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Sunday, July 11, 2004
Medical growth panned as costly
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Cranes and work crews make regular appearances at Maine's hospitals and physician practices, heralding progress in Maine's health care facilities. But the impact of medical expansion on Mainers is more complex than it looks. And like prescription drugs and Maine's high rate of chronic illnesses such as heart and lung disease, it's contributing too much to health care costs, says an unlikely alliance of consumer advocates, employers and insurance companies. Recent weeks have brought a groundswell of support for a plan from Gov. John Baldacci that would annually cap the number of medical expansion projects expensive enough to require state approval through the certificate of need program. So enthusiastic are these supporters that they are urging the governor's Office of Health Policy and Finance to use emergency rule-making powers to enact the cap rather than wait for lawmakers to vote on it after they reconvene in January. Patients often want the latest and best care, bundled into a convenient location. And health care providers want to ensure market share and prestige, leading to a queue of $300 million in proposals waiting for state review. But those trying to slow medical expansion say costs trickle down to the average Mainer: To help repay debt and cover new operating expenses, a health care provider may raise prices for insurance companies, who in turn, could increase the cost of health plans for employers and the self-insured. It's not clear yet to the governor's office whether the cap warrants emergency action, but the measure's supporters say waiting for lawmakers to pass a bill by spring or summer is too much of a delay. "In a state that has a small population, we can't afford to have every facility have every possible treatment that's available," said David Brenerman, who oversees government relations in Maine for one of the state's biggest employers, Unum Provident in Portland. But, said David Winslow, vice president of the Maine Hospital Association, "It's going to be advances in health care that are going to be unfortunately held back." While the association says it does not oppose a cap in principle, it worries that it will be too restrictive and prevent hospitals from offering the type of care that results in better medical outcomes for patients. Winslow noted that in some cases, capital investments capture savings. When Mid Coast Hospital in Brunswick and Bridgton Hospital moved into new, better-designed buildings, each was able to shave operating costs, he said. With the bulk of the state's big-ticket projects, hospitals are feeling the most anxiety about the cap, which is one of the most drastic attempts at reforming the certificate of need program since it became state law in 1978. The program's purpose is to contain health care costs by reducing the duplication of services and unnecessary use of services. Currently, the program would apply to a new service with annual operating costs that exceed $110,000, such as cardiac surgery; equipment costing more than $1.2 million - like a CAT scan; or a new medical building worth over $2.4 million. Medical expansion moves along largely unchecked in the 14 states that don't have certificate of need programs, but Maine has seen hospitals fight bitterly to provide a service. This was evident in the battle to build a cancer treatment center in Wells. In 2003, the state awarded the rights to partners Maine Medical Center in Portland and Southern Maine Medical Center in Biddeford. A rival team of hospitals - York Hospital, H.D. Goodall Hospital in Sanford and Wentworth-Douglass in Dover, N.H. - are fighting the state's decision in the courts. Certificate of need has also pitted hospitals against physician groups. This year, Portland hospitals successfully argued against a proposal by doctors to build a new surgery center in town, saying it would replicate existing services at hospitals and increase patient utilization. Overall, though, Maine's program has lost its teeth, watchdog groups say. Between 1997 and 2003, 68 certificate of need applications were approved while only four were denied. The result was $341 million in capital expenditures, according to an analysis by Consumers for Affordable Health Care. Convinced the certificate of need program needed reworking, Baldacci imposed a one-year moratorium in May 2003 to buy time for the creation of a state health plan on how health care resources are distributed in the state. In the meantime, he won passage of his Dirigo Health reform act, which called for the cap on certificate of need projects. The state each year would establish a theoretical pool of money called the Capital Investment Fund. This pool does not apply to the capital cost of a project, but the operating costs during the third year, when the start-up phase is well over. So while a project may run into the tens of millions, its third-year operating costs may be only a fraction of that. No number has been formally established. But $4.6 million was an early estimate, giving hospitals and doctors an idea of the tight competition their projects will face. "That there is no acknowledgement that there's been a moratorium for a year leads that number to be too low," said Winslow, of the hospital association. Dirigo Health also mandated an assessment on a project's cost by the Bureau of Insurance, and review by the Bureau of Health on whether the project will enhance access to quality health care. If the certificate of need reforms are successful, Mainers may see fewer construction projects but more affordable health care, said Trish Riley, director of the governor's Office of Health Policy and Finance. "We're not saying stop technology or stop new services," Riley said. "We're saying let's get organized. . . . The goal is to stop the growth of (insurance) premiums." Staff Writer Josie Huang can be contacted at 791-6364 or at:
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