SB320: Joining compact would expand access in Hawaii to psychologists

The following testimony was presented February 10, 2023, by the Grassroot Institute of Hawaii to the Senate Committee on Health and Human Services.

February 10, 2023
1 p.m.
Conference Room 225 and Via Videoconference

To: Senate Committee on Health and Human Services
      Sen. Joy A. San Buenaventura, Chair
      Sen. Henry J.C. Aquino, Vice Chair

From: Grassroot Institute of Hawaii
           Ted Kefalas, Director of Strategic Campaigns


Comments Only

Dear Chair and Committee Members:

The Grassroot Institute of Hawaii would like to offer its comments on SB320, which would enter Hawaii into the Psychology Interjurisdictional Compact (PSYPACT).

If this bill is enacted, the Legislature will take an important step toward encouraging more mental and behavioral health professionals to work in Hawaii.

The need for mental health professionals has been clearly demonstrated across the last three years. Last year, the state Department of Health reported that 11,000 Hawaii youth had a major depressive episode in 2019, but only half received mental health services.[1]

According to the Physician Workforce 2023 annual report, Hawaii has a 45.2% shortage of adult psychiatrists and a 42.8% shortage of child and adolescent psychiatrists.[2]

But the shortage extends far beyond psychiatrists alone. Hawaii employed 66 school psychologists in 2022 — for a ratio of one school psychologist for every 2,800 students. The National Association of School Psychologists suggests a 1 to 500 ratio.[3]

This shortage has caused burnout among Hawaii’s existing mental health practitioners.

“There are moments where I feel a little bit helpless, like I’m putting every joule of energy that I have in my body towards trying to make an impact on a problem that feels so insurmountable,” one provider told Hawaii News Now in 2021.[4]

Encouraging more counselors to practice in Hawaii requires a multipronged strategy that will address everything from Hawaii’s high cost of living to the state’s regulatory scheme for healthcare facilities. Perhaps most important is the need to reform licensing regulations for healthcare professionals.

One-fourth of all licensed workers in the U.S. work in healthcare.[5] Their licenses can be difficult to obtain, are expensive and carry geographic or “scope of practice” limitations.

As discussed in an upcoming policy brief on medical licensing by the Grassroot Institute of Hawaii, the state’s shortage of healthcare professionals makes its restrictions on healthcare workers who already hold licenses in other U.S. states seem redundant and self-defeating.

As the Federal Trade Commission noted in a report on occupational licensing portability:

There is little justification for the burdensome, costly, and redundant licensing processes that many states impose on qualified, licensed, out-of-state applicants. Such requirements likely inhibit multistate practice and delay or even prevent licensees from working in their occupations upon relocation to a new state. Indeed, for occupations that have not implemented any form of license portability, the harm to competition from suppressed mobility may far outweigh any plausible consumer protection benefit from the failure to provide for license portability.[6]

In other words, though medical licensing is intended to protect the public, there is a point at which the level of regulation reduces the number of people in practice without an appreciable public benefit.

One study of licensing among medical professionals found that “licensing is associated with restricted labor supply, an increased wage of the licensed occupation, rents, increased output prices, and no measurable effect on output quality.”[7]

This is where we can benefit from the lessons learned during the coronavirus situation. The governor’s emergency modification to state licensing laws demonstrated a need to embrace license portability, making it a simple matter for healthcare workers licensed in other states to practice in Hawaii.

The interstate compact approach outlined in this bill would streamline licensing for mental health professionals, making it easier for them to move from participating states to Hawaii without facing time-consuming, costly and redundant regulatory hurdles.

The state would retain its control over Hawaii licensure requirements, but would simultaneously increase the pool of psychologists able to practice in Hawaii and shorten the time it would take for them to begin working here.

At present, the Counseling Compact includes 31 states, the District of Columbia and the Commonwealth of the Northern Mariana Islands. Several other states have introduced legislation to join as well. Years of successful implementation testify to the safety and effectiveness of this approach to license reciprocity.

Joining PSYPACT would be an important step toward attracting more mental and behavioral health professionals to our state, thereby addressing mental health needs and improving healthcare access for all.

Thank you for the opportunity to submit our comments.

Ted Kefalas
Director of Strategic Campaigns,
Grassroot Institute of Hawaii

[1]Department of Health Encourages Move From Awareness to Acceptance for National Children’s Mental Health Month,” Hawaii Department of Health, May 2, 2022.

[2]Annual Report on Findings from the Hawai‘i Physician Workforce Assessment Project,” University of Hawaii System, Dec. 2022, p. 17.

[3] Jessica Terrell, “Hawaii Has A Shortage Of School Psychologists. National Research Says That’s A Problem,” Honolulu Civil Beat, Sept. 17, 2022.

[4] Jolanie Martinez, “As Hawaii faces a mental health crisis, psychologists struggle to keep up with patient demand,” Hawaii News Now, May 5, 2021.

[5] Ryann Nunn, “Improving Health Care Through Occupational Licensing Reform,” RealClear Markets, Aug. 28, 2018

[6] Karen Goldman, “Options to Enhance Occupational License Portability,” U.S. Federal Trade Commission, September 2018, p. 25.

[7] Sean Nicholson and Carol Propper, “Chapter Fourteen — Medical Workforce,” in “Handbook of Health Economics, Vol. 2,” Elsevier, B.V., 2012, p. 885, cited also in the previously mentioned FTC study, footnote #9, p3.

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