Hawaii's Healthcare System: A Mixed Bag of Success and Challenge

Strategic Insights -

Hawaii's healthcare system is a success story with the highest health insurance coverage rate in the nation, thanks to its employer mandate. However, despite this accomplishment, the system still faces challenges in providing universal access to care, including a lack of providers in certain areas and a limited willingness among some private providers to serve Medicaid patients. The state's unique circumstances, such as its island geography and high cost of living, contribute to these challenges.

Key Takeaways:

  • The Hawaii healthcare system's employer mandate has not provided universal access to care, despite achieving the highest health insurance coverage rate in the nation.
  • The system has helped control insurance premiums but has not fully controlled costs, with per capita health care costs rising at a rate similar to the national average.
  • The 1974 Prepaid Health Care Act requires employees to pay half the premium cost or 1.5% of their gross wages, whichever is less, which has contributed to lower premium costs.
  • The system's mix of employer mandate and public programs has led to reduced uncompensated care, but providers complain about low compensation from public programs such as Medicaid.
  • Small businesses are satisfied with the system but complain about its lack of flexibility, including the requirement that they cover most of the premiums.
  • The state's certificate-of-need requirements for hospital construction, changes in service, and major capital equipment purchases have contributed to cost control.

Statistics:

  • Health insurance coverage rate in Hawaii: 91-94% (1991)
  • National average health insurance coverage rate: 85.9% (1991)
  • Uninsured population in Hawaii: 3.9-7% (1991)
  • National average uninsured population: 14.1% (1991)
  • Rise in per capita expenditures for hospitals, physicians, and prescription drugs in Hawaii: 9.8% (between 1980-1991)
  • Rise in per capita expenditures for hospitals, physicians, and prescription drugs in the nation: 9.4% (between 1980-1991)
  • Number of mandated benefits in Hawaii: 5 (since 1974)
  • Premium costs for three prevalent health plans in Hawaii: $358-$396 less than the US average (1991)

Sources:

  • General Accounting Office report, "Health Care in Hawaii: Implications for National Reform" ( researched July to November 1993)
  • Hawaiian state health department
  • U.S. Current Population Survey
  • President Clinton's proposals for healthcare reform
  • Rep. Pete Stark's (D, Calif.) proposals for healthcare reform
  • Interviews with providers and small businesses