June 05, 2020
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New commission could curb Maine’s health care costs

Gabor Degre | BDN
Gabor Degre | BDN
Maine Senate President Troy Jackson during a press conference in Orono in August 2019.

AUGUSTA, Maine — Top Democrats in the Maine Legislature want the state to follow other states in establishing a new board aiming to cut costs in its health care system, but one expert said the program’s effect would lie in the structure and latitude given.

A bill to enshrine the board was announced Tuesday as part of a package of bills backed by Senate President Troy Jackson, D-Allagash, and House Speaker Sara Gideon, D-Freeport. Three New England states have boards that regulators say have saved consumers millions.

There isn’t much detail on how the Maine commission would look under a proposal from Jackson, whose spokeswoman said it would “take control of growing health care costs” — which rose by nearly $1,000 per person from 2010 to 2014, according to the Kaiser Family Foundation — by prioritizing “effective, data driven reforms.” 

But policy experts say how much power the commission has and who it answers to would determine its effectiveness. These types of boards can force hospitals to use revenue targets for public good, while others do little more than pressure health care systems to charge less.

Oversight boards have many tools they can use to influence health care costs. Those tools ultimately determine how effective the oversight is, said Trish Riley, the executive director of the National Academy for State Health Policy who ran former Democratic Gov. John Baldacci’s health policy office. Massachusetts, Rhode Island and Delaware have bodies that implemented benchmark rates tied to health care spending growth. 

In Massachusetts, that benchmark resulted in $7.2 billion less in spending from 2013 to 2018, according to the authority’s report. The benchmark has been below the national rate of 3.5 percent for that same time period. But Riley said there’s no proof that those measures have translated into lower premiums for consumers. 

She also said there are no penalties if those caps are exceeded beyond a “public shaming process.” Massachusetts’ board can require providers to create performance improvement plans. Riley said nominally independent boards often end up being staffed by industry members, who have expertise but are tasked with collecting data regulating them.

Vermont’s Green Mountain Care Board operates independently of the state and has control over the state’s 14 regulated hospital budgets by setting limits to how much of revenue can come from procedures and how much they can charge for those procedures. It also oversees the state organization charged with implementing policy reforms.

Oversight organizations say their measures save consumers money, but they can choose when to enforce their rules. Last year, Vermont’s board allowed the state’s hospitals to exceed the prior year’s limits it set on how much health care systems’ revenues were allowed to grow, resulting in $100 million more in revenue for hospitals, according to VT Digger. The board took factors such as increased hospital visits for some facilities into consideration. One hospital reported receiving additional patients after a nearby facility filed for bankruptcy.

But it also cut the hospitals’ requested revenue growth from 4.6 percent to 4.3 percent for next year, which they say will save consumers $7.3 million overall. When the University of Vermont Medical Center exceeded revenue targets in 2018, the board made the hospital set aside $21 million to increase the state’s capacity for inpatient mental health services, in part by designing an acute inpatient psychiatric facility.

Vermont state Sen. Kevin Mullin, R-Rutland, who chairs the board, said the value of the board is to provide a long-range view on health care in the state and to encourage hospitals to provide more holistic care and to move away from a provider-based fee model, which may encourage hospitals to recommend more procedures than a patient needs. 

“We’re trying to correct something people have been trying to correct for 100 years,” he said. 

It’s an idea that could draw bipartisan support in Maine. Sen. Robert Foley, R-Wells, an insurance salesman who sits on the legislative panel regulating the industry, said he would be generally supportive of a state effort to control costs.

But Foley wanted to know how it would interact with organizations like the Maine Health Data Organization, which collects data on health care costs, and Consumers For Affordable Health Care, a charity that helps people find public coverage and does education and outreach work, before signing onto a proposed solution.

“The cost of health care is out of control,” he said. “There’s no question we need to do something about this.”


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