician shortage, and the GET Medical Services Exemption
This year the Hawaii State Legislature and Gov. David Ige provided more funds for JABSOM’s expansion of its residency and student training programs. It also allowed for more loans to be given in the Hawaii State Loan Repayment Program, which helps graduates of JABSOM and other health professions reduce their educational debt in exchange for remaining in Hawaii to practice. These are two areas that will require ongoing support from the state. We applaud lawmakers for recognizing the importance of and prioritizing them.

But it is also time that the State’s General Excise Tax be reworked and lawmakers pass a bill that exempts the GET on medical services. This will go a long way specifically in keeping doctors on the islands (physician retention).

Our physician shortage is a major quality of life issue, and it should be among our highest priorities.