***Call to Action*** Supporting SB397 and SB1035, if not heard this week, these bills will die
Posted about 1 year ago
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Aloha HAPN,
The House Committee on Finance needs to hear bills SB397 (increasing Quest reimbursement) and SB1035 (remove General Excise Tax from Medicare, Medicaid, and TriCare) this week or these bills die for this session. Attached is a sample letter that you can use (and make unique to you) and submit for testimony.
Our Neighbor Island providers have been understaffed for many years and the stress of long hours and the struggle to meet the needs of our communities has been real. Several organizations are working to support our rural and community based healthcare medical practices.
As providers, we understand that the small businesses providing medical care in Hawai’i are under tremendous pressure. If more private physician and APRN practices close, then many more patients will be going to the ER for primary care, with frequent late stage diagnosis of diseases that will often will require hospitalizations.
We need strong hospital systems, but more patients flooding the hospitals will inevitably require even more tax payer funding to cover their care. In effect the State of Hawai’i taxes private practices into insolvency, and then is required to increase fiscal support to hospitals. It is something of a shell game.
Below is a message from Dr. Scott Grosskreutz with more Information.
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Good Morning,
To date we have successfully drafted and introduced SB1035, passing the Senate unanimously and passing all Senate and House committees which heard that measure without a no vote. We have many allies supporting this bill. There have been many Task Force members working to advocate and educate lawmakers and government officials.
-The House Finance Chair, by declining to hear the House companion bill HB662, is obviously not in favor of hearing SB1035 and is philosophically opposed to further GET exemptions. He did however state that he would considering hear this bill if it passed HLT/ECD.
-The House Finance Chair, by declining to hear the House companion bill HB662, is obviously not in favor of hearing SB1035 and is philosophically opposed to further GET exemptions. He did however state that he would considering hear this bill if it passed HLT/ECD.
-The viewpoint of the Department of Taxation is evolving favorably thanks to education and outreach effect by individuals. Their public information that providers can pass the GET tax to Medicare and TriCare patients has been removed from their website. DOTAX had published an OpEd opposed to a GET exemption for healthcare, but now is neutral to SB1035 and they feel this bill is enforceable and manageable in terms of costs. Well done!
-I spoke with Hilton Raethel of Healthcare Association of Hawai’i today. I asked whether HAH would support SB1035 and lobby for us. He promised to talk to their legislative team and if they have a followup zoom meeting, I’ll ask that Robin and others interested can participate. Hilton was glad that DOTAX thought the bill cost was manageable. They did not make SB1035 a priority because they did think it would get very far. Now that SB1035 has been passed unanimously by the Senate and by all other House and Senate committees, HAH may go to bat for the bill.
At the least, I told Hilton that if SB1035 is deferred or not heard by FIN, Hawai’i is likely looking at further rapid declines in private medical practices, and the hospital systems have to ready to absorb as many providers as possible, as these private practices fold.
- Our Native Hawaiian colleagues have provided supporting testimony for SB1035. We hope that more support in terms of lobbying the Finance Community to hear the bill might be helpful from patients, AARP members, veterans and our underserved communities in Hawaii.
Task Force member Robin Rohr submitted this testimony, which has been shared with FIN:
Hawaii has severe shortages of physicians, nurses and other healthcare providers. The doctor shortage has been estimated between 750-1000 in recent years by the University of Hawai’i Area Health Education Center. Hawaii’s ruinous taxation of healthcare by the GET is contributing to Hawaii’s access to care crisis, and to excess mortality on our Neighbor Islands and rural areas.
Hawaii is the only U.S. state that taxes healthcare providers for caring for Medicare, Medicaid and TriCare. Nationwide medical providers report losing providing services to Medicaid, and often break even caring for Medicare patients. Even if SB397 passes, raising Medicaid reimbursements to Medicare levels, the 4.7% GET taxation of gross revenues, will ensure that many private practices in Hawaii will be fiscally insolvent.
Hawaii has been ranked dead last in 2023, as worst state to practice medicine, behind all other U.S. states, and the District of Columbia. Many of our providers are in their late 60’s and 70’s and working 60 or more hours a week, as there are not enough doctors to provide medical care. Soon our watch will have ended, and our state needs more than a thousand physicians, nurses, APRNs and PAs to replace us on the front lines of patient care.
For the second time since the 2020 session, the Hawai’i State Senate and all other House and Senate Committees have unanimously passed legislation to exempt doctors, APRNs and PAs from the GET. If the House Finance Committee again fails to hear and pass SB1035, then many more private medical practices will close their doors for good. This would likely be the final mail in the coffin for the private practices in Hawai’i, and would effectively eliminate the small business providing patient care in our state. The post mortem analysis will be discussed for years in the local and national press.
If Hawai’i loses another 500 private practice providers, each caring for 2000 patients, that would be another one million of our residents with limited access to healthcare. The resulting excess mortality would likely be in the thousands statewide. If the House Finance Committee decides to eliminate all GET exemptions, like those already existing for hospitals and hospital employed providers, our hospital systems would similarly collapse. This would cause tens of thousands of additional deaths.
Hawaii must recruit and retain many new healthcare professionals. We’re number 51 makes for a terrible recruiting campaign. The lives of our ohana are quite literally in the balance. The House Finance Committee must take 20 minutes of your time to consider and pass SB1035 to avoid severe repercussions on the health of our community.
The tragic irony is that if SB1035 isn’t passed, then the number of healthcare providers in private practice will continue to plummet over the next 3-5 years trending GET revenues from taxing those caring for the elderly, economically disadvantaged and military veterans to zero. In that worst of all possible worlds, Hawai’i will have both a broken healthcare system and less GET revenues.
As FIN appears to be indifferent as to the GET’s impact on individual medical practices and our patients, this email was shared to reinforce the benefits of SB1035 for different communities:
Economic, budgetary and medical reasons to pass SB1035 on GET exemption for healthcare
There are over 100 pages of testimony in support of reforming Hawaii’s unfortunate status as the only state in the nation taxing healthcare providers caring for Medicare, Medicaid and TriCare patients. Legislative Committees have different areas of expertise and oversight, and it may be useful to understand why reform of GET taxation in Hawai’i is important for these different committees.
House Health and Homelessness and Senate Health and Human Services Committees:
The Healthcare Association of Hawai’i has noted that if hospitals and hospital based providers were taxed by the GET, that many hospitals may have to close or reduce services. GET taxation of Hawai’i private practice providers has been ruinous and is contributing to a rapid decrease in the number of private medical practices and Hawaii’s chronic shortage of healthcare providers. Lack of access to healthcare contributes to significantly higher mortality rates for cancer, cardiovascular disease, suicide, trauma, adolescent deaths, asthma and COPD and hepatitis C on the Neighbor Islands.
Senate Committee on Commerce and Consumer Protection:
Small businesses providing medical services in Hawai’i provide much of the patient care on our Neighbor Islands and rural areas. The continuing loss of these small medical businesses damages Hawaii’s business environment and harms consumers, who do not have access to medical care. In many economic sectors, paying for goods or services and not receiving those services would be considered fraud. Currently many in Hawai’i are paying for their health insurance, but unable to access needed medical care.
House Committee on Economic Development:
Having a viable healthcare system is critical to the economic development of our island communities in Hawai’i. Traveling to other islands or the mainland for healthcare is difficult and expensive. Hawaii has been losing population for years, and many of those leaving are young adults and those with much needed job skills. The lack of access to healthcare in a major driver of Hawaii’s population exodus, with 20% of residents considering moving to another island or leaving the state due to healthcare woes, according to a recent statewide access to care survey. The Maui and Hawai’i Island Chambers of Commerce support SB1035 for GET reform because businesses will choose to go elsewhere, when their workforce cannot get medical care.
Senate Committee on Ways and Means and House Finance Committees:
In order to preserve budget surpluses, the taxation of industries needs to be sustainable. GET taxation of the gross income of private medical providers, when they lose money providing services for Medicaid patients and often break even caring for Medicare patients, results in a growing number of fiscally insolvent medical practices. As these providers retire, leave medicine or move, few younger providers will take their place in our local communities. This will result in ever fewer providers left to tax in Hawai’i, and will trend GET revenues toward zero over the next 3-5 years. Hawaii will also lose the revenues from income, corporate, property from the missing healthcare providers and the secondary GET taxation on all the purchases that they would have been made.
For these reasons, SB1035 has been passed by an unanimous votes at all committee hearings to date.
Mahalo to Dr. Eugene and Audrey Lee for offering some sample letters and templates to contact Finance Committee members to ask them to hear SB1035. Please join others in asking for the democratic legislative process to be responsible in Hawai’i by hearing a measure with unanimous support to date.
Aloha, Scott
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