HOUSE OF REPRESENTATIVES	H.C.R. NO.	136
THIRTIETH LEGISLATURE, 2020
STATE OF HAWAII

HOUSE CONCURRENT

RESOLUTION

REQUESTING THE LEGISLATIVE REFERENCE BUREAU TO CONDUCT A STUDY ON THE PHYSICIAN WORKFORCE SHORTAGE IN HAWAII BY ANALYZING THE PARKER IMMUNITY DOCTRINE AND THE FEASIBILITY OF ENACTING STATUTORY AUTHORITY FOR COLLECTIVE NEGOTIATION BETWEEN PHYSICIANS AND HEALTH CARE INSURERS IN THE STATE.

WHEREAS, the healthcare system in Hawaii is in crisis because of the severe shortage of physicians in the State; and

WHEREAS, according to the recent Hawaii Physician Workforce Assessment Project study conducted in 2020 by the Area Health Education Center of Hawaii at the University of Hawaii, the gap between supply and demand for doctors in Hawaii has grown by sixty-five percent since 2010; and

WHEREAS, the biannual Hawaii Physician Workforce Assessment Project study also reported a current shortage of eight hundred twenty physicians statewide, with the neighbor islands hardest affected; and

WHEREAS, there is a physician shortfall of sixteen percent on Oahu, compared with a forty-four percent shortfall for the island of Hawaii, thirty-six percent for Maui County, and thirty-two percent for the island of Kauai; and

WHEREAS, the physician shortage is due to the State's increasing inability to recruit and retain physicians, which poses a serious problem for Hawaii residents as the shortage prevents timely and appropriate access to life-saving healthcare; and

WHEREAS, a primary barrier to recruiting and retaining physicians is the fact that physician compensation in Hawaii is relatively low and not competitive nationally, as evidenced by Hawaii's inability to attract qualified out-of-state physicians or retain graduates from the John A. Burns School of Medicine located in Honolulu, Hawaii; and

WHEREAS, a major factor in the relatively low compensation for Hawaii's physicians is the State's highly concentrated health insurance market; and

WHEREAS, an examination of the Hawaii insurance market by the American Medical Association entitled Competition in Health Insurance: A Comprehensive Study of U.S. Markets (2019) reveals a highly concentrated total insurance market, with a single insurer controlling sixty-seven percent of the total market and its second-largest insurer controlling twenty-one percent; and

WHEREAS, the American Medical Association ranked Hawaii the third least competitive health insurance market in the nation, behind only Alabama and Louisiana; and

WHEREAS, highly concentrated health insurance markets are said to cause disparate, imbalanced, and monopsonistic market power between insurers and independent physicians providing health care services; and

WHEREAS, in addition to market concentration, the relatively weak bargaining power of physicians compared to health insurers is also a result of federal antitrust law, which generally bars physicians from collectively negotiating their contracts with insurers and contributes to the monopsonistic market favoring insurers; and

WHEREAS, independent physicians contend that monopsony power enables health plans to approach contract negotiations with a "take-it-or-leave-it" attitude that puts physicians in the untenable position of accepting inappropriate and adhesive contract terms; and

WHEREAS, in Parker v. Brown, 317 U.S. 341 (1943), the United States Supreme Court created an exemption to the federal antitrust laws referred to as the State Action Doctrine or the Parker Immunity Doctrine, and authorized state actions that could foreseeably cause anti-competitive effects when taken pursuant to a clearly expressed and legislatively adopted state policy; and

WHEREAS, in 2009, the Alaska Legislature found that permitting physicians to engage in collective negotiation of contracts with health benefit plans to be appropriate and necessary to benefit competition in the healthcare market, and adopted a statute consistent with the Parker Immunity Doctrine to authorize collective negotiations between competing physicians and health benefit plans; and

WHEREAS, it is appropriate and necessary for the State to consider authorizing physicians to collectively negotiate their contracts with health benefit plans to address the physician shortage crisis in Hawaii; now, therefore,

BE IT RESOLVED by the House of Representatives of the Thirtieth Legislature of the State of Hawaii, Regular Session of 2020, the Senate concurring, that the Legislative Reference Bureau is requested to conduct a study on the physician workforce shortage in Hawaii by analyzing the Parker Immunity Doctrine, including its current legal status and the extent of any statutory or policy implementation by other states, and the feasibility of enacting statutory authority for collective negotiation between physicians and health care insurers in the State; and

BE IT FURTHER RESOLVED that the Legislative Reference Bureau is requested to submit a report of its findings and recommendations, including any proposed legislation, to the Legislature no later than twenty days prior to the convening of the Regular Session of 2021; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the President of the Senate, Speaker of the House of Representatives, and Director of the Legislative Reference Bureau.

OFFERED BY:

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Report Title:

Physician Workforce Study; Parker Immunity Doctrine; LRB; Study