Hospital Triage

Hospitals account for about a third of health care costs in Maine. Their charges tend to be higher than those of hospitals in nearby states and their profit margins are higher, though the population they serve is poorer and, as nonprofit organizations, those profits look generous. They do not charge with consistency for identical procedures, nor are they equally financially sound. Yet for these difficulties, a state commission’s recent recommendations to make hospital care more affordable and accessible were properly modest.

Properly, because some of the big issues that drive up costs in Maine hospitals are not complicated and do not require major reforms to enact. Sometimes, they merely require more information in the hands of patients combined with a greater interest by patients in the cost of care. The draft report by the Commission to Study Maine’s Hospitals is a thoughtful document, though an incomplete one, but likely will be helped further by the public hearings that will be held in three locations around Maine early next month.

A fundamental question in health care savings is whether Maine’s hos-pitals will become more effective through competition or cooperation. A previous model in Maine encouraged competition; the commission, led by Bill Haggett, former CEO of Bath Iron Works, chose cooperation, or at least partial cooperation. For instance, it proposed the state create the Consortium for Hospital Collaboration to establish standards of efficiency and improve financial health of struggling hospitals, and it would amend state anti-trust rules to let hospitals share more information.

However, the commission would also revise insurance rules that limit the incentives insurers can offer to persuade patients to use higher quality service at more distant hospitals, which, if the insurers are effective, should increase competition. Health care reformers have for years proposed to make consumers more sensitive to price; seeing it proposed in a way that lawmakers could do something with is encouraging.

Last summer, the commission caused hospital administrators’ hearts to race when a leaked draft of a white paper talked about closing several of the 36 hospitals in Maine. Some of the administrators saw crisis in this, others saw opportunity. All they will see in this most recent draft is a sharp retreat from the idea: “The commission makes no specific recommendations relative to hospital closings or mergers but urges every hospital board to evaluate possible opportunities to minimize duplication. …” That is a remarkably bland statement for what was a contentious issue among the commission members.

Closing a hospital may be even tougher than closing a school, but informing consumers while expanding the reach of insurers could decide the issue without the state actually specifying closures; the hospitals may be forced into greater efficiency through cooperation. In that sense, the commission’s report begins a responsible partial answer to the much larger question of controlling health care costs in Maine.