Remove GE Tax from Medical Practices to Save Private MDs

State of Reform April 7, 2020 (excerpt)

… “So, from the Big Island we’re very much in a state of crisis there. We have a 44% shortage of physicians on the Big Island. About 230 doctors is the number of physicians that we’re short of and of the remaining practicing physicians 32%, or basically a third of the remaining doctors, are 65 years old or older.

It’s very hard to recruit new physicians into the community. We’re in a position where private practice is basically on the verge of going extinct. The margins in order to practice profitably with a small practice, which is a small business of course, are so low that with additional pressures — like the GET tax and the low Medicare reimbursements along with the high cost of providing care — it’s basically preventing any new physicians from coming in. And unfortunately, as the older physicians start to retire or have health conditions of their own, we’re entering a state of a period where some of the health care bones of the Big Island are starting to collapse…

…We have gotten together a task force, a physician shortage crisis task force, that’s comprised of community physicians, the 50-member independent physicians association of East Hawaii, and hospital-based physicians. And so, we have four former chiefs of the medical staff at Hilo Medical Center, for example, on our team and we’re looking at what’s happening globally. We’re talking among ourselves and we’re trying to advocate for solutions. We have already worked with our congressional delegation in Washington, particularly Representative Ed Case, in order to inform CMS why our rates are so low compared to other high-cost states like Alaska, and that’s had some success already.

We’re also reaching out to the legislature and stating that the general excise tax of 4.7% with the county surcharges basically strips a lot of these narrow-margin medical practices and puts them into the red. So, if the GET and the surcharges were applied to the hospital system, our understanding from talking to the Healthcare Association of Hawaii is that most if not all hospitals in Hawaii would be in the red and would have to either limit services or possibly close. So, if the state legislature agreed that the GET tax on hospitals and hospital-employed physicians is a bad idea because would it cause collapse of that portion of the sector, why would you apply it to community-based physicians?” …

read … What They’re Watching: Dr. Scott Grosskreutz

Background: No GE Tax on Medical Bills -- help lift MD shortage

HB2228: Text, Status