November 10, 2024
Business

Maine hospitals seeing healthy profits, report says

AUGUSTA – Many Maine hospitals were usually more profitable than those in the rest of the country from 1993 to 2002, according to a new report done for a government-appointed group studying the future of Maine hospitals.

The Baldacci administration says the report, drawn from audited financial reports, shows that hospitals can slow their spending without compromising fiscal health or quality of care.

But hospitals say the report shows they have been fiscally responsible, and the data need to be looked at year by year. They point out that in 2002, the median operating margin for Maine hospitals fell below the national median and was only slightly higher than the region’s.

Profits from patient services dropped as hospital expenses grew, reflecting the higher number of people using the hospitals, said David Winslow, vice president of the Maine Hospital Association.

“It’s interesting to look at the late 1990s, but it’s not particularly relevant to where we are now,” Winslow said.

The report was written by Nancy Kane, a management professor at Harvard University’s School of Public Health. Kane, who was hired by the Governor’s Office of Health Policy and Finance, has helped states such as New Hampshire, Massachusetts and West Virginia analyze hospital efficiencies.

How the data is interpreted is important because it could influence the decisions of the Commission to Study Maine’s Hospitals, a group that includes a business leader, consumer advocate and several health care professionals. The report was presented to the commission on Monday.

The commission, created by the governor’s Dirigo Health reform law a year ago, will present recommendations in November to the Legislature regarding hospital spending, as well as the quality and accessibility of care.

Kane said most Maine hospitals have had healthy operating margins because they’re often the only game in town. In states such as Massachusetts, where there is more competition, managed care drove down hospital profits.

Kane, who supports the Dirigo Health reform law and has been working with the commission since last September, said Maine hospitals can cut expenses by investing in a statewide electronic patient record system that could be accessed by doctors to cut down on time and errors.

“They have the money to spend on improving care and reducing costs,” Kane said.

It’s not clear how much sway the report on hospital finances will have. But commission chairman Bill Haggett, chief executive officer of Naturally Potatoes and former chief executive officer of Bath Iron Works, described it as “excellent background data” that “will be very helpful.”


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