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Wednesday, July 28, 2004
State puts cap on hospital expansion
Copyright © 2004 Blethen Maine Newspapers Inc. | ||||||
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Also on this page: In Depth: Health Care Reform | |||||
AUGUSTA ‹ The administration of Gov. John Baldacci dusted off its executive powers this week to make sure $214 million in hospital expansion proposals are subjected to a tougher-than-ever state review. Saying medical expansion is costing Mainers too much, the governor's Office of Health Policy and Finance angered hospitals and Republicans by issuing emergency rules to limit how many projects can be approved each year. The cap, which took effect Monday when papers were filed, will squeeze out some of the 11 projects waiting to be reviewed by the state - such as those proposed by Maine Medical Center in Portland, Southern Maine Medical Center in Biddeford and York Hospital. The limit will apply to all future projects. Critics of the governor's health policy office said the state's current process for reviewing big-ticket medical projects has worked fine for years and does not pose an immediate threat to the public health or safety of Mainers - the criteria for emergency rulemaking. In fact, hospitals say, new technology and services can actually improve people's health and reduce spending. The health policy office does not plan to release an actual number for the cap until next week, but the Maine Hospital Association already is expecting the number to be too low. "We want to see legislative involvement around how do you arrive at that number," said Mary Mayhew, vice president of governmental affairs for the hospital association. "It shouldn't simply be the whim of the executive branch." The cap is a key cost-containment measure outlined in Baldacci's Dirigo Health reform law. When the law was signed last year, the plan was for lawmakers to consider a cap formula after they reconvened in January. But the health policy office - backed by large employers such as Bath Iron Works and social service agencies who blame medical expansion for higher health care costs - said that route could delay the measure's implementation until fall 2005. Expensive projects, they said, would be approved in the meantime, spurring hospitals to raise rates for insurance companies, who then increase premiums for customers. The health policy office said it began to consider emergency rulemaking after the 11 projects were presented to the state in a span of just eight weeks, right after a one-year moratorium on medical expansion expired in May. On average, the state receives about 35 letters of intent over the course of a year. "That's 60 percent faster than usual," Trish Riley, director of the health policy office, told lawmakers on the Health and Human Services Committee at a meeting Tuesday. "Even accounting for the moratorium, this is very high." The cap will not apply to projects already under review, such as the first phase of Mercy Hospital's planned relocation in Portland. But it will affect the second phase of the Mercy project, for which the hospital submitted a letter of intent in May. To better assess a project's long-term impact on the health care system, the cap will address the third-year operating costs of a new facility, equipment or service rather than the cost of acquiring it. An early estimate put the cap at $4 million, but the health policy office says that number is outdated. A public hearing will be held after next week's anticipated announcement of the cap amount. The number will be finalized within 45 to 50 days, said Ellen Schneiter, deputy director of the health policy office. Legislators will still have a chance to make changes to the cap next year, but some said it's already a lost cause. By the time the cap goes before lawmakers, it will have been in effect for half a year. Critics of the emergency rulemaking said the cap may not be a priority for freshman legislators, and that the issue will fall to the wayside. "Effectively, it's done," said Sen. Carol Weston, R-Montville, after hearing the announcement by Riley at the committee meeting. "You're bypassing the legislative process, and I'm just appalled," she told Riley. Elizabeth Mitchell of Maine Health, parent company of Maine Med and SMMC, said the health policy office is "squandering good will" for the Dirigo Health reform law by fast-tracking the cap. "We all support this thing," said Mitchell, director of government and employer relations for Maine Health. "It's just how it's being done." Hospitals and the health policy office most recently butted heads over another Dirigo creation - the state health plan, a set of recommendations about how to improve the cost, accessibility and quality of health care over the next year. The final version, issued Monday, takes hospitals' criticisms into account, Schneiter said. For example, the plan identifies prescription drugs as another leading cost-driver, and clarifies that it is not setting budget targets for hospitals, she said. Hospital representatives said they still have to review the plan.
Staff Writer Josie Huang can be contacted at 791-6364 or at: jhuang@pressherald.com. |
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