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Hawaii survey says doctors struggling under new payment plan

HONOLULU — A survey of Hawaii primary health care providers reveals struggles to stay in business following changes to compensation by the state’s largest insurer.

More than 80% of providers surveyed believe the Hawaii Medical Service Association payment system is putting physicians out of business, Hawaii Public Radio reported Thursday.

The study was conducted by health policy organization Aimed Alliance based in Washington, D.C. and funded by the Atherton Family Foundation in Honolulu.

“The big concerns are that the pay was too low and they felt this disincentivized them to practice medicine and that it was contributing to provider shortages that were already occurring in Hawaii,” Aimed Alliance counsel Stacey Worthy said.

The study surveyed 60 primary care providers in the association’s payment transformation program and found a majority believed the program caused an increase in administrative tasks, resulting in longer hours and higher staffing costs.

“We found that it was causing financial stress on primary care providers and it is also increasing administrative costs, which trickle down the health care system,” Worthy said.

Worthy added: “In particular, those with practices of fewer than five providers were more than twice as likely to express that sentiment than those working in large practices, hospitals or health systems.”

The survey was the first independent study concerning the payment model known as capitation, or payment transformation.

Doctors have traditionally been reimbursed for services under a “fee-for-service” model in which physicians provide services such as annual check-ups and the insurer then pays the doctor.

Under the Hawaii Medical Service Association’s compensation program launched five years ago, the insurer pre-pays primary care doctors with capped amounts per patient.

More than 36% of those surveyed said they have referred patients to urgent care clinics instead of treating them as a result of payment transformation.

Hilo family physician Michelle Mitchell was not surprised by the studyʻs findings.

“I think this is just confirming what we already know,” Mitchell said. “More and more physicians are leaving practice and leaving Hawaii in general as a result. And I actually think these results not only confirm that but likely underestimate that.”


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