Maine employers who provide health in-surance for their employees know all too well about the dramatic rise in health care costs.

A recent statewide survey found that the majority of Maine organizations – businesses, public entities and nonprofits alike – have been burdened in each of the past three years with near double-digit premium hikes, ranging from 9 percent to 47 percent. That has translated to increases of $31,000 for one 33-person group to $16 million for the state’s employee health plan, representing a significant cost for all Maine taxpayers.

For my employer, the University of Maine System – with seven universities and numerous learning centers statewide – the cost of health care for fiscal 2003 is $44 million. The premium increase this year was $14 million, creating the equivalent of a 9 percent reduction in the University System’s annual state appropriation. Moreover, the system’s almost 5,000 full-time employees have been asked to pay a higher share of both premiums and co-payments.

The point is that health-care costs place a major financial burden on organizations of all sizes statewide, impacting both the quality and accessibility of health care for thousands of people. It’s time to put Maine on the path to sensible, affordable health care to ensure that employers and their employees don’t have to struggle to meet these ever-increasing costs.

That’s where the Maine Healthcare Purchasing Collaborative (MHPC) comes in. MHPC is composed of more than 50 employers who purchase health insurance on behalf of their employees. From Bangor-area companies such as Penquis CAP, Seven Islands Land Co. and Training and Development Corp. to scores of other organizations across the state, our members collectively represent 160,000 consumers. We have united to address Maine’s complex health-care challenges – key issues include hospital labor shortages, escalating prescription drug prices and inadequate Medicare reimbursement – all of which contribute to higher medical costs. Despite those challenges, we believe there is a three-part solution:

? Employers must accept that there’s a “business case” for quality health care

? Consumers need to be proactive about seeking quality, affordable care

? Providers who deliver high quality care should be rewarded

So what’s the business case for quality? Just one example is a recent report issued by the Midwest Business Group on Health, which found that 30 percent of all direct health care outlays nationwide are the “result of poor-quality care, consisting primarily of overuse, misuse and waste.” The report further states that “$2,000 of the $6,000 spent each year per employee is the direct result of poor quality.” If those findings are applied to the estimated $5 billion spent annually by the state of Maine, it means nearly $1.5 billion was spent unnecessarily this year alone.

The role for consumers, meanwhile, is easier to define but harder to implement. Research has shown that people often don’t view themselves as “consumers” when it comes to health care. Generally, they lack information on treatment options, providers (hospitals and physicians), prices and quality. But given access to reliable, comparative quality information, consumers can, and will, respond. And guess what? When it comes to health care, quality – not convenience – is the primary concern.

That said, it’s difficult right now to provide people with the information they need to make informed choices. The Maine Health Data Processing Center will begin to bridge that gap in 2003 when it starts to build the Maine health care claims data bank. Until then, many consumers may not realize that the costs for the same procedure can vary widely among facilities. For example, a study of Maine inpatient hospital payments in 2000 revealed that the price of a hysterectomy ranged from $4,546 to $14,416. That same study found that the price for major joint procedures ranged from $10,986 to $31,631.

Further, consumers often don’t recognize that the lack of accepted clinical guidelines for a specific treatment can result in higher costs yet diminished quality outcomes. The Maine Health Management Coalition is sponsoring a series of collaborative initiatives between purchasers and providers to establish quality measures that apply to Maine hospitals. In the meantime, there are national Web sites like the Leap-frog Group (www.leapfroggroup.org), HealthGrades (www.healthgrades.com) and the Agency for Healthcare Research and Quality (www.ahrg.gov./consumer/20tips.htm) that help consumers find out more about health care in their area.

The third piece of our reform initiative is for purchasers to reward providers for performance. We know that many Maine hospitals and physician practices are investing millions of dollars annually for quality improvement and patient safety. But for too long providers have been paid based on the volume of services they produce, not the health outcomes they deliver. It’s time for Maine’s purchasers of health care to pay for performance – a standard that applies to virtually every other type of business – which we believe will result in better outcomes for patients and ultimately cost less.

To that end, we want the Maine Legislature to amend existing regulations so that health plans can develop innovative products that offer incentives to consumers who choose providers delivering the highest-value care. MHPC introduced a bill last year to modify the current restrictions for pilot projects only. Though the bill passed in the Senate, it failed in the House, mostly, we believe, due to a misunderstanding of the bill’s purpose.

All told, the MHPC is committed to fighting for quality, affordable health care for two important reasons: The health of employees and their dependents is paramount. And a system focused on excellent, competitively priced medical care offers the best hope for containing costs and improving quality for everyone in Maine.

Tom Hopkins of Holden is the benefits manager at the University of Maine System and a board member of the Maine Healthcare Purchasing Collaborative. For more information about MHPC, contact Cathy Gavin, executive director, at cgmehpc@maine.rr.com or by calling 846-9889.