If we want to provide insurance for everyone, providers must rein in costs.
As I went door-to-door last year meeting with residents and talking about their day-to-day concerns, health care was the top issue. Everyone was worried. Businesses couldn’t afford it for their employees. Many people simply had no coverage and couldn’t possibly afford to buy it, and premiums were skyrocketing.

What family could afford to buy a policy for over $1,000 per month?

What business could continue to cover employees with premiums rising, often at 50 percent annual increases?

How could we not take action when people without insurance suffered from serious illness? Clearly something had to be done.

Now we have a chance to really make a difference.

The governor has proposed a health care package that deals with the tough issues in health care – access to affordable coverage, quality of health care and, significantly, reigning in costs.

What does the governor’s health care package do? It establishes Dirigo Health, a public nonprofit agency, to buy a comprehensive health care plan from insurance companies for small businesses, individuals and the self-employed. Costs will be reduced because everyone who enrolls will benefit from a nonprofit large group plan, with subsidies available for moderate- to low-income people to help them pay their premiums.

The plan would also expand Maine-Care (Maine’s Medicaid program) to about 20,000 more low-income people who are just over the current Maine-Care income limits. Employees who are also eligible for MaineCare will be able to get most of their care through Dirigo Health if their employer purchases that plan. This will mean their doctors, hospitals and other health care providers will be paid market rates for their care rather than the lower MaineCare rates.

In its first year, the plan is projected to provide coverage to 59,000 Maine people – roughly a third of our uninsured. The governor’s goal is to provide coverage for all Maine people in four years.

But Maine cannot afford to provide health coverage without doing something to rein in health care costs.

The cost of comprehensive coverage for small businesses rose 58 percent between 1996 and 2001, and many business owners I talk to are seeing increases of that magnitude in just one year. This simply must stop, and there’s the rub. Controlling costs means that health care providers and insurers will have to rein in their costs and their prices and that is causing some to oppose the plan.

The governor proposes to control costs in four key ways: controlling hospital and physician costs, including expenditures in high cost equipment; controlling and regulating insurance rates; enhancing Maine’s public health; and by insuring more people, the cost of caring for the uninsured in hospital emergency rooms will no longer be shifted to the insurance companies.

Hospitals, alone, are expected to gain about 30 million new dollars just in the first year from treating the newly insured under the governor’s plan. That is $30 million less that they will have to pass on in charges to insurance companies and, ultimately, less money that we have to pay in premiums!

Hospitals are raising strong opposition to that portion of the plan that asks them to rein in costs.

Hospital employees, frightened by what their managers are telling them, are calling me and other legislators afraid that they will lose their jobs because of this bill. I fear they are not being told the whole story.

Hospitals are asked in the plan to voluntarily hold the increase in their rates down to 3 percent over the next year. If at the end of the year, these targets have not been met, then the governor, working with the providers, would develop a plan to meet reasonable targets.

In addition, a plan for the future of Maine’s hospitals would be developed by a working group, including hospital representatives, to look at how to efficiently allocate resources and to try to keep spending within the rate of inflation generally established for hospitals.

The working group will also work to develop a more efficient allocation of expensive technological resources, while preserving access to care in rural areas. The plan would not permit continued expensive health care investments without a certificate of need that takes the resulting plan into account.

While the exact targets that should be met by hospitals are still being reviewed by the Legislature, the truth is we cannot solve this health care crisis without looking at hospital spending.

Maine hospitals have higher growth in capital expenditures (like buildings and technology), higher profit margins and higher cost per patient (adjusted for wage and mix of cases) than hospitals in New England or the United States. As hospitals try to compete with each other for business, we have more expensive technology than our population can support. Incredibly, we have more MRI machines than all of Canada. Indeed there was testimony at the hearing on the bill that an MRI costs $1,200 in Maine compared to $600 in Boston!

I want to be sure that Maine’s and Lewiston’s hospitals remain high quality, financially sound institutions and I want to deal with skyrocketing health care costs, including hospitals costs.

I am looking forward to the coming weeks as we tone down the political rhetoric and discuss, based on the facts, the best way to assure efficient, high quality, accessible care for everyone in Maine.

The governor has laid out the most thoughtful plan we have seen in decades and we have a great opportunity if we can have the political courage to seize it.

Rep. William Walcott, D-Lewiston, is a first-term lawmaker and serves on the Joint Standing Committee on Health and Human Services.