The proposed consolidation of healthcare in Hawaii, particularly between Hawaiʻi Pacific Health and HMSA, is a pressing issue that demands immediate attention from Governor Josh Green. The lack of access to healthcare providers and services is not just a policy debate but a painful reality for many residents of Maui. Dialysis patients are scheduled at odd hours, cancer biopsies are delayed, and families are forced to leave the island for necessary care. These problems are not due to geography or bad luck but are the predictable outcome of policy choices, including consolidation, supply-restricting regulations, low reimbursement rates, and market structures that favor large institutions over competition. The human toll on health, families, and livelihoods is real and growing, and it is essential to understand the forces shaping Maui's healthcare system.
At the heart of this crisis are three interconnected forces: Certificate of Need laws, increasing consolidation of hospitals and insurers, and the emergence of a two-tier healthcare system. Certificate of Need laws, intended to prevent unnecessary duplication and protect communities from low-quality providers, have restricted the development of essential services like imaging centers, dialysis facilities, surgical centers, and operating rooms, even when demand is high and urgent. This has led to measurable consequences, with Maui having only one major hospital system compared to four in Little Rock, Arkansas, a city with a similar population. The result is rationed care, growing waitlists, and services like emergency care being prioritized over community-based diagnostics and elective but medically necessary procedures.
Consolidation compounds the damage, creating a two-tier system where Kaiser, a vertically integrated model, tightly controls access and frequently routes patients to Oahu for even relatively simple studies. On the other hand, a dominant hospital ecosystem with little competition and limited incentive to expand community-based services exacerbates the problem. Patients experience delays, substitutions, and denials, with colonoscopies replaced by stool tests and imaging deferred or postponed. The proposed integration between Hawaiʻi Pacific Health and HMSA would intensify this dynamic, concentrating pricing power, reducing transparency, and squeezing independent providers out of the market.
The ripple effects of healthcare consolidation impact the entire economy. When healthcare costs rise and access shrinks, small businesses and trades suffer. Electricians, plumbers, farmers, contractors, and other small employers are legally required to provide or purchase health insurance, and in a monopolized market, premiums rise faster than income. This forces small businesses to cut staff, limit growth, or close altogether, making independence unaffordable. Independent operators and workers are pushed into corporate employment, and even large employers, including hotels, are increasingly strained by rising healthcare costs.
These outcomes are not accidental but the result of a market-driven framework adopted by the Affordable Care Act, which shifted healthcare away from a relational model centered on the patient and their doctor toward a transactional subscription model. Control shifts upward, consolidation accelerates, and local-led care weakens. The same logic appears across the economy, with subscribers replacing owners, renters replacing homeowners, and employees replacing independent operators and business owners. The governor has real authority to address this situation, particularly in the short term, by imposing enforceable guardrails on healthcare consolidation, opening Hawaii's insurance market to competition, ending 'paper capacity' by requiring approved projects to be built, enforcing network adequacy laws, and aggressively pursuing a higher Medicare Geographic Practice Cost Index to ensure physicians can afford to practice in Hawaii, especially on the neighbor islands.
The stakes are high, not just for healthcare but for the survival of Hawaii's families, private practitioners, tradespeople, and small businesses. Healthcare consolidation is a powerful driver of rising healthcare costs, and through those costs, it consolidates control over the rest of the economy and trades, especially under current mandates imposed on employers and individuals. Private equity firms and large nonprofit and for-profit corporations are already exploiting the asymmetric and inescapable demand for healthcare to extend control to other trades and livelihoods. The affordability of goods and services we rely on is at stake, affecting housing, food, safety, and people's ability to retain real ownership over their lives.
