PRESCRIPTION FOR SAVINGS

A recent report found that health care spending in Maine is well above the national average with worse than average results. The report calls for an investigation of why the costs are high. What is needed even more is a commitment from lawmakers and regulators to do something with this information.

The reasons for Maine’s high health care spending are generally known: Chronic diseases are prevalent here and there is too much duplication. Maine, for example, has 1.5 times as many hospital-based MRIs as the U.S. average and the state has more hospital beds and rural clinics based on population than the national average. This, naturally, comes at a cost.

Maine’s health care spending, $6,540 per capita, was the second-highest in the country in 2004. The national average was $5,283.

About 9 percent of the spending difference is attributable to Maine having an older than average population. Another cost-driver is chronic illness. The report, by the Advisory Council on Health Systems Development, calculates that 37 percent of the increase in health care spending in Maine between 1998 and 2005 was due to chronic conditions, mainly heart disease, mental illness, lung disease and cancer.

A larger problem is that Maine has more medical infrastructure and equipment, per capita, than other states. For example, Maine has more hospital beds per capita than any other New England state, yet the state’s occupancy rate for these beds – 63 percent – is the lowest in New England. Maine has twice as many free-standing MRIs as the national average.

There is also huge variation in how patients in the state’s different hospitals are treated for the same illness. Costs varied as much as 60 percent. The report concluded that if hospitals in Maine lowered their costs to the median of their peer group (typically hospitals of similar size), more than $100 million would be saved each year.

Past efforts to reduce health care duplication have largely failed. The most recent, the Commission to Study Maine Hospitals, which issued its report in 2004, became bogged down in disagreement about how hospital costs were assessed and how formal a proposed purchasing consortium should be.

An early draft of the commission’s report mentioned closing some of the state’s 36 hospitals. The final report urged “every hospital board to evaluate the possible opportunities to minimize duplication.”

Through legislation passed last year, the advisory council has been charged with reviewing what drives health care costs in Maine and recommend places for savings. A report is expected next year.

Knowing what causes high health care costs in Maine is critical, but doing something about it, as the experience of the hospital study commission shows, is even more difficult.

Reducing costs and improving care have long been studied and talked about. The work of this advisory council offers lawmakers and regulators another opportunity to do something about it.