June 23, 2018
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5 steps to shrink the state deficit without sacrificing Maine’s poorest and sickest

By Dr. Erik Steele

There is no problem in Maine too big to fit into a wood chipper. Got a state budget deficit to fix? No problem — put state Medicaid health insurance coverage for 60,000 people into the chipper, shred it and let those human chips fall where they may.

There is a fairer, better way, to reduce Maine’s projected state budget deficit without the poorest, sickest people in Maine carrying the entire burden. First, postpone for three years the proposed tax cuts scheduled for 2012 for Maine’s wealthiest residents and cover the state budget deficit with the preserved revenue that will result. Then use the three-year hiatus to restructure management of Maine Medicaid into a financially viable and socially responsible program.

The money Maine Medicaid needs can be saved by reducing costly waste — such as duplicative, ineffective and inefficient services — and moving Medicaid patients to so-called managed care plans in which a global budget for care is set and health care providers have incentives to be more efficient and cost effective. In other words, the funds can be saved without throwing thousands of Mainers to the wolves with no health insurance and no health care.

The only thing making it necessary to consider tossing those 60,000 people off the state health insurance rolls so quickly is the effort to save $200 million in Medicaid costs over one or two years, because tossing those Mainers or cutting payments to health care providers are the only ways to save that much money that fast.

So let’s buy some time and then get to work finding cost-saving measures that are not socially repugnant, medically irresponsible and more of the same old “cut health care costs by cutting people off from health care” nonsolution.

Step 1: Freeze the Maine Medicaid budget for the next three years at $50 million less than its current projected cost. There will result in an immediate savings and then no spending increase for three years.

Step 2: Postpone some of the tax cuts for the top one percent of Maine taxpayers and those with property values of more than $1 million for the same three years. That gets us about $100 million to $200 million to cover budget deficits while we figure this out.

Step 3: Set a global budget for Maine Medicaid as a percentage of a five-year running average of state revenue. The Maine Medicaid budget must be within that budget cap by the fourth year. That gives the state budget some Medicaid cost stability and predictability.

Step 4: Implement a managed care program for Maine Medicaid, and other cost savings, within two years.

Step 5: Start figuring out where to reduce health care waste and save money. We can begin with the list of ideas I laid out in “Medicaid — ‘playing’ the cutting ‘game’” in 2004, or other ideas. The real idea driver must be a capped budget and the guns to our head of two to three years to fix the costly system before the tax cut postponement lapses. That will force us to take the dramatic steps necessary to make Maine Medicaid solvent.

Some of this idea is not mine. Others have suggested that cutting the most essential health care to some of Maine’s poorest and frailest people at the same time we are giving a tax break to the richest Mainers stinks like low tide, and I think they are right. What’s different in my proposal is a gun to our collective heads; I think the price for a tax break postponement has to be a hard and fast commitment all the way around the political and health care stakeholder table to reining in Medicaid costs. There should be no tax holiday without a hardwired program for Medicaid sustainability, a new program that does not include whacking thousands of Mainers off the insurance rolls who will never find health insurance somewhere else.

We got in this Medicaid mess together. We all failed to figure out how to provide health insurance and care to poor Mainers at a sustainable cost. Now, it’s time to put on our big kid pants and fix it.

Erik Steele, a physician in Bangor, is chief medical officer of Eastern Maine Healthcare Systems.

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