Physician Workforce Collapse in Hawaiʻi: Structural Causes and Policy Remedies

Hawaiʻi's physician workforce is short 833 FTE when geography counts. A clinician-led brief on the structural causes — GET, Medicare GPCI, housing — and five policy remedies.

HHTF Staff · 2026-05-28

Executive Summary

Hawaiʻi’s physician workforce is in crisis: only 3,647 of 12,688 licensed physicians are providing patient care, resulting in a shortfall of 644 FTE under standard modeling and 833 FTE when accounting for geography and specialty. In 2025, over 88 physicians left the state and 81 retired, while maintaining current levels would require adding 100 physicians per year to offset attrition. The primary policy response to physician recruitment focuses on supply entry but not on the structural factors driving departures: a unique tax on private practice revenue, below-national Medicare reimbursement rates, and a high cost of living that makes practice economically unviable for many. The Hawaiʻi Healthcare Task Force urges the Legislature, the Department of Health, the Med-QUEST Division, and federal partners to prioritize retention and to fund an independent workforce intelligence infrastructure to monitor and manage workforce conditions at the island level.

Background and Current Workforce Status

According to the 2026 JABSOM Physician Workforce Report, Hawaiʻi has 12,688 licensed physicians, of whom only 3,647 provide patient care. Adjusted for full-time equivalents, the 2025 practicing FTE count was 3,044. This results in a statewide shortfall of 644 FTE under standard modeling, increasing to 833 FTE when accounting for specialty and geographic distribution across six islands.

County-level deficits are severe. Hawaiʻi County (the Big Island) needs 224 more physicians, a 43% increase from its current base. Maui County requires 179 additional physicians and has the largest primary care deficit, with 45 fewer primary care physicians than needed. Statewide, primary care is 178 FTE below documented demand.

These are not projections. They are the current, measured conditions as of the most recent reporting period.

The Demographic Pressure Is Not Future Tense

Twenty-five percent of Hawaiʻi’s practicing physicians are 65 or older. The anticipated retirement wave is now causing measurable attrition: in 2025, over 81 physicians retired, and more than 88 left the state. The 2026 JABSOM Physician Workforce Report indicates that Hawaiʻi must add 100 net physicians per year to offset attrition to meet demand, a target not achieved in recent years.

The 2030 outlook, modeled by researchers published in the Brown University Journal of Public Health, is a Grade D physician shortage. The trajectory is well established and internally consistent across multiple independent analyses. The question before policymakers is not whether this is real. It is what structural interventions can change.

Why Recruitment Alone Has Not Worked

Hawaiʻi has implemented physician recruitment programs through state agencies, hospital systems, and its medical school pipeline for years. Despite these efforts, the JABSOM 2026 Physician Workforce Report shows a continued decline in the workforce. The underlying causes are structural, not programmatic.

Physicians trained in Hawaiʻi and those recruited from the continental United States face three major disadvantages in the local market:

First: The General Excise Tax. Hawaiʻi is the only state that applies a gross receipts tax to private physicians' revenue, with a combined rate of 4.5% (4% state and a 0.5% county surcharge). Physicians cannot pass this tax to Medicare and Medicaid patients and must absorb the cost. According to the Brown University Journal of Public Health, the effective burden is 15-20% of average family practice revenue when payer mix is considered. Act 47, signed by Governor Green on June 3, 2024, exempts Medicare, Medicaid, and TRICARE reimbursements from GET starting January 1, 2026. However, GET on commercial insurance revenue remains in effect.

Second: Below-national Medicare reimbursement. Hawaiʻi’s Geographic Practice Cost Index is 1.06, compared to Alaska’s 1.5. Despite high living and practice costs, Hawaiʻi’s Medicare reimbursement adjustment does not reflect these expenses. The pending PATCH Act would address this disparity. Without it, Hawaiʻi physicians receive less per Medicare encounter than peers in other high-cost states, while incurring higher costs.

Third: Housing cost. Median home prices in Honolulu exceed $900,000. Physicians completing residency with $200,000-$300,000 in student loan debt face significant financial challenges due to local tax and reimbursement conditions, leading many to practice elsewhere. The National Health Service Corps loan repayment program provides about $75,000 over two years, which does not offset Hawaiʻi’s cost-of-living gap. The JABSOM physician survey identified higher pay as the most important factor for recruitment and retention.

Recruiting physicians under these conditions leads to high turnover. Retention requires addressing these underlying issues.

Geographic Asymmetry: The Neighbor Island Dimension

The statewide figures understate the crisis on individual islands. JABSOM’s Area Health Education Centers analysis documents neighbor island physician supply running 30-43% below Oʻahu levels. This asymmetry compounds because the structural incentives for physician practice concentration favor Oʻahu: that is, where the hospitals, specialist communities, family infrastructure, and commercial amenities are concentrated.

When a physician leaves or retires on the Big Island or Maui, there is often no qualified local replacement available. Patients on Maui, facing a 45-physician primary care deficit, cannot turn to nearby communities and must wait, defer care, or travel. Each departure from a neighbor island has a greater impact than a similar departure from Oʻahu, where some substitution is possible.

Statewide workforce planning obscures island-specific challenges. Hawaiʻi requires island-level workforce modeling and deployment strategies. HHIP’s federated data architecture enables analysis of island-specific supply and demand, providing more accurate metrics than statewide averages.

On December 29, 2025, Hawaiʻi received a $188,892,440 five-year award from the federal Rural Health Transformation Program. This is the largest recent federal investment in rural and neighbor island healthcare infrastructure and acknowledges the state’s geographic and structural challenges.

The RHTP award supports infrastructure modernization, including telehealth expansion, community health worker deployment, and healthcare system coordination. However, it does not address the GET structure, Medicare GPCI, or the housing market. These limitations reflect the different categories of challenges: infrastructure versus the structural issues driving physician departures. Both require policy action. Federal investment and state structural reform must work together.

What We Are Asking

Extend the GET reform to commercial revenue. Act 47 exempts Medicare, Medicaid, and TRICARE reimbursements starting January 1, 2026. The Legislature should also exempt commercial insurance reimbursements for private practice physicians, as the structural rationale applies equally to commercial payers.

Support the PATCH Act at the federal level. The state’s congressional delegation should actively advocate for the Protecting Access to Care through Honest reimbursement (PATCH) Act to adjust Hawaiʻi’s Medicare GPCI to reflect actual practice costs. This federal legislation addresses a formula that specifically disadvantages Hawaiʻi.

Fund island-level physician workforce planning. The Legislature should require the Department of Health to fund and publish annual island-specific analyses of physician supply and demand, rather than statewide aggregates. Statewide numbers currently mask the severity of conditions on neighbor islands.

Increase the state loan repayment ceiling. The current program does not bridge the cost-of-living gap that makes Hawaiʻi financially uncompetitive for physicians with medical school debt. The Legislature should design and fund a repayment supplement that reflects Hawaiʻi’s actual cost differential rather than relying on continental benchmarks.

Establish a physician retention measurement system. Hawaiʻi tracks new physician licensure but does not systematically monitor physician departures, practice closures, or reasons for leaving. HHIP can provide the necessary infrastructure. The Legislature and Department of Health should formally support independent workforce intelligence as a public good.

Coordinate RHTP investment with workforce strategy. The $188.9 million in federal RHTP funds should be used in alignment with physician workforce retention goals. Infrastructure investment without a corresponding workforce results in facilities without providers. Both strategies must be coordinated.