Group protests hospitals’ grip on purse strings amid reform

BANGOR – Members of the Maine People’s Alliance unfurled their trademark green-and-white banner on the sidewalk outside Eastern Maine Medical Center on Monday morning to protest Maine hospitals’ efforts to hold back health care reform. MPA alleges administratively top-heavy hospital groups shot down meaningful cost containment measures proposed in Gov. John E. Baldacci’s Dirigo Health reform plan and are threatening their work force with job losses and salary cuts to meet budget caps.

About 14 demonstrators attended the State Street rally, which was received with a smattering of honking from passing cars. They carried signs and posters reading: “Mainers Deserve Truth and Health Care”; “Massive, Wealthy and Invested”; and “Our Money, Our Hospitals, Our Health.” They chanted, “No more scare tactics” and “Health care, not millionaires.”

The grass-roots public policy group released a survey of top executive salaries in the nonprofit organizations affiliated with Eastern Maine Healthcare, ranging from $284,270 for David Peterson, president of The Aroostook Medical Center, to $83,652 for Helen Genco, president of Bangor Area Visiting Nurses. The combined salaries of Norm Ledwin, president of both Eastern Maine Medical Center and its parent corporation Eastern Maine Healthcare, were shown to be $366,174. Many executives also draw salaries and other pay benefits for their administrative roles in for-profit affiliates, the report stated, but those figures are not public information.

The report also presented information on EMH affiliates’ revenues, expenses and assets. All information was drawn from IRS reporting for fiscal years 2001 and 2002.

“There’s a lot of money involved in this [business],” said MPA community organizer Jesse Graham. “Hospitals should not be threatening their employees with job loss.” Graham said MPA has heard, primarily from nurses, that hospitals are using the Dirigo caps as a reason to offer lower pay, fewer benefits and other changes in labor agreements.

The Maine Hospital Association argued aggressively this spring against key elements of the governor’s Dirigo Health reform, especially a provision calling for a “global budget” shared by all hospitals and another that would have imposed caps on hospital profits and prices. Although the caps were “voluntary,” language in the original legislation enabled the state to impose price regulations should hospitals fail to rein in their budgets.

Claiming the plan would effectively shutter many of Maine’s smaller community hospitals and force layoffs throughout the health care system, MHA representatives successfully eliminated the global budget phrasing and dispensed with the threat of state regulation. With these and other changes, MHA said it could support the Dirigo reform, which aims to creates a first-in-the-nation, state-run health insurance plan while increasing quality and holding down costs.

Hospital association president Steven Michaud said Monday that MPA’s allegations of obfuscation are “incomprehensible” now that the global budget and the mandatory caps are gone. “We’re encouraging our members to comply,” he said.

That said, Michaud added, “People continue to believe they can ask hospitals to cut tens of millions of dollars out of their budgets and not impact labor.” The issue of CEO compensation is “a very sexy topic for the media, but you could eliminate all those salaries and never even notice it” in the overall budget.

EMH spokesperson Jill McDonald could not verify the accuracy of MPA’s salary figures, but said the corporation’s board of directors is satisfied that executives in the sprawling company receive pay that is competitive with similar positions in other areas. “It doesn’t cost any less to run a hospital in Maine than it does anywhere else,” McDonald said.

Hospitals will have to look hard for ways to achieve the cap in margins and prices they committed to in accepting the revised terms of the Dirigo plan, she said.

“As far as I know,” McDonald said, “everything is on the table.

“Hospitals will do what they’ve been asked to do,” she said, but as a result, “the face of health care will look different.”