Maine Medical Center CEO: Hospital needs to cut spending

Posted Sept. 09, 2011, at 9:30 p.m.
Last modified Sept. 10, 2011, at 12:07 a.m.

PORTLAND, Maine — The head of Maine’s largest hospital said Friday that there’s a lot of uncertainty as to what health care reform will mean to his organization, and they’re looking to cut expenses in anticipation.

Richard Petersen, president and CEO of the Maine Medical Center, said the hospital seeks to cut expenses by 2.3 percent. MaineMed is working with an outside firm to look at how to operate more efficiently, studying everything from how to make the supply chain work better to reducing clinical variation — trying to standardize how patients are treated and tested for various ailments.

At this point, said Petersen, there are no cuts in the labor force identified as part of the plan. Petersen spoke to more than 400 people at the Portland Regional Chamber’s Eggs & Issues breakfast.

MaineMed has a work force of 6,200, with a $965 million annual operating budget. The hospital sees 30,000 discharges yearly, and 1 in 5 hospitalizations occur at MaineMed.

And while the city and hospital have rated well on quality of care and efficiency studies, there’s room for improvement throughout the entire sector, Petersen said.

“The cost of health care is too high and the quality we’re delivering is not where it needs to be,” said Petersen.

Petersen put out a list of facts about the industry. He noted that the country spends more on health care than any other nation, and yet, the U.S. life expectancy is 42nd in the world.

“Chile and Cuba are better,” he said.

Medical debt is the leading cause of personal bankruptcy in the country, he said. And 15 percent of the U.S. population, or about 45 million people, have no form of health insurance.

“Many of these patients are turning into train wrecks later on in their lives because they don’t receive the care they need,” said Petersen.

Petersen laid out some steps to take. One was working upstream on the health of the population, addressing problems that led to medical costs such as obesity and smoking.

Health organizations have to drive down the per-patient cost by reducing clinical variation, he said. The Medicare and Medicaid programs need to pay their fair share, he suggested, so costs aren’t shifted onto private insurers and the hospitals.

He also talked about the single patient medical record effort as a way to cut costs. The move essentially reduces costs in the medical records arena, reducing duplication of effort and making sure that all doctors seeing a patient have the most up-to-date and complete information.

The entire MaineHealth system, of which MaineMed is the flagship hospital, is investing $150 million to put such a system in place.

With Maine’s aging population, another area of focus must be end-of-life care, Petersen said. One-third of medical expenses in the last year of life are spent in the final month. Patients and families need to be given more information about health care options so they can make better choices, he said.

There are two Eggs & Issues breakfasts planned for October. On Oct. 6, Gov. Paul LePage will return to the forum to speak. On Oct. 14, U.S. Sen. Olympia Snowe will be the guest speaker.

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