August 28, 2013

A Word with the Boss: Numbers man is trying to make health costs add up

MaineHealth CEO Bill Caron hopes to keep the baby boomer 'tsunami' from breaking the bank.

By Colin Woodard
Staff Writer

PORTLAND - Bill Caron is the president and CEO of MaineHealth, Maine's largest health care delivery network. It has nine member hospitals -- plus NorDx labs and other entities -- with combined annual revenues of nearly $2 billion.

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CEO Bill Caron oversees a MaineHealth network that employs about 16,000 people and has nearly $2 billion in annual revenue. In fiscal 2011 he earned a base salary of $1,058,110, according to IRS filings.

John Patriquin/Staff Photographer

The network, founded by Maine Medical Center in 1994, is now one of the state's largest employers, with about 16,000 workers. Its hospitals are often the largest employers in their respective communities.

Over the past year, MaineHealth has announced a number of cost-saving measures, including 50 layoffs, a hiring freeze, the elimination of 175 vacant positions, and 120 voluntary buyouts at Maine Medical Center; the closure of the emergency department at St. Andrews Hospital in Boothbay Harbor; and a scaling back of the number of beds at Damariscotta's Miles Memorial Hospital.

The network has reportedly seen its cash position erode because of millions in reimbursements it is owed by MaineCare, the state's Medicaid program, and because of a $160 million investment in an electronic medical records system that was failing to charge patients properly.

Caron has headed MaineHealth since October 2000, and was its vice president and treasurer for three years before that. He also was vice president of finance and treasurer of Maine Med from 1992 to 1997. Before that, he spent 17 years with the global accounting firm Ernst & Young.

Caron's base salary in fiscal 2011 was $1,058,110, with bonuses of $69,896, according to MaineHealth's IRS filings.

Maine's hospitals are in the midst of a period of consolidation, with many joining networks like MaineHealth or Brewer-based Eastern Maine Healthcare Systems. They are also confronting an aging population in Maine and a shifting policy landscape under the federal Affordable Care Act, which aims, among other things, to increase access to primary care physicians. 

Q: What is MaineHealth and what's its reason for existing?

A: It's a story that starts in the mid-1990s when a number of hospitals in the southern part of the state were talking to each other and asking if they could work together to integrate care and increase quality and patient safety. There was also the thought that you could get more efficient the more scale you had, through purchasing goods and services more effectively. So they created what is now called MaineHealth, which is an integrated delivery system with a decentralized governance model. All our members retain their own boards and reserve to themselves, to the local community, a certain level of decision-making. A lot of systems out there are more top-down than ours.

So what you have seen over the past 16 years is the building of a very significant health system relative to the size of Maine. Our service area is the 11 southernmost counties in the state, and inside those counties we are the dominant provider of care. Our vision and mission are to work together so that our communities are the healthiest in America. 

Q: What are the challenges facing health care providers in Maine, and networks like yours?

A: The focus is on what I would call delivery system redesign. How are we going to pay for the care of this baby boomer generation that is coming on? As everyone knows, the older people are, the more resources they consume. But we have this tsunami coming. As our population ages, our Medicaid population is going to explode on us, particularly in this state, and it breaks the bank.

So if we don't figure out how to provide that care more efficiently and with better quality, and take those dollars we save to pay for the added demand of the baby boomer generation, then we're in trouble. The system is going to collapse. 

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