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In the past 10 years, Maine's health care costs have more than doubled, from $3.7 billion in 1994 to an estimated $7.7 billion in 2004. Costs have increased much faster than personal income has grown. As a result, Maine is the fifth highest state in health care spending as a percentage of income.
This path is not sustainable and premiums cannot be reduced without addressing the overall growth of health care costs.
Dirigo Health will work to contain the out of control health care spending through the following strategies:
| • | Reduce Bad Debt and Charity Care: Currently the cost of bad debt and charity care is estimated to be $275 million per year. Dirigo Health will work to reduce this through greater access to health coverage. More >> |
| • | Strenthen the Certificate of Need (CON) process to ensure more rational development of health care services. More >> |
| • | Create Capital Investment Fund: Contain costs by limiting capital investments in the health care industry to those which are in the best interest of the people of Maine. More >> |
| • | Transparency in prices: Dirigo Health recognizes the value of having informed consumers and is taking action to make health care prices easily available. Providers are required to let Maine citizens know the prices of common procedures and other information so customers understand the costs of health care and make informed decisions. |
| • | One year moratorium on capital expenditures: The Governor imposed a moratorium on the Certificate of Need process, thereby limiting costly new construction and other capital expenditures in the health system. This “cooling off” period allowed for needed planning, culminating in the State Health Plan and its Capital Investment Fund provisions. |
| • | Voluntary caps on costs and operating margins: Dirigo Health requests hospitals and other providers to limit their cost growth to 3% per year and their operating margins to 3.5%. Insurers are asked to limit their operating margin to 3.5%. |
| • | The Commission to Study Maine's Hospitals is undergoing a thorough review and analysis of Maine's system of hospitals. This review includes the role in the community, the structure and finances of our hospital system. |
| • | Medical malpractice Study: The Superintendent of Insurance will be required to study medical malpractice cases and malpractice insurance rates in Maine. |
| • | Financial Incentives for health care customers: Health insurance carriers will be permitted to offer their enrollees financial incentives to travel further to undergo non-emergency surgical procedures if the carriers can demonstrate cost-effectiveness and that the quality of care is equal to or better in the more distant location(s). |
| • | Strengthened oversight of insurance rates: Additional oversight will help slow the increase in rates and make them more predictable for businesses and consumers, and ensure increases are justifiable by market trends. There will be strengthened oversight, review and approval of small and large group insurance rate filings by the Superintendent of Insurance. |
| • | Accountability for all Insurers: All health insurers doing business in Maine will be required to comply with standardized annual reporting requirements. These requirements will include prescribed definitions of items including administrative costs and medical costs, which will allow easy comparisons of loss ratios and profit across lines of business and across insurers. |
In addition, Governor's Office of Health Policy and Finance, with input from the Advisory Council on Health Systems Development, is responsible for the creation of the biennial State Health Plan to strategically improve the allocation and coordination of our health care resources to help Maine become the healthiest state in the nation.
| • | Work to ensure the appropriateness and quality of care by identifying variations in practice patterns, utilization of services and outcomes of care. |
| • | Continue Maine's historic work to ensure our citizens have access to needed pharmaceuticals at reasonable and affordable prices |
| • | Provide Guidance for Determining the Level of Future Investment in Health Care Services, the Issuance of Certificates of Need and Related Lending Decisions |
| • | Strengthen Maine's Certificate of Need Program by setting out criteria for prioritizing projects that are submitted for review and approval. |
| • | Establish Statewide Health Expenditure Targets for Maine |
| • | Promote the Concept of Paying for Performance (PFP) to Public Purchasers |
The Plan also lays out a process called “Tough Choices” to engage the people of Maine in prioritizing aspects of our health care system. A series of public forums will begin in November, 2004.
