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 cwoodard@pressherald.com
Staff Writer

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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

A: Whether you're talking about Maine Med or the state of Maine as a whole, the pressures that are bearing on us are due to significant cuts in the Medicare program. In addition to that 1 to 2 percent cut to every hospital (to finance the Affordable Care Act), there was another 2 percent cut phased in by the (federal budget) sequestration cuts.

What was not anticipated by any hospital in Maine, including Maine Med, is that the volume (of demand) would flatten out the way it has in the past couple of years. There's been no growth to absorb some of the reimbursement costs. On the outpatient side, there's actually been a decline in volume in the Portland market and some other spots, which is very unusual. We also were surprised by the increasing level of bad debt and charity care, because we believed that had leveled off with the (improving) economy. 

Q: MaineHealth is closing the St. Andrews emergency room and scaling back the number of beds at Miles Memorial to reduce costs. Can the United States not afford to maintain the health care infrastructure we have?

A: The cost of health care is consuming far more of our gross national product than people are comfortable with. The policy question is: What is the right percentage of dollars to spend? I've heard people say, "Bill, it should be limitless; we should pay less for defense." I don't control those things. Someone is going to decide at a big-picture level what is the right number. And from a big-picture standpoint, there are more and more demands, the population is getting older, and (health care's) percentage of the GNP is going up.

We're going to continue having a discussion in this country about whether the state or federal government should be the single payer. I am not a believer in the single payer -- I like the employer-based finance system, even if it has problems right now. But if the Affordable Care Act doesn't get us the reforms we need -- and we need reforms in health care -- I personally believe it's our last shot as a country. Otherwise we will have the state or federal government running a single-payer health system. There's no other way to balance it.

Colin Woodard can be contacted at 791-6317 or at:

cwoodard@pressherald.com

 

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