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Thursday, July 29, 2004
Hospitals say medical expansion cap targets them as cost-drivers
Copyright © 2004 Blethen Maine Newspapers Inc. | ||||||
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Also on this page: In Depth: Health Care Reform | |||||
Maine's hospitals say they can't help but feel put out. During negotiations last year on the state's Dirigo Health reform law, the hospital trade group conceded to a cap on medical expansion, thinking that lawmakers would take up the issue when they reconvene this year. That scenario fell by the wayside Tuesday when the administration of Gov. John Baldacci announced that it had imposed the cap by executive order and hoped to implement it within a matter of weeks, once a dollar figure is agreed on. The rationale for adopting the cap on an emergency basis was a belief that new facilities, services and equipment would increase health-care costs, causing hospitals to raise rates for insurance companies and subsequently shifting the expense onto consumers. But hospitals say they're being targeted at a time when prescription drug costs are rising, insurers are recording profits and giving bonuses to executives and the population is older - and sicker - than ever. "Hospitals throughout this process somehow have been painted as villains," said Sue Hadiaris of Southern Maine Medical Center in Biddeford, whose proposal to expand its emergency department will be subject to the new cap. "We're not villains," she said. "We are a facility that provides medical care for people who are coming to us with emergency and chronic needs." The governor's Office of Health Policy and Finance acknowledges that hospitals are not the only cost-driver, and that hospital projects costly enough to require state approval account for just 20 percent of total capital expenditures by hospitals. But that's still tens of millions of dollars within state regulators' control. And as state officials point out, the cap's purpose is not to quash medical expansion but to ration it - an idea strongly supported by some large employers and social service groups. At least $214 million in projects waiting to be reviewed - and any proposals that follow - will be affected by the new cap. Nine of the 11 proposals received by the state since a yearlong moratorium expired in May come from hospitals. The remaining two are from NEHE-MRI, which is a Presque-Isle based traveling MRI service, and U.S. HealthWorks, a Georgia-based company that operates occupational health clinics in Brunswick, Scarborough and other Maine towns. Under the current system, the commissioner of the Department of Human Services grants approval to projects based on criteria such as community need and economic feasibility. But critics say that's no longer working. Between 1997 and 2003, 68 proposals were approved while only four were denied, according to a review by the advocacy group Consumers for Affordable Health Care. Hospitals say the cap - which will impose separate limits on hospital and non-hospital projects, such as doctors' offices - is not a bad idea in theory, but they fear that worthy projects will now have to compete for priority. How, they wonder, will the state balance the needs of one community against that of another? "This is potentially very arbitrary. It does not necessarily link to health or community needs," said Elizabeth Mitchell of Maine Health, the hospital network that includes SMMC and Maine Medical Center. Maine Med's plan to build an ambulatory surgical center in Scarborough will be subject to the cap. Hadiaris, of SMMC, noted that delayed projects will cost more because of inflation. Maine's nonprofit hospitals cannot adjust rates to cover increased costs with the same ease as for-profit businesses, she said. Hospitals say they will share their disapproval with legislators and the Baldacci administration. Already, some Republican lawmakers are accusing the governor's office of circumventing the legislative process. Although they will have a chance to act on the cap when the regular session begins next January, House Minority Leader Joe Bruno of Raymond says earlier action may be taken if the governor calls a special session this summer to deal with state borrowing. "We could put in a piece of legislation to repeal that emergency rule-making," said Bruno. "That's why the governor needs to be careful about calling us into special session because anything can happen." "The governor's still seeking bipartisan consensus to call a special session," responded Baldacci's spokesman, Lee Umphrey, "and it's less than helpful for Mr. Bruno to make threats when everybody is being productive."
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