The Primary Care Protection Act: Hawaiʻi’s Most Practical Solution

Primary care constitutes the segment of healthcare focused on maintaining wellness, rather than intervening only after illness occurs. It encompasses prevention, early intervention, and long-term management. Despite its importance, primary care has been chronically underfunded in the United States, a trend that is particularly pronounced in Hawaiʻi.

Data from the CMS Limited Data Set, as analyzed by Westat, indicate that primary care spending per beneficiary aged 65 and older is $375 in Hawaiʻi, compared to a U.S. average of $740. Hawaiʻi allocates less than half the national average, and the United States as a whole invests significantly less in primary care than comparable nations. These figures do not indicate efficiency; rather, they reveal a lack of care delivery.

Understanding this disparity requires examining the structure of insurer spending. Insurers may allocate up to fifteen percent of premiums for administrative costs, including corporate overhead, executive compensation, and board remuneration. However, the situation is further complicated by the fact that most companies contracted to manage care—such as pharmacy benefit managers, prior authorization vendors, specialty benefit managers, utilization-review firms, and claims processors—are not classified as administrative expenses. Instead, their payments are drawn from the medical budget and reported as if they constitute direct care.

These corporations are predominantly headquartered outside Hawaiʻi and do not provide direct patient care within the state. Nevertheless, they receive substantial and increasing portions of the same medical funds that primary care clinicians depend upon to sustain their practices.

This creates a perverse financial dynamic: the less care delivered, the more insurers keep. If Hawaiʻi does not have enough clinicians (because reimbursement is so low that practices cannot survive), insurers retain unspent medical dollars as margin or investment income. Primary-care clinicians, by contrast, only receive payment when they actually provide care. They do not receive a guaranteed share of revenue the way insurers do.

This dynamic contributes to the CMS-documented disparity: $375 per older adult in Hawaiʻi compared to $740 nationally, despite Hawaiʻi’s higher-than-average cost of care delivery. The low expenditure does not represent an achievement; rather, it evidences a reduction in care provision.

The Primary Care Protection Act addresses this structural issue by mandating that 12 percent of total healthcare spending be allocated to primary care. This policy does not increase overall spending; rather, it ensures that a modest portion of existing medical funds reaches care providers. Unlike the insurer’s fifteen percent administrative allowance, primary care clinicians receive the twelve percent allocation only when care is delivered. If no patient is seen, no payment is made.

A 12 percent floor is practical, not radical. It is lower than what many high-performing nations already devote to primary care. It is lower than what insurers are permitted to keep for administration alone. And it is enough to stabilize clinics, retain providers, rebuild care teams, shorten wait times, and shift dollars back into real care rather than administrative intermediaries.

Hawaiʻi requires a healthcare system in which medical expenditures directly support patient care. Redirecting a small portion of existing funds from mainland management companies to frontline primary care represents the most direct and feasible approach to restoring access within the state.

The Primary Care Protection Act seeks to realign Hawaiʻi’s healthcare system with its intended purpose by ensuring that those who deliver care receive support at least as reliably as the corporations that benefit financially when care is not provided.