On Wednesday, regulators at the Department of Health and Human Services will hear a proposal concerning Brunswick’s two hospitals that could set the tone for health care over the next decade in Maine.
Central Maine Healthcare is bidding to acquire Parkview hospital in Brunswick, after taking over management of the 55-bed hospital several years ago and covering its losses.
Mid Coast, with 92 beds, has a competing proposal to merge with Parkview, arguing that it could reduce health-care costs in the area by $24 million a year.
The rivalry between the two hospitals can accurately be described as heated, and it’s also clear that Parkview sees CMHC as its white knight, rescuing it from the coming Obamacare era when hospitals will have to meet higher standards for care while accepting tighter cost controls.
But there’s more to it than that. With American health care costing 50 percent more than anywhere else in the world, we can no longer avoid re-examining what we pay for and how we pay for it. And hospitals are a big part of the picture. Together with the doctors who staff them, hospitals directly spend more than one-third of our health-care dollars, and they influence the spending of most of the rest.
The most important thing to remember is that having more hospitals and hospital beds is strongly associated with higher per patient costs. In health care, having more providers drives prices up, not down. That’s because our entire system is based on reimbursements rather than anything resembling price competition.
Conservative theorists often strive to outline a health system that would have such price competition, and the Romney-Ryan plan is apparently based on it, but such a system exists nowhere in the world and isn’t likely to here, either. Health care resembles a public utility far more than it does a profit-making business.
The danger is that Maine regulators will simply take the path of least resistance and approve the CMHC takeover. But that would only preserve hospital space that isn’t needed and will add still more to our staggering health-care tab.
One reason health care costs more in Maine than in neighboring New Hampshire is that, with nearly identical populations, Maine has so many more acute care hospitals — 21, to just 13 in New Hampshire, supporting 3,027 staffed beds vs. 2,226. That’s 36 percent more. And those figures don’t count many more Maine hospitals no longer providing acute care, in places like Blue Hill, Bar Harbor, Pittsfield, Calais and Machias. The plethora of hospitals isn’t the only factor driving up costs, but it’s a big one.
As it happens, we have another situation playing out where hospitals have resisted cooperation, one exactly analogous to Brunswick’s.
In Waterville, the dominant hospital was Mid-Maine, with another smaller, osteopathic hospital called Inland. Mid-Maine merged with Kennebec Valley in Augusta to form MaineGeneral, the state’s first true hospital merger. Mid Coast, which incorporated hospitals in Bath and Brunswick, is the only other example to date.
MaineGeneral is now building a regional hospital in north Augusta to replace its old hospitals, but it’s maintaining a larger outpatient facility at Thayer Hospital in Waterville, including an ER, than it probably needs. That’s because Inland, now owned by Eastern Maine Medical Center in Bangor, saw the prospective downsizing of Thayer as an opportunity to expand its Waterville market share. Both MaineGeneral and EMMC submitted merger plans, but Inland’s, in particular, was just for show and not a serious effort.
Meanwhile, dominant hospitals in Portland, Lewiston and Bangor have been busily buying up small hospitals nearby that can no longer compete, but the cross-ownership has only further fragmented existing health networks and steadily increased costs.
Even Portland can’t really sustain two hospitals. Mercy Hospital, which carried out an odd expansion plan that built a brand-new building on the waterfront, but kept the old in-town hospital open, is now in such straits that it wants to be acquired by an out-of-state investment firm. This would make it the first for-profit hospital in Maine, another national trend we would be wise to avoid.
Maine badly needs to rationalize hospital services, but it won’t happen through larger hospitals buying smaller ones. DHHS should turn down the CMHC buyout of Parkview, which solves nothing, and get Mid Coast and Parkview back to the negotiating table. Parkview says it doesn’t want to be there, but if there’s no alternative to closure, it might be willing to talk. Any other course will make our unsustainable health care system even more expensive.
Douglas Rooks is a former daily and weekly newspaper editor who has covered the State House for 25 years. He may be reached at drooks@tds.net.
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