A Maine bill aims to cap how much hospitals can charge insurers for services in an effort to make healthcare more affordable, but health system executives in the state argue the legislation would lead to service cuts and closures, the Portland Press Herald reported Feb. 24.
The bill would cap hospital prices charged to private payers at 200% of the Medicare reimbursement rate, according to the report. The hope is that the cap will, in turn, help control the premiums that payers charge their members.
State Rep. Drew Gattine worked with the Office of Affordable Health Care — an independent agency created by the legislature — on the bill. An analysis from the office found that prices varied largely across hospitals. For example, a knee replacement at Northern Light Mercy Hospital in Portland cost $50,319 but $66,694 at MaineHealth Maine Medical Center in Portland.
Andy Mueller, MD, CEO of Portland-based MaineHealth, warned that if the bill is enacted, the system’s revenue would decline by about $650 million per year and some of its hospitals would be at risk of closure, according to the report. He said that the only way the system would survive without becoming insolvent is by letting go of a third of its 24,000-person workforce and drastically reducing services.
Guy Hudson, MD, CEO of Brewer-based Northern Light Health, said Maine’s healthcare systems are more financially fragile than those of most states, adding that the bill would add problems, not solve the increasing cost of care.
Dr. Hudson said Northern Light’s revenue would decrease by $220 million if the cap were to take effect and that the system would have to be selective in choosing which services to maintain. The system closed Waterville-based Inland Hospital last May, due to “immense pressure of higher operational costs, unsustainably low reimbursement rates and a tight labor market.”
Mr. Gattine said a public hearing will be held in the coming weeks and health and human services committee members will hear from all sides, according to the report. He said he is “hopeful a balance can be struck,” according to the report.
“You can’t lower costs without doing something to lower costs,” Mr. Gattine said. “We have to figure out what the right tipping point is.”
