What One Health Hawaiʻi Has Not Yet Shown

Most of One Health Hawaiʻi’s promised benefits do not require integration. Before approval, HMSA and HPH should show what common governance uniquely adds and how it will expand care.

HHTF Staff · 2026-09-15

Policy Analysis

Most of the benefits HMSA and Hawaiʻi Pacific Health promise through One Health Hawaiʻi can be pursued without common ownership. What the proposed structure uniquely adds is common governance across Hawaiʻi's dominant commercial insurer and a major delivery system, and that additional concentration requires evidence before approval.

By Esther Y. Smith, MD

Hawaiʻi Healthcare Task Force

September 14, 2026

Key finding

Hawaiʻi's physician shortage establishes the urgency of fixing access, but it does not establish One Health Hawaiʻi as the solution. HMSA and HPH should identify which benefits actually require common governance, quantify those benefits, and explain why the additional concentration of control is necessary before approval.

For the Task Force's broader evidence record, see Our Position: The HMSA-HPH Merger . Our earlier analysis, One Health Hawaiʻi and the Medical Loss Ratio Question , examines what common control could mean for insurer-provider payments and financial incentives.

Hawaiʻi has a physician shortage. Dr. Stefanie Park, HMSA's vice president and chief medical officer, is right that we have been talking about it for years while patients have found it harder to get care. Primary care practices are struggling to stay open, specialty access is limited, and the population is aging into greater medical need. The disagreement is not about whether the system needs to change. It is whether placing HMSA and Hawaiʻi Pacific Health under a common parent has been shown to be a change that adds capacity. Park writes that "a change of this scale deserves hard questions, and we will keep answering them." We should take her at her word.

The promised benefits do not require common ownership

HMSA and HPH describe One Health Hawaiʻi as a way to make care more coordinated, easier to navigate, and more affordable. Their public materials promise "smoother processes between providers, clearer communication, less duplication," fewer duplicate tests, stronger access across the islands, better care management, and less administrative work. Park adds a candid point: "A structural change will not put a doctor in an exam room tomorrow." These are worthwhile goals. The most attractive of them do not require the proposed integration.

HMSA can reduce prior authorization without sharing a parent company with HPH. It can simplify its claims processes, remove unnecessary documentation requirements, improve primary care reimbursement, and reduce the administrative work it imposes on physicians. HMSA and HPH can exchange clinical information, coordinate referrals, build common clinical pathways, support telemedicine, participate in shared-savings arrangements, and develop joint care-management programs while remaining separate organizations. The ability to cooperate is not in dispute. What has not been demonstrated is why cooperation requires common governance.

HMSA already operates in a highly concentrated market

That distinction matters because common governance changes something that better coordination does not: the distribution of economic power in Hawaiʻi healthcare. The American Medical Association's 2025 competition study , using 2024 enrollment data, ranks Hawaiʻi's commercial insurance market the third most concentrated in the nation, behind only Alabama and Kentucky. HMSA holds 66 percent of the state's combined commercial market, Kaiser holds another 21 percent, and Hawaiʻi's Herfindahl-Hirschman Index is 4,890. The federal threshold used to identify a highly concentrated market is 1,800.

That concentration gives HMSA power in two directions. Employers and patients meet HMSA as the dominant seller of commercial insurance, while physicians meet it as the dominant buyer of their services. The second relationship matters greatly for independent practices. A physician may legally decline an HMSA contract, but the practical ability to walk away from a payer responsible for such a large part of the commercial market is very different from the bargaining position of a physician in a competitive insurance market.

The economic literature supports taking that buyer power seriously. Eric Roberts, Michael Chernew, and J. Michael McWilliams found in Health Affairs that insurers with market shares of at least 15 percent paid 21 percent less for office visits than insurers with shares below 5 percent when negotiating with the same provider groups. Leemore Dafny, Mark Duggan, and Subramaniam Ramanarayanan found in the American Economic Review that insurer consolidation raised premiums and produced evidence of monopsonistic power over physicians, including reductions in physician employment and earnings relative to other healthcare workers. Neither study measures what HMSA's position does to Hawaiʻi physicians. Both establish that insurer concentration affects bargaining power on the physician side of the market as well as the consumer side.

One Health Hawaiʻi would place that already dominant insurer under common governance with a major delivery system. Hawaiʻi Pacific Health operates four medical centers and more than 70 locations across Hawaiʻi. The concern is therefore not that two large organizations want to collaborate. The proposed structure would give a common parent interests in both the financing of healthcare and a substantial part of its delivery, while independent physicians and competing hospitals would continue to negotiate with HMSA for payment and compete with HPH for patients.

What the evidence says about healthcare integration

There is direct economic research on why insurer-hospital integration deserves scrutiny. José Ignacio Cuesta, Carlos Noton, and Benjamin Vatter studied vertical integration between insurers and hospitals and found that integrated insurers designed networks that favored their affiliated hospitals. Competing insurers responded by restricting access to integrated hospitals because of the risk that the integrated organization could raise their costs. In the market they studied, the efficiencies from integration were more than offset by distorted network design and weaker hospital competition, producing higher healthcare spending and lower welfare. Their data come from Chile, so the NBER study is not a forecast for Hawaiʻi. Its value is that it identifies specific mechanisms regulators should examine when an insurer and a delivery system come under common control.

The broader evidence on vertical integration also argues against treating consolidation as a presumed improvement. Alexandra Harris and colleagues reviewed 43 studies of hospital-physician integration and found it associated with higher healthcare costs, while effects on quality and utilization remained unclear. A second systematic review , by Bhagwan Satiani and colleagues, examined 37 U.S. studies published between 1990 and 2024. Thirteen of 14 studies examining prices reported increases, 13 of 16 examining costs or spending found increases or no improvement, and 20 of 26 examining quality found reductions or no improvement. These reviews primarily concern hospital-physician and hospital-hospital integration rather than the precise structure HMSA and HPH propose, which limits how directly they apply. They do establish that integration has not earned a presumption that it lowers costs or improves care.

Individual studies show how market power can consume the efficiencies integration is supposed to create. Cory Capps, David Dranove, and Christopher Ody found that prices for services provided by physicians whose practices were acquired by hospitals rose by an average of 14.1 percent . Integration of primary care practices was associated with a 4.9 percent increase in enrollee spending, and price increases were larger when the acquiring hospital held a greater share of its inpatient market. One Health Hawaiʻi is not a hospital acquisition of physician practices, and those percentages should not be projected onto Hawaiʻi. The study matters because it shows that organizational efficiencies do not automatically become savings for patients or employers when the same transaction also changes bargaining power.

There is favorable evidence for some forms of payer-provider integration, and leaving it out would make this analysis weaker, not stronger. A JAMA Health Forum study by Geronimo Bejarano and colleagues examined more than one million Medicare Advantage admissions for heart attack, heart failure, and pneumonia between 2015 and 2022. Patients admitted to hospitals that owned their Medicare Advantage plan had shorter stays, less intensive care use, lower inpatient and post-discharge mortality, and fewer readmissions than comparable patients in nonintegrated arrangements. The findings suggest that aligning insurer and hospital incentives can produce benefits in some settings. The study involved established hospital-owned Medicare Advantage plans and three acute conditions. It did not examine physician supply, independent practice viability, statewide access, or the creation of a new common parent over an already dominant commercial insurer.

Alignment does not require ownership

The distinction between alignment and ownership becomes sharper in Medicare's accountable care experience. Physician groups in the Medicare Shared Savings Program accepted responsibility for cost and quality without becoming part of an insurer-owned delivery system. In a New England Journal of Medicine study , physician-group ACOs produced progressively larger spending reductions than hospital-integrated ACOs. By 2015, physician-group ACOs that entered the program in 2012 had reduced Medicare spending by 4.9 percent relative to their comparison group, while the reductions in hospital-integrated ACOs were smaller and were offset by bonus payments on average. This is not evidence that an ACO will solve Hawaiʻi's access problem. It is evidence that financial alignment, data sharing, and shared responsibility for care can be built without common ownership of the organizations that finance care and the organizations that deliver it.

That leaves a basic question at the center of One Health Hawaiʻi. Which important benefits actually require the integration? The public materials explain what HMSA and HPH hope to accomplish through closer coordination. They do not separate the benefits that can be achieved through contracts, payment reform, interoperability, and shared infrastructure from the benefits that depend on placing both organizations under one parent. Without that separation, regulators, employers, physicians, and patients cannot tell which benefits require a permanent change in market structure and which could be achieved without it.

The same problem appears in the claim that integration will free money for care. Park describes the new parent as one "with no shareholders, no investors, and no sales price, so any value freed up goes back into care." That tells us where the money cannot go. It does not tell us how much money will actually be freed, how much the integration itself will cost, where the remaining money will go, or when patients should expect to see the result. Before projected efficiencies can support approval, HMSA and HPH should disclose the savings specifically attributable to common governance, the cost of creating and operating the new structure, and the net amount expected to remain.

If physician access is part of the justification, the analysis should then show how much of that money will reach physician capacity, where that capacity will be created, which specialties are expected to benefit, and when patients should see the difference. A general commitment to reinvest in healthcare does not answer those questions because hospitals, technology, reserves, facilities, administration, and expansion of employed physician groups are all healthcare expenditures. A dollar remaining in the healthcare system is not necessarily a dollar that creates another appointment for a patient who cannot find a doctor.

Independent physicians are part of the regulatory question

Independent physicians need particular attention because they sit at the intersection of HMSA's existing buyer power and HPH's position as a competing delivery system. Regulators should examine whether physicians outside HPH will receive the same reimbursement, administrative treatment, data access, and opportunities to participate in new payment models as physicians within the affiliated system. They should examine network design, referral patterns, and utilization management for the same reason. A competitive disadvantage does not have to arrive as an explicit exclusion. Small differences in payment, authorization burden, information flow, and referral friction can decide whether an independent practice remains viable.

HMSA and HPH say that "nothing about this partnership locks you into a single doctor, hospital, or insurance plan." That commitment is relevant, but an open network does not remove the economic incentives created by common ownership. The insurer-hospital integration research is useful precisely because it found competitive effects through network design even where the question was not simply whether a provider was formally included or excluded. Regulators therefore need to examine not only whether patients technically retain a choice, but whether the structure changes the relative economic position of the choices available to them.

What One Health Hawaiʻi still needs to prove

Hawaiʻi's physician shortage makes this analysis more urgent, not less, because the state has little room for a