The failing health of many private medical practices in Hawai'i is driving physicians out of the state, leaving patients with fewer choices of doctors, longer waits for appointments and delayed care.

The situation is worse in rural areas and on the Neighbor Islands, where doctors handle a higher percentage of uninsured and low-income patients and face what some call unreasonable on-call hours because there are fewer colleagues to share the load.

Hawai'i County Mayor Harry Kim sent a letter Jan. 16 to the Legislature calling the growing shortage of primary-care doctors, cardiologists and other specialists a long-overlooked crisis. And Gov. Linda Lingle, in her State of the State address, called for malpractice tort reform to limit non-economic damages for pain and suffering and for other action to help the medical community.

Complaints about health insurance reimbursements that aren't keeping pace with rising costs and about skyrocketing malpractice premiums are heard across the country, but doctors here say conditions in Hawai'i are particularly hostile to the business of medicine, and many are deciding it's just not worth it anymore.

Obstetrician Dr. Cindy Mosbrucker left her practice at Castle Medical Center in August after eight years, moving to Bend, Ore., a small community similar in character to Windward O'ahu but where business and living costs are much lower.

"Everything boiled down to the cost of living in Hawai'i and the fact that our (Medicare) reimbursements kept going down and the cost of our malpractice insurance and everything else kept going up. It became obvious to me I couldn't make enough money to be able to retire. I would be working forever," Mosbrucker said.

She said pediatricians and family-practice physicians in the Islands earn about $100,000. "When you compare that to what bus drivers make, and when you look at the amount of time you spend in training and dedicating to your practice, and the amount of risk you take, and the amount of skill it takes to do what you do, and you're carrying around a pager 24/7, $100,000 isn't a lot of money anymore," she said.

"Doctors here make half of what they make anywhere else on the Mainland."

Windward Orthopedic Group, which has offices in Kailua and Kane'ohe, is losing its second full-time physician in less than a year, leaving only two full-time surgeons and a part-time surgeon. The loss means the group may have to close one of its offices, said Dr. Linda Rasmussen.

In the past 10 years, the number of orthopedic surgeons in the state has dropped from 68 to 48, she said, with only four full-time orthopedic surgeons each working on the Big Island, Maui and Kaua'i.

"Once these doctors leave, they're not coming back, and you can't get young guys to come," said Rasmussen, who is president of the Hawai'i Medical Association, a nonprofit advocacy group representing physicians.

Despite the public perception that doctors are affluent, many private-practice physicians are earning only $50,000 to $60,000 a year after costs, she said.

"For me, I pretend I'm in a Third World country doing my community service and I get by," Rasmussen said.

Newly minted doctors leaving medical school with substantial college loans can't afford to be so generous, she said.

SOME BRIGHT SPOTS

Not all medical fields or geographic locations are experiencing a physician shortage.

Doctors are relatively plentiful in Honolulu, and cosmetic surgeons and others with a large percentage of patients who pay for services out of pocket are in better shape than most because they are less dependent on insurance reimbursements, Rasmussen said.

There are other factors. For example, the 390 doctors who work for Kaiser Permanente Hawai'i generally are faring well because as employees of the health maintenance organization they earn salaries and do not have to pay for their malpractice premiums or the cost of running medical offices — Kaiser does.

Kaiser spokeswoman Lynn Kenton said the physician work force has been stable, although there may be periodic shortages in certain specialties that reflect national trends, such as a recent call for more family practitioners.

But it's different for doctors who run their own businesses, particularly smaller practices with a higher percentage of overhead costs.

Dr. Benjamin Berry of the Women's Health Center of Maui said he pays $63,000 in annual malpractice premiums for his solo obstetrics/gynecology practice in Wailuku.

Berry, 71, wants to retire at age 75, and spent five years looking for a replacement before finding a young doctor in Phoenix who will join the practice in July.

He said there are only six ob/gyns in private practice on Maui, and that the number hasn't changed in the eight years he's been on the island, despite growth in the resident and visitor population.

It's not just high business expenses and malpractice premiums that are keeping Hawai'i from retaining doctors and recruiting new ones, Berry said, it's also quality-of-life issues such as housing and public schools, and on the Neighbor Islands, inadequate medical facilities.

"If I had to do it all over again I would not come here," he said. "I made more in 1985 (in California) than I make today. I'm working harder than I've ever worked in my life and making less. It's not supposed to be that way."

Berry said the small physician's office is going the way of the dinosaur, but one could argue it was inevitable in an evolving business climate, just as neighborhood stores have been eclipsed by big-box chains. What's been lost in both cases is personalized care, and doctors like Berry and Rasmussen said that kind of close doctor-patient relationship is what's kept them from giving up their practices to join HMOs.

"The doctor takes more time. Especially in single-specialty groups, there's more personal care," Berry said. "We've gone from more concern for the individual patients to a herd mentality."

OBSTETRICS WORST OFF

Hawai'i has seen the greatest exodus among obstetricians/gynecologists and orthopedic surgeons, who run the highest risk of malpractice lawsuits. A recent survey by the Hawai'i chapter of the American College of Obstetricians and Gynecologists found that 42 percent of ob/gyns in the state plan to stop providing pregnancy care for women, largely because of malpractice issues.

Medical malpractice reform was a healthcare priority in Lingle's state of the state address, which called for "sensible" reform that would put "reasonable" limits on non-economic damages — those for pain and suffering — while allowing plaintiffs to recover actual damages such as medical bills and lost wages.

Lingle also proposed a "good samaritan" law that would protect doctors who provide medical treatment without compensation from lawsuits, except in cases of gross negligence.

The physician-owned Medical Insurance Exchange of California, which insures more than 1,100 Hawai'i physicians and related entities, reports that although there were no overall rate increases in the past two renewal periods, rates increased 58 percent from 2002 to 2005.

MIEC also said that more than 86 percent of claims filed against its insured doctors in Hawai'i are ultimately found to be without merit and result in no payment to the claimant.

Although past tort-reform bills failed miserably — doctors blame an abundance of attorneys at the Legislature — state Rep. Josh Green, D-6th (N. Kona, Keauhou, Kailua) feels that the issue may finally have momentum because of the recent threatened closure of Kahuku Hospital, which focused attention on the financial squeeze facing rural healthcare providers, including the cost of malpractice premiums.

Tort reform is the subject of a bill that is part of a package of healthcare-related measures introduced by Green and others during the new session. Green, a contract emergency room physician and chairman of the House Health Committee, also wants to establish a Hawai'i Health Corps to attract physicians and nurses by offering to help pay off their education loans in exchange for working in underserved areas.

The Legislature also will be discussing adding millions of dollars to increase reimbursement rates under Medicaid to doctors who participate in the federal health insurance program for low-income patients.

MORE CUTS EXPECTED

Reimbursements for services provided under Medicare, the federal health insurance program for the elderly and disabled, is determined by the federal government, and many private insurers and insurance programs such as worker's compensation use Medicare rates as a benchmark.

The American Medical Association said physicians have seen five years of Medicare payments that haven't covered the increased costs of running a medical practice. Although Congress last month passed legislation to prevent a scheduled 5 percent cut in 2007 Medicare physician payments, the AMA is predicting 40 percent in total Medicare cuts by 2015, with practice costs increasing about 20 percent during that period.

The AMA estimated that 38 percent of Hawai'i physicians would have been affected by this year's rate cuts and other changes in the program.

Payments under the Medicare fee schedule are based on the relative resources required to provide services, and vary among geographic areas. Doctors complain that Hawai'i's reimbursement rates are among the lowest in the nation.

Mary Ann Grandlich of Medicare's Policy & Provider Services Branch in San Francisco said the reimbursement rate for Hawai'i physicians is based solely on reasonable cost data for the state. She said some doctors have wrongly asserted that one reason the rates are low is because Guam is included in the same geographic locality as Hawai'i.

Grandlich also said that Hawai'i's physician payments average about 4.5 percent above the national average, and are in the top 28 percent of the 89 Medicare geographic localities.

The geographic practice cost index used to calculate the fee schedule will be updated in 2008, and Lingle has urged state lawmakers and Hawai'i's congressional delegation to work at the national level to increase the rates.

Rasmussen and other doctors are not convinced they are getting a fair shake. The orthopedic surgeon said Medicare pays $1,100 for a hip fracture to cover pre-operation care, surgery, and three months of post-op care. Physicians in San Francisco, where costs are similar to those in Hawai'i, receive $300 more for the same care, she said.

"Most Medicare cases are break-even or you lose money," she said.

HMSA CRITICIZED

Physicians also feel that private insurers such as the Hawai'i Medical Service Association have them over a barrel with a "take-it-or-leave-it" approach to reim-bursement rates.

"HMSA pays whatever they want to pay us. If HMSA wants to pay $200 less for knee replacement, doctors don't have any options," Rasmussen said.

The nonprofit HMSA is the largest health plan in the state, with 700,000 subscribers and 2,293 participating doctors. Physician participation in HMSA is voluntary, but for most doctors, opting out is not an option, according to physicians interviewed by The Advertiser.

The main reason is that HMSA does not provide direct payment to nonparticipating providers, instead issuing checks for a patient's medical care to the patient. Rasmussen said physicians are left to recover payment from their patients and often must hire collection agencies.

"You can't survive in Hawai'i as a ... (nonparticipating physician). People who went 'nonpar' have all gone out of business," she said.

HMSA spokesman Cliff Cisco said the longstanding physician payment policy is an incentive to sign up as a participating provider.

He said HMSA has the highest physician payment rates in the state, and that an additional $10.3 million has been earmarked for reimbursements this year. The HMSA rates are 15 percent above the Medicare fee schedule, according to Cisco.

"It's difficult to balance physician reimbursements. They would like to have more, but on the other side are employers who fund most of the healthcare in Hawai'i, and they would like to pay less. We're sort of in the middle," Cisco said.

EVEN BLEAKER FUTURE

While the tug of war over healthcare costs continues, patients in Kona and many other communities can't find doctors to take their cases, and more physicians can be expected to quit. The AMA estimates that 45 percent of practicing physicians in Hawai'i are over 50, the age when many consider reducing their patient-care activities.

Big Island orthopedic surgeon Dr. Douglas Hiller, who grew up in Honolulu and returned to the Islands in 1990 after a prestigious sports medicine fellowship at Duke University, said he's not sure he would make the same decision to come back today.

"I love Hawai'i, this is my home, but I've been talking to people in other places who are making 2 1/2 times what I net here," he said.

Hiller said the choice is simple: "Pay what it costs to get good doctors or don't have good doctors."

Mosbrucker in Bend, Ore., said the situation may call for a more radical solution.

"I'm not a fan of socialized medicine, but unless something changes, the state is going to have to do something quickly, especially for the outer islands, and just employ doctors like the ... (Veterans Administration) system," she said.

Reach Christie Wilson at cwilson@honoluluadvertiser.com.