Nation’s health care crisis has already arrived in Hawaii
Much media attention has been devoted recently to the impending healthcare crisis in Hawaii. The two areas of primary focus have been: 1. meaningful "tort reform" to decrease the costs of malpractice insurance premiums for Hawaii physicians, and 2. ever-decreasing reimbursements to physicians by insurance companies, on both the private and federal levels. These two phenomena have been targeted as the primary reasons driving quality physicians from the state of Hawaii, and limiting access to care for Hawaii's populace.
Definitive recent studies by the American Medical Association have shown that "tort reform works" to retain and recruit physicians in the states in which it has been enacted, while simultaneously protecting patients' right to sue in righteous cases of malpractice. This data has been demonstrated in the past year in North Carolina, Illinois and Ohio. Prior to that, both Texas and California had similar positive results.
In numerous mainland states, malpractice premiums for doctors have skyrocketed in recent years to more than $150,000 per year in those states without tort reform. However, in Hawaii many physicians have formed a co-op malpractice insurance company (HAPI), which keep our malpractice premiums at a much more sensible level of approximately $25,000 a year. Thus, I do not believe that the "high cost of malpractice insurance" is the primary driver of physicians out of the state.
In 1994, Hillary Clinton cited Hawaii as the "model" for her proposed national health care reforms, based on universal health care coverage for its citizens. Now, 14 years later, Hawaii has become the model for "health care meltdown." Quality physicians are leaving our state in droves -- starting with the neighbor islands, and now from Honolulu itself.
The primary cause for physicians' departure is poor and ever-decreasing reimbursement by the private and federal insurance organizations. Since its inception in the late l960s, Medicare has set the bar for physician reimbursement under the "third-party payor system" through Medicare.
At that time, the reimbursement from Medicare to doctors was based on "reasonable and customary charges" currently being charged throughout the nation.
Beginning in the l980s, Medicare began to ratchet down its reimbursement to physicians, and now, in 2008, the reimbursement by Medicare to a surgeon for a procedure such as a total hip replacement has decreased from $4,000 to $1,200 (83 percent in inflation-adjusted dollars) during the past 25 years. The private insurance programs, such as HMSA, have used Medicare's policy to set their own reimbursement policies, and now pay just slightly over Medicare's rates. The reimbursement rate gets cut by around 5 percent each year, while the cost of doing business rises each year by 3 percent or 4 percent.
During this same period, patients' health care premiums have continued to rise annually, with the insurance companies insisting that "93 cents of every health care dollar" goes to physicians. One does not need much math training to see that this does not compute.
Instead, in order to make up for decreased revenues per patient, Hawaii's physicians have had to drastically increase the number of patients they see in the office each day, and the number of necessary surgical procedures they perform, just to keep up.
This has resulted in rural doctors leaving the state, crowded waiting rooms for the doctors who have remained, long waits for appointment times for patients and a generalized decrease in the quality of care that we physicians can deliver to our patients, since we have less time to spend with each patient individually, even though we often spend 70-80 hours a week at our jobs. Nationally, Hawaii ranks 33rd in reimbursement of the 81 Medicare regions, while having the highest cost of doing business in the United States.
As physicians, we all take an oath to provide quality and accessible care to our patients, and we do our utmost to uphold that oath. But in the end, a medical practice is also a business, and doctors in Hawaii cannot much longer endure the double-edged sword of tort reform denial coupled with inadequate reimbursement by insurance companies.
Make no mistake about it: The crisis is already here. I strongly urge Hawaii's residents and legislators alike to get behind state Rep. Josh Green on these two vital issues.
Hopefully, it's not already too late.
Thomas J. Kane III is an orthopedic surgeon and a member of Orthopedic Associates of Hawaii.