Dems say hospitals will be paid upfront in plan to reform health care system

AUGUSTA—Democrats today unveiled a comprehensive “Hospital Repayment and Reform” plan that would make the final payment on Maine’s hospitals debt and institute reforms to help prevent outsized medical bills in the future.  The plan would provide sustainable healthcare for more Maine families.  

“Democrats have always been focused on repaying the state’s debt to the hospitals--even during the worst recession of our lifetime,” said Senate President Justin Alfond of Portland. “Today, we commit to a swift upfront and immediate payment in full to put to rest our debt obligation.”

Under the Democratic Repayment and Reform Plan, the hospitals will be paid in full by September 30, 2013, from the financing of the state’s liquor contract. By paying the hospitals prior to October 1, 2013, the state will save $5 million. The payment would trigger a federal match of $298 million, completing final payment to Maine’s hospitals.  Key components of the reform package include: increasing transparency in medical billing, tying payments from the state to positive health outcomes; and accepting federal dollars to expand access to health care under the Affordable Care Act.  

Alfond added, “It’s important to remember that this issue is not just about debt, It’s also about high health care costs. And, any plan to pay off debt to the hospitals should also address the cost drivers and reforming our system to prevent this debt from building up again.”

Over the last decade, Maine hospitals have been paid $3.7 billion in combined state and federal dollars to repay past debt and to maintain services. 

The final payment to the hospitals under the Democratic plan comes at no financial risk to Maine taxpayers and does not include a borrowing scheme. The money would come directly from the winning bidder to the state’s $400 million liquor business.

“Not only will we ask for the hospitals to account for the spending of the money that we repay to them through this final debt payment. Going forward, we need to understand exactly what we’re paying for and why,” said Speaker of the House Mark Eves of North Berwick. “From bandaids to boardrooms and aspirins to X-rays, consumers have the right to know how our healthcare dollars are spent.”

A recent report by Time Magazine revealed exorbitant medical costs hidden in bills from hospitals in other states, including one charging $77 for a box of gauze for a patient diagnosed with lung cancer. 

Democrats also said hospitals and Governor LePage should support accepting federal dollars under the Affordable Care Act to increase access to health care for up to 70,000  Maine people, through so called Medicaid expansion.  Accepting the federal dollars would save the state $690 million over the next decade, according to both the conservative Heritage Foundation and the nonpartisan Kaiser Foundation. 

Maine hospitals would also realize savings from the reduction of charity and preventable emergency care.

“What’s at stake is a family doctor for every family,” said Eves. “Other states around the country, including states with Republican governors have put politics aside to do what’s right for their people.”

Since Governor LePage came into office, his administration has cut health care for thousands of Maine people, yet costs continue to rise. In 2014, 44,000 Maine people will be denied health care, including veterans, the elderly, and people with disabilities. 

Governor LePage and the Republican Party have politicized the hospital debt, using it as ransom to release key economic investments needed for job creation in cities and towns. Last week, LePage twice threatened to launch a veto spree until his demands were met. 

Alfond added, “It is our hope that our plan will end the political rhetoric and games.” 

Governor John Baldacci inherited 11 years of unpaid hospital debts on his first day in office.  In 2009, Democrats changed the way Maine pays it’s hospitals to a “pay as you go system” to prevent the cycle of debt.  In 2010, the Democratic system went into effect and has been administered by the Republican Administration.