April 24, 2009

MaineCare Is Unsustainably Costly and Requires Reform

By Rep. Ralph Sarty

I want to thank all of you at Bridgton Hospital for the many letters expressing concern about state funding of our Medicaid program, known as MaineCare.

I understand the serious concerns regarding the state’s unpaid MaineCare debt to our hospitals as well as the pending funding reduction to hospital-based physicians. The MaineCare program, including the additional $338 million in stimulus money recently designated for it, now represents a staggering total of more than $2.5 billion per year. This is not sustainable even in good economic times. We no longer have the money to run one of the most generous and costly Medicaid program in the nation.

State government, in my view, has done a deplorable job in administering this program. It has become a “black hole,” consuming enormous amounts of money, to the point that it dominates the entire state budget and squeezes out resources for other critical needs, including higher education and road maintenance.

The accumulated unpaid MaineCare debt to our hospitals totals some $450 million. That is unacceptable and can only be considered a symptom of a failed program.

When the stimulus package was made known to the Legislature, my party insisted that at least $100 million be applied to the hospital debt. Both the majority party and the governor reluctantly agreed. However, when the stimulus cash arrived, the governor announced a payment of only $45 million, promising more to come. That was a month ago and no payment has been made to date, not even the initial $45 million.

By the time you read this, we will know the extent of our state’s next revenue shortfall. The news will be bleak. Since the Second Session of the 123rd Legislature (in 2008), we have been frustrated with the need to create supplemental budgets several times due to declining revenues. Our State Constitution requires a balanced budget, and achieving balance has become a daunting task, requiring serious cuts in state spending. The method the governor has proposed to the Legislature has been across-the-board cuts to all state agencies.

I disagree with this approach. It represents crisis management and fails to analyze each agency and program for efficiency. It does not make cuts based on how well agencies and programs are performing. It also penalizes well run programs and agencies while poorly run programs are not held more accountable. I mention this to just let you know what’s going on inside state government.

Back to the hospital crisis. I understand there are more than a dozen Critical Access hospitals in Maine that are dependent on hospital-based physicians, and I fully realize a reduction in physician reimbursement will pose a significant problem, if not an actual crisis, for these hospitals.

In my opinion, the MaineCare program is broken and beyond repair in its present form. It is imperative that those in medical services and state government take some bold and desperately needed steps to visit this situation as soon as possible. If not, we could face a catastrophic situation in the availability of health care services to tens of thousands of people in our state. Even with federal stimulus monies, there are not sufficient funds to sustain this program in its present form. It must be restructured, and soon.

I am very supportive of Bridgton Hospital and all the other health care facilities in our state facing this crisis. However, just a week ago a press release by Governor Baldacci observed that close to 75 percent of emergency room visits in our state’s hospitals are unwarranted. This represents a staggering cost to MaineCare as well as all those people struggling to pay for health care insurance in Maine. This is just one area that needs reform.

Between letters from hospital employees and ads placed in newspapers, there has been a great effort to expose both legislators and the general public to the plight our hospitals and health care service providers face under the failed MaineCare program. However, in all the emails I have received on this issue from health care providers, only two offered suggestions to address some of the problems they see in this system. If we are to start down the road of revisiting the MaineCare funding crisis and hopefully bring it under control, we must first define those things in the system that are not working.

One area that immediately comes to mind is the set of mandates and conditions that come with a government-funded program. Often these conditions just don’t work and result in cost overruns that were not predictable when a program was created. Our state offers costly MaineCare services that are not offered in most other state-run Medicaid programs. This situation demands review. Fraud and abuse in the system is another area that seems more prevalent than the Department of Health and Human Services seems willing to admit or deal with.

My point is this: As a legislator I know Maine Care is a poorly run program, to say the least. The costs are staggering and simply not sustainable. To fix this problem and establish the financial security our hospitals deserve will require a great deal of input from those in health care services. Many of us in the Legislature are willing to take on this issue, but to do so effectively we need a great deal more input than we are currently getting from health care providers.

As an elected official, there is no advantage to presenting bad news to voters and constituents. However, I do not see a light at the end of the tunnel on the issue of MaineCare and health care services in our state. I believe the Legislature will be blatantly negligent if we fail to take steps to revisit the Maine Care program, establish a financially healthy situation for our state’s hospitals and regain control of a program that desperately needs restructuring. It is my hope we can all work together toward such a goal.

Rep. Ralph Sarty (R-Denmark) serves on the Inland Fisheries and Wildlife Committee

(This column is based on a letter from Rep. Sarty to the Bridgton Hospital staff and employees.)