As Washington grapples with the impending doom of sequestration, a farcical crisis so absurd that I can’t even bring myself to write about it, the state of Maine is facing its own fiscal problems.
In Washington, the budget is a disaster because Washington believes that reductions in the growth of spending are somehow unreasonable cuts that will implode the entire American economy. Yet the budget deficit is barely touched.
In Maine, one of the multiple budget black holes we have is hospital debt. Maine owes its hospitals a lot of money. The Maine Hospital Association estimates that roughly $450 million dollars is owed to cover care that was provided to recipients of MaineCare.
This debt was accumulated over the last several years as the MaineCare hospital Prospective Interim Payments (PIPs) did not keep pace with the exploding growth of MaineCare enrollment.
Under Governor Baldacci and the Democratic Legislature, MaineCare eligibility expanded so that the government would increase its responsibility to pay for healthcare for more Mainers, creating a much more generous system than most other states.
As with so many other things done by Democrats, the policy goal (getting more people on MaineCare) mattered more than paying for it from a state budget that was already squeezed extremely thin.
The system used to pay hospitals for MaineCare patients did not change to adjust for the new enrollees and a “don’t worry we’ll just accrue debt and pay it off later” attitude became pervasive in Augusta, which resulted in debt to hospitals piling up.
Indeed, the state wasn’t just failing to keep up with the payments it had committed itself to with policy changes they themselves pursued, they were no longer even settling their bills at the end of the year either.
To compensate, hospitals were forced to make terrible choices. As the debt began piling up roughly 10 years ago, hospitals have been responding by freezing wages, cutting jobs (which makes care for an increasing number of patients virtually impossible) and have had to eliminate some key services to patients.
Contrary to what most people believe, the healthcare industry is not a cash cow. Because of state debt, many hospitals have actually been operating at a loss, which is something that simply cannot be sustained.
Recently, Franklin Memorial Hospital in Farmington announced that it was being forced to cut 35 to 40 jobs, bringing this problem to light once again. The state owes $15.4 million to Franklin Memorial.
If you think fewer healthcare employees and fewer services for more people is a nightmare, consider hospitals potentially having to close entirely.
Gov. Paul LePage campaigned in 2010 rather aggressively on this issue, rightly pointing out that hospitals being forced to provide increased services to more people and not being compensated for those services was threatening the financial health of Maine hospitals, jeopardizing the entire healthcare system.
Once in office, he and the new Republican Legislature changed the system of payments to Maine hospitals whereby they are now reimbursed shortly after services are provided to MaineCare patients. This will help curtail new debt, but the debt that has already been accrued still lurks.
This debt must be paid, and on Jan. 15, the governor proposed a plan to address the debt, and Democrats have been dragging their feet to deal with it and indeed have been denying that this debt is hurting hospitals and causing layoffs and service cuts.
This is of little surprise, of course, given that they were the ones who caused the problem in the first place and have been denying that it even was a problem ever since. When you have a political philosophy that believes that spending is never a problem, that debt and budget gimmicks can be used forever to hide the unsustainable budgets created by that spending, and that higher taxes on hardworking citizens is the easy way out, that is just how you think, I suppose.
The rest of us know that spending is a problem; reductions in the growth of state spending are not cuts; overcommitments with no plans to pay are a problem; taking out new debt to deal with overspending is a mistake; and taxing an already overtaxed population is only going to make the problem worse.
In 2010, Maine voters chose leaders who were brave enough to tell the truth about this and try to confront the problem — something they did. In 2012, they returned to power the very people that created the problem.