Hawaii lawmakers don’t have the luxury of waiting any longer to pass legislation aimed at easing the state’s worsening healthcare provider shortage, according to a longtime Hawaii island radiologist and active member of the Hawaii Provider Shortage Crisis Task Force.
Dr. Scott Grosskreutz underscored this urgency, especially regarding neighbor island healthcare, during the Jan. 17 episode of “Hawaii Together” program on ThinkTech Hawaii, hosted by Keli‘i Akina, president and CEO of the Grassroot Institute of Hawaii.
He said a recent national study of 3,000 counties in America found the Big Island has the third-worst shortage of primary healthcare providers in the nation, Maui has the fifth worst, and Kauai the 13th worst.
“The crisis is so real, so well documented and so compelling that something needs to be done now,” he said. “It simply can’t be deferred for several more years.”
Grosskreutz said many Hawaii doctors are nearing retirement, but what’s making it increasingly difficult to attract new medical personnel to replace them is the state overall high cost of living, including for housing, as well as the state’s burdensome general excise tax.
Hawaii is one of only two states that broadly taxes healthcare, he said, and is the only state that advises passing its tax on to patients covered by Medicare, Medicaid and TRICARE — a practice of questionable legality that providers and the state Department of Taxation do not agree on.
“These unique taxation models … put a tremendous burden on trying to stay afloat,” Grosskreutz said. “We probably have about half of the healthcare providers in medicine in the state of Hawaii in private practice, but that number is decreasing pretty rapidly year by year. And again, the financial aspects play a great part of it.”
Grosskreutz said exempting medical services from the state GET is “low-hanging fruit” that legislaors could easily pick as a way to help alleviate the state’s shortage of medical personnel.
He noted that a bill to exempt medical services from the state GET actually passed the Hawaii Senate in 2020 by a vote of 25 to zero, but then the House didn’t hear it because the COVID-19 pandemic hit.
“The very fact that one of the two two bodies in the state Legislature was unanimously in favor of doing this for logical and practical reasons to improve access to care — I think that was encouraging to me.”
To hear the entire interview, click on the video below. A complete transcript follows.
1-17-23 Keli‘i Akina hosts Scott Grosskreutz on “Hawaii Together”
Keli’i Akina: Aloha, and welcome to “Hawaii Together” on the ThinkTech Hawaii broadcast network. I’m your host, Keliʻi Akina.
My guest today is Dr. Scott Grosskreutz. He’s practiced radiology on Hawaii island for almost three decades. Scott’s also an active member of the Hawaii [Provider] Shortage Crisis Task Force.
Now, as I’m sure many of you are aware, Hawaii has an acute physician shortage and is in need of thousands of healthcare workers. On our neighbor islands especially, where Scott resides and practices, these shortages are especially concerning since delays can often mean life or death situations.
Scott joins me today to discuss the state’s healthcare crisis, and we’re also going to talk about what steps legislators can take to address it.
Akina: Thanks for joining me today, Scott Grosskreutz. Glad to have you on the program again.
Scott Grosskreutz: It’s nice to be here again, professor, thank you for the invitation.
Akina: Well, first of all, tell me a little bit about your own background and specifically how you got involved with the Hawaii [Provider] Shortage Crisis Task Force.
Grosskreutz: Well, I’ve been living in Hilo since 1993 and providing care in the community at the hospitals, and I served as the chief of staff in the Hilo Medical Center, and it became clear many years ago that we had a constant and chronic shortage of healthcare providers in far too many areas.
And, you know, this shortage of healthcare providers [has] been documented by the Area Health Education Center at the University of Hawaii. The projections of physician shortages have been anywhere from, you know, 800 to 1,000 over the last several years, depending on the methodology that they use.
But it goes beyond that. We also have severe shortages of APRNs [advanced practice registered nurses] and PAs [physician’s associates] who are a critical part of our primary care provider workforce here on the Big Island and on the neighbor islands, and we also have a severe shortage of nurses. And so this has impacted the care of many patients.
And, you know, a recent access to healthcare study by Community First and the Hawaii [State] Rural Health Association, you know, did document many people were having a real problem, you know, accessing healthcare in the neighbor islands, and many were actually thinking of moving just to be able to get better access to healthcare, which is a problem.
Akina: So, Scott, you’re saying that it’s not just a shortage of physicians, it’s a shortage of nurses and other staff as well, and on the neighbor islands, it’s especially acute.
Now, I’ve heard stories that our neighbor island friends simply can’t get an appointment with a specialist and have to fly to Oahu or to the mainland quite frequently.
How bad is it, especially where you are on the Big Island?
Grosskreutz: Well, it’s fairly significant. Our shortage of physicians has been calculated to be 40% to 50% for the last several years, and that certainly feels about right.
You know, we know that many of the APRNs and PAs we work with are also, you know, stretched thin with very large patient panels. You know, people are burning the candle with both ends and often doing, you know, 60- [to] 70-hour work weeks trying to keep up with the amount of work that needs to be done for our patients, and it’s still not enough.
And, you know, historically, I guess, the idea would be you would have, you know, kind of, more assets and resources on Oahu — which is to be expected for a big city — but that you would fly as, you know, as many people as possible.
But that is extremely expensive to fly people. And then recently, you know, due to a tragedy, the air ambulance system was suspended, and so people couldn’t get off the island.
So the lesson here is that we need to develop the healthcare systems on our neighbor islands so that we can take care of our neighbors appropriately here locally, you know, as often as a medically practical and reasonable.
Akina: Now, you just mentioned an air ambulance crash recently.
Tell me a little bit more about that and what it exposed about the vulnerability of patients on neighbor islands.
Grosskreutz: Well, you know, over the years — especially when I was working closely at the emergency room [in] Hilo Medical Center, you know, doing a lot of trauma reads there — you know, there just were many, many patients that we saw that needed to be transferred right away.
I mean, and that’s because we didn’t have the resources in-house to take care of them. [With] certain medical conditions like trauma and stroke and heart attacks, you know, time is money. You either fix it now or else often there’s no chance to repair the damage later.
So, you know, when we can’t move people quickly to with air ambulance, we’ve had some bad outcomes over the years. And, you know, these folks are on air ambulances, they’re doing a wonderful job. They are heroic in many ways. And I think many times because of the need to get patients, you know, elsewhere for treatment, you know, they fly in conditions that normally they probably would not prefer to fly in, you know, and then that has its risk.
So there was a recent flight going from Maui to the North Hawaii area that crashed, unfortunately, and caused suspension of air ambulance services for a period of time.
Akina: Well, it would seem that if we could solve the shortage of medical personnel, we wouldn’t have to depend upon flying people from island to island or even to the mainland. But let’s get back to the problem itself of the shortage.
As you and I have discussed on many occasions, there are a lot of factors that are involved — it’s not just one single causality — ranging from the retirement rate of physicians and the things that are actually incentivized — earlier retirements and otherwise — to the tax issues, Medicare reimbursement, as well as the overall cost of living in Hawaii.
Let’s take these item by item. And I know there’s one that you might possibly be considering now, and that’s retirement. Talk a little bit about that and how that’s affecting the supply of medical personnel.
Grosskreutz: We have a lot of folks that are kind of getting long in the tooth, and they’re practicing into their late 60s and 70s. In fact, a good percentage of our healthcare workforce is in that position, and so there’s a whole cohort of people that are nearing retirement.
And, I mean, to be honest, you know, it’s, I mean, usually people in healthcare — whether you’re a doctor, nurse or whatever — you know, they’re usually not too much whiners. You know, we’re used to hard work. We’re used to lots of training. We’re used to, you know, keeping your nose to the grindstone.
But, you know, the hours involved with the, that are required to try to keep up with the level of healthcare needs of the community — it’s one thing to be working, you know, sleepless nights or 60- or 70-hour weeks, you know, when you’re an intern. I guess it’d be a little bit more challenging when you’re, you know, you’re 60 or 65 or 70.
And to be honest, a lot of younger, you know, people coming out of training want to have more of a work-life balance, you know, and have more time for their family, and that’s understandable too.
But I think the bottom line is there are, there’s a good portion of our healthcare force that’s about ready to retire out, and we just don’t have any replacements for those individuals.
Akina: You talked about younger people and some of the goals that they have, such as a more balanced work-life practice. But they’re also facing other issues as well — cost of living.
Sometimes people think doctors are just extremely highly-paid individuals and shouldn’t have to worry about the things that ordinary people do, but is that really the case, especially for people coming into practice or those in private practice and so forth, and especially younger personnel who are entering the medical fields?
How does the cost of living impact them here in Hawaii — everything from housing to food?
Grosskreutz: Well, it impacts things a lot like it does for people in every, you know, job, occupation or profession, but it gets to be a little bit more challenging, especially if folks have got very high debt loads from training.
And just to give an example, my daughter, Malia, is born and raised in Hawaii. She wants to come back home. She’s completed a dermatology residency. Now, she’s doing a Mohs [micrographic surgery and dermatologic oncology] surgery training fellowship where she’ll learn how to remove skin cancers and do plastic-type surgery to help people rebuild, you know, their faces or whatever after the cancers are removed. And so, you know, pretty rigorous stuff.
Her and her physician husband have got, you know, a debt burden from college and medical school and things like that of about $400,000. And so, you know, if she were to come back and try to, say, open up a private practice, between paying off the debt burden that they have for education and paying for, you know, trying to get a house, there might not be much money left, you know, that they would have access to for other things. You know like, for example, even, maybe even helping, you know, build their practice or hire the necessary people.
So, you know, that’s a real challenge. The cost of providing medical services — like all services in Hawaii — are the highest in the country, you know, by far. And the reimbursements for Medicare, Medicaid, local insurance companies are actually right near the bottom.
And then the other challenge we have is that the state of Hawaii has like a unique general excise tax on everything, pretty much. And it’s — we’re the only state in America that taxes Medicare, TRICARE and Medicaid programs, and we’re only one of two states that broadly tax healthcare.
And so, anyway, that’s a problem because if — you often will break even caring for Medicare patients and you’ll lose money, you know, caring for Medicaid patients. And then the state of Hawaii will come in and say, “Well, listen, we don’t care whether you’re losing money providing care for these folks, who really need it, we’re going to still charge you, get tax on your gross income.”
And so, you know, if you’re already losing money, the GET tax just ensures that practices, you know, go into the red, and often they, you know, they have a hard time surviving in Hawaii.
Akina: Now, when you talk about Medicare reimbursement and about the general excise tax that’s imposed upon medical services, we’re really looking at the business aspect of medicine.
And I don’t think necessarily that most physicians and medical personnel went into the profession to do the business, but basically it sounds like they’re becoming overwhelmed by the cost of business, especially if you’re going to be in private practice.
Now, we’ve seen a lot of people leave private practice or retire early or simply give up their aspirations, and that’s a real hit to people who live on the neighbor islands, where we don’t have as extensive and availability of clinics and so forth.
Talk a little bit about that: how doctors and other personnel in private practice are especially impacted by the Medicare rates for reimbursement as well as the GET.
Grosskreutz: Yeah, well, the people in private practice, you know, that might be your family practitioner, you know, or APRN or physician that you’re seeing in their practice.
They come here, they build their practice, they, you know, hired individuals, they paid for all kinds of computer systems and things like that, and maybe hundreds of thousands of dollars or more in equipment so they could practice medicine.
And in private practice here, you know, it’s just, it’s very difficult. The state of Hawaii has, you know, again, these unique taxation models that nobody else in the country really has that put a tremendous burden on trying to stay afloat.
Now, when it comes down to hospitals and hospital-employed physicians and nurses — Kaiser systems, things like that — all those other healthcare systems, they are exempt from the GET. In fact, the head of the Healthcare Association of Hawaii said that if the GET tax were applied to our islands’ hospitals, that many of them would have to reduce services or close their doors.
And so, we probably have about half of the healthcare providers in medicine in the state of Hawaii in private practice, but that number is decreasing pretty rapidly year by year. And again, the financial aspects play a great part of it.
You know, I used to really focus on, “How can we do the best job possible working with, you know, our colleagues and different disciplines and providing the best, you know, care we can for, say, breast cancer or other conditions?”
But recently, it’s become clear that we have to almost fight to be able to stay in business at all and try to provide any level of care.
Akina: Hmm. Now, Scott, you’ve been helpful toward our efforts of the Grassroot Institute to educate the public and lawmakers about what’s going on in terms of the impact of the general excise tax on medical personnel, and you know that we’re currently circulating a petition to the public that we’re going to present to the governor and lawmakers calling for the exemption of medical services from the state general excise tax.
Now, as you look at that, can you tell us a little bit more as to why that’s so important to call for that kind of exemption and whether you think that that’s feasible and possible during this upcoming legislative term?
Grosskreutz: Well, I think I appreciate the Grassroot leadership in that area. It is completely possible, and it’s quite logical, and it should happen.
When you take a look at things where we’ve got a documented worsening healthcare shortage that’s been going on for several decades; you’ve got a national shortage of doctors and nurses that’s going to get worse; we’re going to have a harder time recruiting; you have a physician as a chief executive who wants to improve access to healthcare — that’s Dr. Green; you have, you know, billion-dollar surpluses in the budget as far as the eye could see; you know, it just seems to make a lot of sense to have a healthcare system that encourages people to come to Hawaii instead of practice — especially younger practitioners — and that doesn’t actually punitively push them out of the healthcare system.
You know, basically, what we’re doing with some of these programs — like Medicare, TRICARE and Medicaid — is that we’re taxing patients, and then the physicians are forced, you know, they’re basically paying their patients’ taxes for healthcare.
So that, of course, is regressive, but it kind of has the same effect that if you were to charge, you know, police officers, you know, for fighting crime or you were to charge firemen for fighting fires. It just, it makes absolutely no sense. You know, intellectually, and it has very deleterious effects on the workforce.
And one of the things that I think is a real tragedy is that as the number of people in private practice — which is the only area of medicine that’s taxed by the GET — continues to decrease every year, Keliʻi, in a fairly short period of time, the amount of taxation from taxing, you know, doctors and nurses and APR[N]s, that’s going to go down a lot, you know.
At some point it’ll go down to zero. Not right away, but it’s kind of like having a flock of sheep that you use to, you know, for the wool, and then you start throwing them on the barbecue, you know, for — pretty soon there’s not a lot of the flock left to, you know, to be able to benefit, you know, from for the society, and so that’s my concern.
Akina: During the COVID pandemic, we really saw our healthcare provider system stressed to the limit. It’s not that the pandemic caused this shortage, it’s that we had one going into it, as you and I have talked about before.
And the interesting thing is that we really felt the shortage of nurses and other healthcare professionals — so much so that the state decided to go ahead and lift a regulation that it had, which before didn’t permit out-of-state licensed healthcare professionals to practice here readily in Hawaii.
And that was just so necessary, and people saw that we could actually benefit by allowing professionals trained in other states to come in and practice in Hawaii.
What are your thoughts about turning that into a permanent feature of our healthcare practice over here? How much would that help us?
Grosskreutz: I think it would help some, particularly when there’s, you know, times of crisis. I believe Gov. Ige, this summer, declared there was an immediate peril to public health when he basically waived state licensing, you know, for nurses to come to the state.
And sometimes states will have, a number of states will get together and they’ll have a pact and say, “Listen, if you’re licensed in my state and, you know, we know we’ve got rigorous standards that you — it’s OK to practice in the other states within the pact,” and I think that’s well worth looking at.
So it’s a solution, and I think that makes sense to pursue it. But more than anything else, we need to train up more young people who are local and we know will stay if they got the opportunity and can have a fiscally, you know, viable practice here, and then just try to set up a situation where they can be successful.
Akina: An important part of that is helping them live here in this economy.
And doctors, they’ve invested a lot in their training, in their education — personally and financially — and they expect an appropriate reward financially. But many of them, as you and I have mentioned, find housing itself hard to afford.
How related do you feel the issue of housing shortage is to the difficulty of attracting new doctors and retaining recent graduates here in Hawaii?
Grosskreutz: I think it’s a big issue. There was a recent article in the Financial Times of London about housing here in Hawaii and how that’s impacting, you know, access to healthcare, so it’s big enough that it’s catching, you know, the attention of major, you know, publications worldwide.
From a personal point of view, we had a fantastic breast radiologist who is coming here basically to replace, be my replacement, as I was supposed to retire. But, you know, he couldn’t find a house that he and his wife could afford, and so they went back to the mainland.
So it is a real thing. It does have a big impact.
Akina: We’ve got to hit those problems together, indeed, the entire complex of issues that makes it difficult for people to live here in Hawaii.
Well, as we come to the close of our chat together today, what are some things we can do in the immediate future? What could our Legislature act upon coming up that could help us to make some advancement in solving the problem of medical personnel shortage?
Grosskreutz: Well, I think the low-hanging fruit here is the general excise tax. Because, you know, again, to have to be the only place in the country that has this sort of tax that discourages private practice — that’s a fixable problem.
The Tax Foundation of Hawaii and its president were very kind. They helped draft two general excise tax bills — one that was for a broad exemption for doctors, nurses and APRNs, the other is more circumscribed just for federal programs of Medicare, Medicaid and TRICARE — and we understand some Big Island senators are going to be introducing those in the Senate, which I think is a big plus.
There was a bill that was introduced in the 2020 session that we helped try to put together — it was SB2542 — to exempt, a general exemption for healthcare. And that actually passed the Senate by a vote of 25 to zero, and then the House didn’t hear it because the COVID pandemic hit, and they limited the session.
But I think the very fact that one of the two two bodies in the state Legislature was unanimously in favor of doing this for logical and practical reasons to improve access to care — I think that was encouraging to me.
Akina: That’s good to hear. I want to make sure that our viewers understand the urgency of the situation we’re talking about today.
Tell us what you think Hawaii would be like in five or 10 years if we don’t take the right steps now to stem off the medical personnel shortage.
Grosskreutz: Well, we have, again, a very top-heavy workforce, you know, with the older and even, you know, senior providers.
You know, I’m of Medicare age, and past it already. So you’re going to see that cohort retire — they can’t keep going on forever — and then you’re going to see the deficits we have.
And right now, there was a national study of 3,000 counties in America, and the Big Island had the third-worst shortage of healthcare providers in primary care; Maui had the fifth-worst shortage of healthcare providers in America; and Kauai had the 13th worst shortage.
And so, as this huge cohort of maybe as much of a quarter to a third of our providers retire the next three to five years, you’re going to find it almost — many people will find it almost impossible, I think, to get, you know, to have their own health, you know, family doctor or to get access for care or to get an OB-GYN [obstetrics and gynecology].
And that, unfortunately, I mean, the real problem here isn’t the fact that the healthcare providers are having a hard time, it’s just that if we can’t make a goal of it, or we don’t have enough people within our team, then patients have access to care issues.
And the Department of Health statistics show that the mortality, or the death rate, for many conditions like stroke and heart attack and cancer and trauma and COPD [chronic obstructive pulmonary disease] and asthma and adolescent deaths and suicide is much higher — significantly higher — on the neighbor islands than it is on Oahu, where they tend to have more healthcare resources.
Akina: Scott, those are some compelling thoughts. Any last word? If you were sitting down face-to-face with one of our legislators or our governor, what would you say?
Grosskreutz: I would say to be bold here. I understand that there’s — things are done a certain way and sometimes we are reluctant to proceed in fresh directions. But the crisis is so real, so well documented and so compelling that something needs to be done now. It simply can’t be deferred for several more years.
So, you know, one of the things we can do right now is to try to, you know, to get some level of tax relief to allow remaining healthcare systems and health practices to stay viable, and that in turn should help, you know, attract and us, have us attract younger providers coming out of training.
And it should be reminded, of course, that, you know, all these training tracks for medicine, that they’re long. They’re long for nursing, they’re long for PAs. You know, for physicians, it’s four years of college, four years of medical school, a year of internship, three to five years of residency [laughs], and then it takes often another one, two years of fellowship.
So, you know, you’ve got almost like a 10- to 12-year track before people are even ready to, you know, to put out their shingle and start providing services. So, you know, there’s just simply no time to delay.
Akina: Well, that’s a huge investment. Scott, thank you very much for being with us today. I appreciate your expertise.
Grosskreutz: My pleasure.
Akina: My guest today on “Hawaii Together” has been Scott Grosskreutz. He’s with the Hawaii [Provider] Shortage Crisis Task Force, and as always, he understands the situation well and is able to explain it.
We really have to do something about the physician crisis, shortage crisis, as well as the shortage in personnel across the medical fields here in Hawaii.
Thank you for being with us. You’re watching “Hawaii Together” on the ThinkTech Hawaii broadcast network. Until next time, Aloha.