The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the House Committee on Consumer Protection & Commerce on March 21, 2023.
March 21, 2023
Conference Room 329
To: House Committee on Consumer Protection & Commerce
Rep. Mark M. Nakashima, Chair
Rep. Jackson D. Sayama, Vice Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
RE: SB674 SD1 HD1 — RELATING TO THE INTERSTATE MEDICAL LICENSURE COMPACT
Dear Chair and Committee Members:
If this bill is enacted, the Legislature will take an important step toward addressing Hawaii’s doctor shortage, a problem that has existed for years and has become a serious obstacle to healthcare access in our state.
It is well established that Hawaii is suffering from a physician shortage. According to the most recent report from the Hawaii Physician Workforce Assessment Project, the state is currently short by approximately 776 full-time-equivalent physicians. While the greatest area of need is primary care physicians, the lack of specialists — especially in rural areas — is also severe.
Moreover, that shortage does not apply to only doctors. Across the state, and especially in rural areas, Hawaii is facing shortages of experienced health professionals, from primary care providers to nurses, specialists and staff.
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. Their licenses can be difficult to obtain, are expensive and carry geographic or “scope of practice” limitations.
As discussed in the Grassroot Institute of Hawaii’s new policy brief on medical licensing, “How changing Hawaii’s licensing laws could improve healthcare access,” 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.
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.”
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 doctor licensed in another state to practice in Hawaii.
The interstate compact approach outlined in this bill would streamline licensing for physicians, making it easier for doctors from participating states to practice in 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 doctors able to practice in Hawaii and shorten the time it would take for them to begin working here.
At present, the Interstate Medical Licensure Compact includes 37 states, the District of Columbia and Guam. Five 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.
According to the IMLC, its purpose is to serve as “an administrative clearinghouse of licensing and disciplinary information among participating member states and territories. The Commission does not have regulatory control over physicians or the practice of medicine. It neither issues nor revokes licenses. Its only purpose is to facilitate interstate cooperation and the transfer of information between member states and territories.”
Joining the IMLC 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.
Director of Strategic Campaigns,
Grassroot Institute of Hawaii
 “Annual Report on Findings from the Hawai’i Physician Workforce Assessment Project: Report to the 2023 Legislature,” University of Hawaii, December 2022, p.1
 Ryan Nunn, “Improving Health Care Through Occupational Licensing Reform,” RealClear Markets, Aug. 28, 2018
 Malia Hill, “How changing Hawaii’s licensing laws could improve healthcare access,” Grassroot Institute of Hawaii, February 2023, pp. 5-7.
 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.