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The following is testimony that was submitted by the Grassroot Institute of Hawaii for consideration by the Hawaii House Committee on Finance on Feb. 23, 2021.
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To: House Committee on Finance
Rep. Sylvia Luke, Chair
Rep. Ty J.K. Cullen, Vice Chair

From: Grassroot Institute of Hawaii
Joe Kent, Executive Vice President

RE: HB224 HD1 — RELATING TO THE STATE HEALTH PLANNING AND DEVELOPMENT AGENCY

Comments Only

Dear Chair and Committee Members:

The Grassroot Institute of Hawaii would like to offer its comments on HB224 HD1, which would exempt special treatment facilities, psychiatric services and chronic renal dialysis services from the state’s “certificate of need” requirements.

If enacted, this bill would take an important step toward addressing Hawaii’s ongoing difficulties with health care affordability and access. By creating exemptions to the certificate-of-need requirements for certain facilities, you would improve both the quality and affordability of care for many Hawaii residents.

While the intent of certificate-of-need  laws may be to increase health care quality, research demonstrates that such laws actually decrease both quality and access.

According to a 2020 study from the Mercatus Center, Hawaii has the highest number of certificate-of-need restrictions in the country. The result of those restrictions is to make health care more expensive, limit access to care and lower the overall quality of care.

By comparing costs and outcomes in states with restrictive certificate-of-need laws and those without, the Mercatus Center determined that CON laws increase annual per capita health care spending in Hawaii by $219 and reduce the number of health care facilities in the state by about 14.

The center also estimates that without certificate-of-need laws, deaths from post-surgery complications would decrease by about 5% and the proportion of patients who would rate their hospital highly (at least 9 out of 10) would increase by 4.7%.

A further consideration is that by imposing limitations on the construction of facilities intended to address substance abuse and psychiatric issues, certificates of need have the effect of limiting treatment options for Hawaii residents. The lack of alternatives and options has an effect on everything from care for the homeless to an effective criminal justice response for victims of drug abuse.

Due to certificate-of-need laws, many of Hawaii’s problems with health care access and affordability are self-inflicted. By removing these restrictions — not only for the facilities contemplated in this bill, but for other facilities and services as well — we could go a long way toward improving health care in Hawaii.

Thank you for the opportunity to submit our comments.

Sincerely,

Joe Kent
Executive Vice President, Grassroot Institute of Hawaii