The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Senate Committee on Ways and Means on Feb. 25, 2026.
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Feb. 25, 2026, 10:55 a.m.
Hawaii State Capitol
Conference Room 211 and Videoconference
To: Senate Committee on Ways and Means
Sen. Donovan M. Dela Cruz, Chair
Sen. Sharon Y. Moriwaki, Vice Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
TESTIMONY IN SUPPORT OF SB3139 SD1 — RELATING TO STATE HEALTH PLANNING AND DEVELOPMENT AGENCY
Aloha Chair, Vice Chair and other Committee members,
The Grassroot Institute of Hawaii would like to offer its support for SB3139 SD1, which would increase the certificate of need exemption threshold for bed changes to 30% of a facility’s total existing licensed beds within a two year period, up from 10%. The bill would also exempt facilities operated by and services provided by the Hawaii Department of Health.
As Grassroot explained in a recent white paper, Hawaii’s restrictive certificate-of-need program has become a barrier to affordable and accessible healthcare in our state, especially in rural areas and for vulnerable populations.
Required in Hawaii since the mid-1970s, medical certificates of need allegedly prove to state officials that proposed healthcare facilities, services or equipment updates are “needed” in the community. Even the state Department of Health must comply with CON requirements, which seems highly redundant and bureaucratic.
Nationwide, recent studies suggest that CON laws have the counterproductive effect of limiting healthcare quality and access, especially for rural areas and vulnerable populations. For example, consider that:
>> States with certificate-of-need laws have fewer hospitals, substance treatment facilities, psychiatric hospitals, ambulatory surgical centers, dialysis clinics, nursing home beds, open heart surgery programs and hospice care facilities.
>> CON regulations tend to result in fewer hospital beds, decreased access to medical imaging technology and longer wait times.
>> CON regulations are linked to fewer rural hospitals and alternatives, and residents of CON states have to travel farther for care and are more likely to leave their states for care.
This bill deserves praise for liberalizing CON regulations for bed changes, as CONs associated with hospital beds contribute to healthcare shortages.
During the COVID-19 crisis, states that required CONs for hospital bed changes were more than twice as likely to experience intensive care unit bed shortages. Indeed, the average COVID-era ICU bed shortage in states with CON laws was approximately nine beds per 10,000 residents. In states that did not have a CON requirement for hospital bed changes, the ICU bed shortage during the pandemic was significantly smaller at only one bed per 10,000 residents. Moreover, these shortages could not be addressed through the temporary lifting of CON requirements, suggesting that long-term reform is necessary to make an impact in this area.
Defenders of CON laws claim they are needed to constrain high healthcare costs and guarantee access to higher-quality care. However, research demonstrates that such laws are associated with higher per-person healthcare costs and higher death rates from treatable complications following surgery.
There are numerous benefits to CON reform, and it has been gaining in popularity across the country. More than a dozen states have fully repealed their CON programs, and even more have been partially rolling them back.
Hawaii’s certificate-of-need program is badly in need of reform. Amending bed-change requirements and exempting the Department of Health would be a good first step, but the discussion should not end there. A more comprehensive strategy is currently outlined in SB2289, which proposes broader CON exemptions aimed at helping vulnerable populations.
We hope the Committee will consider other ways to loosen CON regulations, with the goal of improving healthcare access and quality in our state.
Thank you for the opportunity to testify.
Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
