New EMHS chief reflects on health care challenges

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BREWER – Three months after arriving in the Bangor area to assume the leadership of Eastern Maine Healthcare Systems, corporate president and chief executive officer Michelle Hood took some time this week to discuss her new job.

In her fifth-floor office in the Whiting Hill health care park in Brewer, with a sweeping view of the rocky hills to the southeast, Hood talked about the challenges to providing high-quality care for Maine residents and the changing face of the nation’s health care system.

Meeting health care needs

in Maine

Hood said her first few months on the job have been busy and interesting as she has learned about the complex corporation, Maine’s distinctive demography and the state’s efforts to rein in spending while increasing access to medical care.

“I’ve been here for three months now, and I’m beginning to feel settled in,” she said. “Because the interview process was lengthy and intense, the [EMHS] board was able to give me a lot of information ahead of time. I had plenty of opportunities to ask questions and do research. Everyone was very open and forthcoming about what the system has been through and where it stands now. There haven’t been any huge surprises.”

She praised EMHS for its diversity, noting that the system’s seven affiliated medical hospitals, free-standing psychiatric hospital, community medical practices, nursing homes and home care agencies are able to provide consistent health care, limiting the errors and inefficiencies that too often characterize health care in rural areas.

“We’re challenged here in Maine by the geographic distribution of our population,” she said. Because people in outlying areas need access to emergency hospital care, the state has more small community hospitals than would normally be supportable – but many hospitals have downsized and appropriately limited the services they offer so they can stay in business, she said.

Most Mainers have access to primary care services and basic diagnostics in their home communities, Hood noted, and through technology, rural providers can confer with medical specialists in Bangor, Boston and beyond. The system’s flagship hospital, Eastern Maine Medical Center in Bangor, accepts patients in need of more specialized care than can be provided by smaller rural hospitals.

“My biggest concern, looking out 10 years or so, is that our aging population and the prevalence of chronic diseases will increase the demand for inpatient services. At this point, Maine is making do with a bed-to-patient ratio that is significantly lower than the national average,” she said. “But I think in the next 10 years or so we’ll see a real bed crunch; already at EMMC we have many days when we have to hold people in the emergency department while we wait for a bed to be available.”

Hood said the decision to add significant hospital bed capacity in Maine is made more complicated by the state’s certificate of need process, which approves or denies major investments in facilities or technology based on demonstrated need and affordability.

“Sometimes I think [the certificate of need] is a good thing, but many other states have set it aside and let the free market determine bed capacity,” she said.

Dirigo Health

and Medicare Part D

Hood said she’s still getting up to speed on the state’s contentious Dirigo Health initiatives, aimed at holding down costs, improving quality and increasing the availability of affordable health care coverage. Maine hospitals have vigorously resisted many of the Dirigo measures, but have voluntarily held down profits and spending for the last two years.

“At our hospitals, the incidence of utilization by Dirigo-insured patients is very low,” Hood said. “We’re not seeing any significant decrease in our bad debt,” one goal of the Dirigo program.

Hood said that although hospitals have had some success in holding down costs and limiting losses, it doesn’t necessarily mean health insurance companies will be able to charge less for their policies, as the Dirigo initiatives call for.

“Hospital charges account for just over 30 percent of total health care spending. More and more, health care services are delivered outside the four walls of the hospital,” she pointed out. “There are many other factors in how insurers price their products.”

Asked for her thoughts on the new Medicare Part D prescription drug plan, Hood said it was necessary to add drug coverage to the Medicare plan. Medicare, she noted, was designed in the 1960s, “when there was no concept of the pharmaceutical revolution and the ability to treat so many diseases and symptoms with medicines.”

But Hood said that by protecting consumers from the costs of their medications, the highly politicized plan that took effect at the beginning of this year provides a “perverse incentive” for patients to demand, and physicians to prescribe, more and more drugs. Demand is further increased, she said, by the drug industry’s direct-to-consumer advertising.

Overdue for reform

Health care finance issues in Maine are similar to those she experienced in Montana, Hood said, and reflect the larger national debate.

“There’s a lot of concern everywhere about how much money gets spent on health care,” she said. “It’s an important issue. But, as a nation, if we weren’t spending 18 percent of the [gross national product] on health care, with all its positive trickle-down effects on our economy, what would we be spending it on?”

Nonetheless, she said, there’s no question that the current system of payment needs to change.

“We’re all struggling with the need for a major reform of the health care payment system – both public payers like Medicare and Medicaid, and private insurers,” she said. “I’m not a proponent of a single-payer system, but I don’t support the system we have now, either. It’s been patched together with glue and tape and string for so many years, it’s just a mess of layers and complications that no one understands very well.

“We’re funded by payers who never see the product, we serve customers who don’t pay the bills, and our services are ordered and delivered by doctors who historically haven’t had any skin in the game when it comes to efficiency or outcomes.”

The complexity of health care finance and the many variables that affect patient care make it difficult for the industry to account accurately for its use of taxpayer dollars paid out by Medicare, Medicaid and other public programs, Hood acknowledged. While progress has been made in reporting treatment results and prices for common procedures so consumers can compare hospitals and doctors, the reporting of hospital costs and spending remains indistinct, she said.

The structure and accountability of health care finance is unlikely to improve until public pressure and political motivation are aligned, Hood added.

Health care finance “is in desperate need of reform, but I don’t see it being undertaken in the next couple of years,” she said. “The public doesn’t demand it, and that’s at least in part because they’re so shielded from the issues.”

Good news for cancer care

Despite some questions about financing the project, Hood said, cancer patients in the northern part of Maine can expect to see an improved regional treatment center in the near future. The state’s approval last week paved the way for Eastern Maine Medical Center to construct a new home for its CancerCare of Maine program. The expanded facility will be located in a new building at Whiting Hill, the second of five structures envisioned for the EMHS-owned development in Brewer. The building will also house a new genetic research laboratory.

Hood said the state’s requirement that the hospital come up with 60 percent of the cost of the $41 million facility from its own resources rather than through borrowing is “under continuing discussion.” The hospital had originally proposed borrowing 80 percent of the cost.

“If we can get good tax-exempt financing, why would we liquidate our investments?” Hood asked. “Maybe we haven’t shared all the information we need to.”

Nonetheless, she said, “I am 100 percent sure we will get the new cancer care center.”