You May Want To Contact Your Legislators

To the Editor:

As the Legislature prepares to act on the Fiscal Year 2009 supplemental budget and begins serious deliberations on the next biennial budget, it is a good time to think about how some of the proposed budget reductions will affect health care in our community.

Over the next three years, the proposed budget cuts would reduce reimbursements to hospital-based physicians in our county by $400,000 a year, cut reimbursements to St Andrews Hospital by $95,000 annually and suspend paying the $4.8 million currently owed to Miles and St. Andrews.

Community hospitals are non-profit institutions that operate on very slim margins. Reductions of this magnitude will have a real impact on health care in our county.

First, a little background: Budget discussions typically treat the components of our health care system as independent and unrelated. This is not the case. Lincoln County Healthcare (the Miles and St Andrews organizations) is a system. We provide inpatient and outpatient services, physician services, long-term care, home health and hospice. Because many rural health services are not financially viable, our hospitals provide these services because they would not exist otherwise.

For example, last year Miles Memorial Hospital and St. Andrews spent $4.5 million to subsidize their hospital-based physician services in Lincoln County, including primary care and basic medical specialties such as general surgery, orthopedic surgery, anesthesia, obstetrics, pediatrics and emergency room services.

When the state reduces hospital reimbursement, it not only affects hospitals it also reduces their ability to provide all sorts of services to our communities.

Second, the reimbursement cuts now under consideration are only part of the picture. The larger view includes $424 million the state owes to hospitals for MaineCare (formerly Medicaid and Cub Care).

St. Andrews and Miles are still owed $4.8 million in payments for treating MaineCare patients from 2004 through 2007. Miles only recently received the final settlement for payments owed for 1999 through 2003 this month.

So how will these proposed reductions affect our communities’ health care? Let’s start with physicians. Physicians in hospital-based practices

More than 50 percent of the doctors in Maine are employed by hospitals. In rural areas like Lincoln County, that number is much higher. Increasing administrative burdens and poor reimbursement from Medicare and MaineCare have forced many doctors to leave private practices.

Without hospital-based physicians, most rural areas in our state would suffer severe physician shortages. Last year, there were several newspaper accounts of private physician practices that closed their doors to MaineCare patients because of poor reimbursement. Some even stopped treating their existing MaineCare patients. The safety net for those patients has been hospital-based physicians, but the proposed reductions pose a direct threat to that safety net.

Critical Access Hospital CutMany people are surprised when they learn that the State of Maine taxes not-for-profit hospitals. The state does this to artificially inflate the cost of hospital care, which in turn increases federal matching dollars to cover MaineCare patients. Unfortunately, the “match” payment, which is supposed to compensate for the tax, is significantly less than the tax paid in Lincoln County.

In 2005, the Maine Legislature increased the MaineCare reimbursement for Critical Access Hospitals by 16 percent to help offset losses from this tax.

The proposed 16 percent reduction in MaineCare reimbursement in the proposed budgets for the next three years will cost St. Andrews $95,000 each year.Suspending Prior YearNow that the state is cutting reimbursements for physicians and cutting Critical Access Hospital reimbursements, what will happen to the $424 million the state already owes Maine hospitals?

The budget for Fiscal Years 2010 and 2011 include no payments on that debt, breaking an agreement reached with the state two years ago.ConclusionAll together, the impact of the proposed cuts to our hospitals is $495,000 a year. When you add the $400,000 increase in the hospital tax imposed last year, St. Andrews and Miles are facing $895,000 of newly-created, government-generated costs. That number is greater than three times our net income from operations last fiscal year. In addition to these costs, we are also owed $4.8 million from as far back as five years ago.

Miles and St. Andrews, and all hospitals in Maine, continue to accept responsibility for the health of their communities. The proposed cuts reduce the availability and quality of all our community health services. These unnecessary costs are driving up the cost of health care not only in Lincoln County but across the state.

At a recent public hearing on the budget, Legislators asked hospital representatives “Where else in the State budget would you make cuts?”

In return, I am compelled to ask “Which health care services in Lincoln County would you chose to cut? Would you cut emergency room services, nursing home care, access to physicians or home health care?”

If you are concerned about preserving your access to health care services in Lincoln County, and making those services affordable, you may want to contact your legislators and express your opinions.

Sincerely,

Robert Conn, Treasurer,

Lincoln County Healthcare Board of Trustees