Hospitals wary of Dirigo plan

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Hospitals wary of Dirigo plan
Spokesmen say cost-cutting means the end of some services

By DARLA L. PICKETT,

Blethen Maine Newspapers Inc. May 21, 2003

Portions of Gov. John E. Baldacci's proposed health care reform aimed at insuring the uninsured could spell serious trouble for rural hospitals, the services they offer and the employees who deliver them, according to administrators in Somerset, Franklin and Kennebec counties.

Although they applaud the majority of the governor's Dirigo Health Plan, the administrators say smaller community hospitals would suffer under the financial regulations in the bill currently before the Legislature.

They say the bill calls for a 30 percent reduction in hospital spending by 2005, imposes a 3 percent cap on rate increases and would shift expensive, yet vital, health care programs and services to larger hospitals miles away from local consumers.

Moreover, they worry that Baldacci's rush to put a plan in place for the state's 147,000 uninsured residents does not give legislators, health officials or the public an opportunity to develop a health care package that will endure.

In letters received by employees at some hospitals last week, administrators outlined dire consequences should the Dirigo plan pass as written.

Richard D. Willett, chief executive officer and president at Redington-Fairview General Hospital in Skowhegan, told his staff the proposed plan would necessitate the removal of $750 million from the hospital system. That, he said, would be equivalent to the operating budgets of 24 of Maine's 38 hospitals.

For Redington-Fairview, one of Somerset County's largest employers — with a staff of 500 full- and part-time employees and an annual $16 million payroll — the effect would be devastating, Willett said.

The hospital absorption of such "draconian cuts" would be the equivalent of eliminating the emergency department, intensive care unit, birthing center, ambulance service, oncology service and a large portion of the pharmacy, Willett said.

Baldacci spokesman Lee Umphrey said the governor believes it is imperative to move quickly to pass health care reforms.

"We have a health care cost crisis in this state. Small businesses can't survive, families can't pay, and there are too many people without health insurance," Umphrey said on behalf of the governor. "There is an urgency to get this done."

Umphrey said hospital administrators and the Maine Hospital Association should focus their energy on the proposal and become part of the process instead of waging a battle against it.

Willett said he was supposed to be part of the process as a member of the Health Advisory Team assembled by the governor to work on the Dirigo project. However, he said that despite his involvement for several weeks, he never saw the entire plan until Baldacci presented it at a press conference about two weeks ago.

"Conceptually, who can find fault with a plan that insures everybody? But this isn't just about insuring 1.2 million people. ... This is (about) the largest sector of Maine's economy turned on its head in three weeks, not knowing exactly what's going to happen," Willet said. "What's the hurry?"

Willett fears the bill will cripple small hospitals and the ripple effect will be felt by consumers and the entire community.

At Inland Hospital in Waterville, with 350 employees and an annual payroll of about $12 million, spokeswoman Terri Hibbard said the proposed bill would limit programs for Maine's older population, which she said increases every year.

Hibbard said she does not expect passage of the bill would put Inland totally out of business, but said it would jeopardize many programs.

"We would have to focus on acute care," Hibbard said. "Anything not directly related to acute care would be gone —outreach, prevention and out-patient programs would go away."

At Sebasticook Valley Hospital in Pittsfield, president and CEO Jack May commends Baldacci for "tackling a problem that obviously needs to be addressed." May said he agrees, for instance, with the plan to put a moratorium on costly, expanded services and projects. May said he also favors disclosing health care prices to the public.

However, like his colleagues in the industry, May opposes the budget outline.

May said the Dirigo plan would specifically affect his hospital because of the growing number of services it offers, among them, a new women's health center and increased operating room procedures.

"That makes it easier to come to this hospital from this geographic area to get the services they need," May said. "With this kind of cap, it will make it so some of those services won't be here — for example oncology services. Right now we lose $170,000 rendering that service. I guarantee you with this tightening down of budget constraints, its very unlikely we could continue to offer that service."

With an aging population, adding even 35 minutes travel time means it is likely elderly patients just will not get the service, May said.

In a critique of the Dirigo plan, Richard Batt, CEO and president at Franklin Memorial Hospital in Farmington, said his hospital supports the notion of a new health insurance option, but said it is unreasonable to create the plan without start-up funding from the state.

"Immediately taxing insurance premiums and reducing hospital funding to subsidize Dirigo Health may be attractive politically, but will be an unprecedented social policy disaster," Batt said.

Batt said he welcomes good health care legislation, but fears enacting legislation that fails to solve problems "or, just as bad, solves some problems and creates new ones."

Legislators were at work on the bill in the Health and Human Services Committee on Tuesday and were expected to continue that work throughout the week, according to Sen. Pamela H. Hatch, D-Skowhegan. Hatch said she is waiting to see the final version before making a decision. She said she wants to see safeguards in place before she votes to approve it.

But, she said, health care proposals are not new to legislators and have been the subject of studies for 20 to 25 years.

"There are people out there who don't have any health insurance," Hatch said. "It's a real burden on them and the hospitals that take them in. If they don't seek primary care, they get truly sick and end up in the hospital. We have to do something."