HB2415 HD1 could help end Hawaii nursing shortage

The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the House Committee on Consumer Protection and Commerce on Feb. 14, 2024.

Feb. 14, 2024, 2 p.m.
Hawaii State Capitol
Conference Room 329 and Videoconference

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


Aloha Chair Nakashima, Vice-Chair Sayama and Committee Members,

The Grassroot Institute of Hawaii would like to offer its support for HB2415 HD1, which would enter Hawaii into the interstate Nurse Licensure Compact.

Currently, 41 states and two territories are NLC members.[1] By joining the NLC, Hawaii would allow nurses holding a multi-state license to seamlessly transition to working in Hawaii without the need to obtain an additional license.

If this bill is enacted, the Legislature will be taking an important step toward addressing Hawaii’s nursing shortage — a problem that has existed for years and has become an obstacle to healthcare access in our state.

It is well established that Hawaii is suffering from a shortage of vital healthcare workers, especially nurses. A 2021 report from the Hawaii State Center for Nursing estimated that the state has 300 to 400 fewer nurses than needed to meet demand.[2] Research since 2021 has indicated that nearly one-fourth of Hawaii’s nurses have been considering leaving the workforce, largely due to the stresses caused by the COVID-19 crisis.[3]

Hawaii’s nurse shortage — which existed before the pandemic — has not eased since the COVID-19 emergency was lifted.  Across the state, especially in rural areas, Hawaii is facing shortages of experienced health professionals, from primary care providers to nurses, specialists and staff.

Fixing the shortage in healthcare workers 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.[4] Their licenses can be difficult to obtain, are expensive and carry geographic or “scope of practice” limitations.

In the Grassroot Institute’s policy brief “How changing Hawaii’s licensing laws could improve healthcare access,” we discussed how the state’s licensing restrictions make it difficult to attract new healthcare professionals to the state.

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.[5]

In other words, medical licensing is intended to protect the public, but 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.”[6]

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

The interstate compact approach outlined in this bill, HB2415, would streamline Hawaii’s licensing process for nurses, whereby registered nurses from participating states can practice in Hawaii without facing time-consuming, costly and redundant regulatory hurdles.

Under the NLC, a registered nurse would be able to hold one multistate license with a privilege to practice in other compact states.

Hawaii joining the NLC would be an important step toward attracting more registered nurses to our state, which would be an effective way to address our nursing shortage and improve healthcare access for all.

Thank you for the opportunity to testify.

Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii

[1] Tim McDonnell, “Travel assignments in 41 states on one nursing license: 2024 nurse licensure update,” RN Network, Jan. 10, 2024.
[2] Carrie M. Oliveira, “2021 Hawai’i Nursing Workforce Supply: Statewide Report,” Hawai‘i State Center for Nursing, 2021.
[3] Holly B. Fontenot, Alexandra Michel, Eunjung Lim, et al., “Impact of the COVID-19 Pandemic on the Hawai‘i Nursing Workforce: A Cross-sectional Survey,” Hawai‘i Journal of Health & Social Welfare, May 2022.
[4] Ryann Nunn, “Improving Health Care Through Occupational Licensing Reform,” RealClear Markets, Aug. 28, 2018
[5] Karen Goldman, “Options to Enhance Occupational License Portability,” U.S. Federal Trade Commission, September 2018, p. 25.
[6] 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 No. 9, p. 3.

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