Wednesday, April 23, 2014
It’s not every day that a building gets treated like a rock star. But the Alfond Center for Health is no ordinary building.
The $312 million replacement for MaineGeneral’s two outmoded facilities in Augusta and Waterville is a state-of-the art facility with the latest image-guided surgery technology, 192 private rooms, and common areas and halls that are flooded with natural light.
On Sunday, traffic stretched out onto Old Belgrade Road as drivers lined up for spaces in packed parking lots hoping to get a look around the new hospital, which opens for business next month.
Their interest is understandable. Aside from Bath-built destroyers (which slip into the Kennebec, rarely to be seen in these parts again), there aren’t any $300 million construction projects in Maine.
That should tell you pretty much all you need to know about where the health care industry stands in our economy. And that’s most of what you need to know about what’s wrong with our health care system.
One day after the health care exchanges started making insurance available to millions of Americans, there is still little in place to control the escalating cost of health care, which is about twice what our peers pay in other industrialized countries. Health care cost increases are the major driver in the federal deficit and crowd out other spending priorities on the state and local level. They burden American businesses that have to compete globally and they take money out of workers’ pockets, as annual premium increases make pay raises disappear.
Hospitals are in a highly competitive market where they face intense pressure to be the best, but they don’t face the same pressure to be affordable. No matter how high the costs go, everyone knows it will be passed on to consumers.
“It’s an endless upward spiral,” said Joe Ditre, executive director of Maine Consumers for Affordable Health Care. “The market works to raise prices, not control them.”
The new MaineGeneral building shows how it works. The hospital was endowed with a $35 million gift from the Alfond Family Foundation, which, along with about $12 million from other philanthropists, made an eight-digit down payment on the nine-digit project. The rest is being raised by selling bonds.
The bonds will be paid off from the money the hospital earns by providing services. A small part of that comes from bills sent to individuals, but the vast majority comes from insurance plans, both private and public – including Medicaid and Medicare.
So, the philanthropists get their names out front, but the public ends up paying most of the cost, whether they personally use the facility or not. They pay through their insurance premiums and they pay through their taxes whenever a senior citizen or someone on MaineCare (our state’s name for Medicaid) needs treatment.
But while everyone pays, not everybody has a say. Decisions to expand or build a new hospital are made by the hospital boards, with some oversight by state regulators.
A hospital comes to Augusta with some built-in advantages. There aren’t any other industries building $300 million facilities in Maine, especially during an economic downturn. MaineGeneral will employ 2,200 people, making it the eighth-biggest employer in the state – bigger than UnumProvident,Verso Paper or Pratt & Whitney. Collectively, Maine’s hospitals employ 32,500 people, giving them plenty of clout in any process that involves elected officials. Every legislator loves his local hospital, and the governor loves them all.
So while public infrastructure investments have to go to voters, private nonprofit hospital projects do not, even though the public ends up paying most of the cost.
With this new facility, MaineGeneral will be able to compete with other hospitals for the best surgeons and specialists, some of whom are becoming scarce. It will be able to compete for patients who have a choice of where to go because of its superior amenities for patients and visitors. It will be able to keep and treat patients who, in the past, would have been shipped to Portland. But they don’t have to compete on price.
Neither does Maine Medical Center, which is about to break ground on a $40 million expansion of its surgery department, the first of a multi-stage renovation. That sounds like a bargain compared with the $250 million, seven-story tower proposed for Eastern Maine Medical Center in Bangor.
Making health insurance available to people who don’t have it is a great humanitarian achievement that will save lives. But until we recognize that we all share the costs and we are paying too much, the Affordable Care Act won’t live up to its name.Greg Kesich can be contacted at 791-6481 or at:firstname.lastname@example.org