SB323: Bill could ease Hawaii’s shortage of occupational therapists

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 SB323, which would enter Hawaii into the Occupational Therapy Licensure Compact.

If this bill is enacted, the Legislature will take an important step toward encouraging more occupational therapists and occupational therapist assistants to practice in Hawaii.

A 2015 study reported that, “As the baby boomer generation retires in growing numbers, the demand for occupational therapists specializing in geriatrics will be particularly strong.” However, it also predicted that Hawaii would have one of the worst shortages of occupational therapists in the country by 2030.[1]

Fixing the problem 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.[2] 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.[3]

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.”[4]

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 a healthcare professional licensed in another state to practice in Hawaii.

The interstate compact approach outlined in this bill would streamline licensing for occupational therapists and occupational therapy assistants, 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 therapists able to practice in Hawaii and shorten the time it would take for them to begin working here.

At present, the OT Compact includes 23 states.[5] Almost a dozen additional 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 the OT Compact would be an important step toward attracting more doctors to our state, thereby addressing our physician shortage 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] Vernon Lin, Xiaoming Zhang and Pamela Dixon,  “Occupational Therapy Workforce in the United States: Forecasting Nationwide Shortages,”  PM&R, September 2015.

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

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

[4] 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.

[5]Compact Map,” OT Compact, accessed Feb. 8, 2023.

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