AUGUSTA – Taking a step toward overhauling Maine’s health care system, Gov. John Baldacci issued an executive order Friday formally establishing a panel to promote cooperation and generate savings within health benefit programs that rely on public funds.

Appointments to the Public Purchasers’ Steering Group are expected next week.

Also on Friday, Baldacci wrote a letter to Maine’s hospital trustees and top executives expressing optimism that they will try their best to curb increased costs.

“We need to work together to constrain the rate of health care cost growth and our preliminary review of data suggests to us that hospitals do have some important opportunities to meet this challenge,” Baldacci wrote.

The public purchasers’ steering group is expected to make an inventory of health care and related expenditures by public purchasers and develop an overall purchasing strategy.

One top priority is an examination of the feasibility of a group purchasing pharmacy program.

Steering group members are to include representatives of the benefits trust of the Maine Education Association, the Maine Municipal Employees benefits trust, the Maine School Management Association and the University of Maine System, as well as state officials.

“About 500,000 Maine citizens receive health benefits through public sector programs and employment funded by state and local tax dollars,” Director Trish Riley of the Governor’s Office of Health Policy and Finance said in a statement.

“By better coordinating all these disparate programs Maine can be a more prudent buyer of health care and save taxpayers money in the long run,” she said.

Riley has served as Baldacci’s top health policy aide and was instrumental in the design and enactment of the administration’s Dirigo Health legislation, which aims to expand access to affordable insurance coverage by 2009 to all Mainers who need it.

The new law also seeks to lower health care costs through voluntary pricing caps.

“The legislation, which becomes effective Sept. 13, 2003, establishes a voluntary cap of 3.5 percent on hospital cost increases,” Baldacci noted in his letter to hospital officials.

“Hospitals are also asked to hold their consolidated operating margins to no more than 3 percent in their first fiscal year beginning on or after July 1, 2003,” he added.

In his letter, Baldacci said there was “some acknowledged uncertainty about the voluntary caps,” but suggested that “a hospital’s demonstrated best faith effort to meet these objectives will comply, if not with the letter of the law, than certainly with its intent.”

Baldacci, a former state legislator and congressman who took office as chief executive in January, pledged during his successful gubernatorial campaign to make health care available to every Mainer.

The administration has said 136,000 Mainers are without coverage at any given time, but the number swells to nearly 190,000 over the span of a year.

Baldacci asserted in the new executive order that “collaborative purchasing by public entities will create economies of scale and improve service quality.”

The overall goals of the new legislation, he said in his letter to hospital officials, are “assuring all Mainers access to health coverage, constrained cost growth and quality that continues to improve.”

AP-ES-08-29-03 1415EDT

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