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Saturday, August 7, 2004
Hospitals say cap may limit services
Copyright © 2004 Blethen Maine Newspapers Inc. | ||
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Hospital administrators have spent the past year anticipating Gov. John Baldacci's plan to slow medical expansion to lower health care costs, never sure how far the plan would go. Now they know. Medical-related projects deemed worthy and financially sound by the state will now be compared against one another. Then the state will settle on a package of projects whose total third-year operating costs cannot exceed $6.6 million, a figure announced Friday. Without knowing the operating costs of the 11 projects from hospitals and other health care providers waiting to be reviewed by the state, it's unknown how many of them will be pushed out by the cap, also known as the Capital Investment Fund. What's clear is that the new limits will affect hospital plans. Over the past three years, an average of $7.7 million in third-year operating costs have been approved annually - 14 percent more than would be allowed under the cap. "It became clear to us that our spending growth is too high and this will bring us down to a more comparable level with the other states of New England," said Trish Riley, director of the Governor's Office of Health Policy and Finance. But the hospitals' trade association says the cap is too low and overlooks the logjam of projects created by a one-year moratorium on medical expansion that ended in May. It will also hurt hospitals' ability to provide the best and latest in services, equipment and facilities, said Mary Mayhew, vice president of government affairs at the Maine Hospital Association. "My concern is that it detrimentally affects the rational access to critical health care services," Mayhew said. "We may, in the long term, increase health care costs." A public hearing on the cap, a key component of Baldacci's Dirigo Health reform law passed last year, is scheduled for Aug. 31 in Augusta. It will draw complaints largely from hospitals, whose projects are usually bigger than those of doctors' practices and costly enough to trigger state review and require a Certificate of Need. Riley said the amount is still subject to change but "only if we did the math wrong or there were extenuating circumstances we didn't know about, like a brand new technology that wasn't anticipated when we set the cap." The number will be finalized in October and state officials will apply it to the 11 projects in the pipeline, and any that follow. Hospitals were upset that the health policy office implemented the cap by executive order late last month, rather than waiting for lawmakers to take up the issue after they reconvene in January. But state health officials said they had to act when they saw $214 million worth of capital expenditures being proposed in the eight weeks after the moratorium expired. The cap, Riley adds, applies to just the 20 percent of medical expenditures costly enough to require state review. "That's 80 percent of expenditures that are still going to continue unabated without regulation," she said. Of the $6.6 million cap, $5.8 million in third-year operating costs would be reserved for hospital projects and $823,000 for non-hospital projects, such as a physical therapy center or an expensive piece of equipment for a doctor's office. Riley said operating costs are a better measure of a project's impact on the health care system than a one-time capital investment, which often involves private donations. Operating costs, she said, are typically shifted onto insurers, who then raise premiums. Among the proposals subject to the cap are Maine Medical Center's plan to build a $26 million ambulatory surgical center in Scarborough and the $90 million second phase of Mercy Hospital's relocation to a site along the Fore River in Portland. Riley noted that exceptions would be made for a new service or technology important to have in Maine. "If it costs $10 million, it would take $2 million over five years from the cap," she said. "So a big project wouldn't gobble all the money . . ." Staff Writer Josie Huang can be contacted at 791-6364 or at:
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