Scott Miller

During our “Hancock County Healthcare” discussion today, John Ronan mentioned the incredibly anemic margins for Maine Hospitals—with over half of the hospitals in our state losing money (after fundraising, donations, etc.).

Here is a link to a Maine Hospital Association document that shows the margin trends from 2011 to 2016 (on page 17 of the pdf document). There’s some other good stuff (at least I think so) elsewhere in that document.

Despite the fact that our conversations often touch on healthcare (even if they start with foreign affairs!), this coming Monday’s discussion will be focused specifically on healthcare in Maine and Hancock County.

I thought this would be a suitable topic after reviewing Northern Light Health’s 2018 “Community Benefit Report” (required under IRS regulations) and observing that the system provided more than $220 million of benefits to the communities it serves. That compares to less than $9 million of system “net income” in that year. The good news is that margins were positive; the bad news is that margins are thin. (This isn’t a Northern Light Health-specific issue—many of the hospitals in Maine are losing money and similarly-situated rural hospitals across the country are facing the same margin pressures.)

If you review the report, you will note that a very substantial portion—more than 50% for both the system and Blue Hill—of the “Community Benefit” is the discount to cost (not price) paid by Medicaid and Medicare for services provided to their beneficiaries.

So I hope we can use this perspective as a springboard to discuss hospital finances—to play “CEO (or President)-for-a-day:”

• How can hospitals make up for the un- or under-paid costs of services provided to patients?
• Is there “fat” in the system in amounts large enough to offset these costs?
• How should increasing market costs (provider compensation, medical devices, prescription drugs, non-provider salaries & benefits) be managed?
  • Wage caps?
  • Curtailed services (type, availability, hours)?
  • Reduced investment in facilities and equipment?
  • Higher prices for those who don’t have the Federal government’s ability to dictate what it will pay?
• How can a commitment to quality be maintained in this environment?

I have invited John Ronan, President of Maine Coast Hospital and Blue Hill Hospital and the Chairman-elect of the Maine Hospital Association, to join us on Monday. In addition to providing an insider’s view on local hospital finances, he can speak to some of the issues facing our local facilities and provide context on the rest of Maine as well.

Homework

If you’re eager to do some homework, here are some resources that you might want to review:

Medicare for All

• Bernie Sanders says Medicare-for-all would reduce health spending. But that’s unclear. (Washington Post, April 17)

System/Hospital IRS Form 990s

(These show financial results, community benefit, compensation)

• 2016 Northern Light Health
• 2016 Blue Hill Hospital
• 2016 Maine Coast Hospital

Electronic Medical Records

And this one, courtesy of Retta Clews:

• Death by a Thousand Clicks (Kaiser Health News)

On Monday, April 15 (Patriot’s Day), we’ll discuss how the country, and therefore the demands on Washington legislators, have changed since the “Founding Fathers” drafted the Constitution.

In particular, since the size, scale and scope of the nation have grown, and Federal control of each citizen has also grown, legislators’ (and judges’ and Executive Branch members’) “span of control” has grown dramatically—well beyond what any one person can fathom.

Should this increased complexity be reflected in changes to our constitution and laws? For example:

• As our 535 legislators have become (understandably) reliant on experts (lobbyists) to help them navigate the complexity, how should lobbyist influence be managed? Are current laws adequate? Do we need more control? Or different control mechanisms?
• Recognizing that no legislator will ever become expert in everything under their control, should we accept and recognize that fact by establishing reasonable term limits? What maximum term seems most appropriate? What benefits would there be? What detriments? How might term limits be accomplished?
• In a similar vein, is it time to reconsider the lifetime appointments of Federal judges (and justices)? Net-net, is this unlimited tenure a good or bad thing for the country? Is the fact that it is now “topical” mostly a reaction to President Trump’s appointments, or has increasing desire for judicial term limits been a consistent trend across time?

By the way, here are two “good reads” from the New York Times published over the course of the last week. We’ve touched on these topics many times, and they struck me as being reasonably balanced. Others may (will) disagree:

The Problem With Putting a Price on the End of the World (NYT Magazine, 4/9/19)

Would ‘Medicare for All’ Save Billions or Cost Billions? (NYT 4/10/19)