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It's here!

Maine people now have the ability to actually see the Public Information needed to understand how the State of Maine spends tax dollars.

This new Web site is a searchable, downloadable database of Maine's Payroll, Pension and other Spending accounts for 2006 and 2007. 

Search by category to see what your Tax Dollars buy.  Do research on state vendors and the state agencies who buy their goods and services.

 -  Curious about how many Maine State employees make more than the Governor? 

 -  Want to know how much the State of Maine buys from New York companies?

 -  Ever wonder what Maine spends on airline tickets?

It's easy to find out at MaineOpenGov.Org 

According to a new survey by United Benefit Advisors Inc, an employee benefit advisory company, enrollment in Health Savings Accounts (HSAs) has almost doubled in the past year.  Now 11% of those privately insured are enrolled in HSAs compared to 6% last year.  HSA-compatible plans now account for 13% of all health plans offered by employers.

A Health Savings Account ties a savings account with a low premium, high deductible health plan.  That means that the individual, not the insurance company, is controlling the first few thousand spent in health care consumption.  Typically, after a $2,500-$3,000 deductible is met, the insurance company pays 100% of health care costs.

HSAs encourage the individual to take ownership of their own health, focus on preventative care, make good health choices and to be smart price and quality shoppers when using health care.

To learn more, you can read my overview of HSAs.

The National Center for Health Statistics released a report last month finding that fewer than 1 person in 20 in Maine has been uninsured for more than a year (half the U.S. average and half that reported last fall for Maine by the U.S. Census Bureau, page 22 of the report).  However, Maine fares poorly with regards to adults with private health insurance - just 65% of Maine adults have private insurance compared with 70% nationally and 78% in nearby Connecticut (page 14).

Last fall, I authored a report on Maine's uninsured rate using U.S. Census Bureau figures, which tend to report the uninsured at that moment in time rather than the longer-term uninsured.

Given the very low number of longer-term uninsured adults in Maine and our low rate of people with private health insurance, maybe the public policy focus should be on expanding private health insurance choices, competition and enrollment and not on further expansions of public programs like Medicaid. 

The Bangor Daily News reported that the Maine Department of Health and Human Services has delayed $39.6 million in Medicaid claims one week to push the transaction into the 2009 fiscal year, which began on July 1.  Apparently, accrual accounting is necessary for businesses, but playing games with cash transactions to balance the books is just business as usual for Augusta. 

It is because of such games that the Governmental Accounting Standards Board issued GASB Statement 45 to require governments to report future retiree liabilities accurately.  In March 2008, The Maine Heritage Policy Center released a report noting that Maine has promised to pay its state employees and teachers $4,756,000,000 in unfunded retiree pension and health care benefits.  Clearly the strategy in Augusta is just to "push" that $4.8 billion bill onto our children and grandchildren and future elected officials.

The Wall Street Journal recently reported on a meeting of the world's top eight economists (five Nobel laureates) at the Copenhagen Consensus Center in Denmark.  The economists recommended, in priority order, the way to acheive the most good with finite resources, in this case $75 billion worldwide over four years. 

Their recommendations are enlightening and available here:

1. Micronutrient supplements for children (vitamin A and zinc) - Malnutrition - $60 million
2. The Doha development agenda - Trade - $0
3. Micronutrient fortification (iron and salt iodization) - Malnutrition - $286 million
4. Expanded immunization coverage for children - Diseases - $1 billion
5. Biofortification - Malnutrition - $60 million
6. Deworming and other nutrition programs at school - Malnutrition and Eduction - $27 million
7. Lowering the price of schooling - Education - $5.4 billion
8. Increase and improve girls' schooling - Education - $6 billion
9. Community based nutrition promotion - Nutrition - $798 million
10. Provide support for women's reproductive role - Women - $4 billion
11. Heart attack acute management - Disease - $200 million
12. Malaria prevention and treatment - Disease - $500 million
13. Tuberculosis case finding and treatment - Disease - $419 million

Total $18.75 billion a year

To quote the WSJ: "...providing vitamin A and zinc would help some 112 million children in sub-Saharan Africa and South Asia for merely $60 million a year. The minerals would help prevent blindness and stunted growth - increasing lifetime productivity by an estimated $1 billion. "

To put this in context, the world's top economists recommend the best way to improve health is to spend $60 million worldwide on vitamin supplements for 112 million kids.  Interesting, $60 million is about what Governor Baldacci wants to Maine taxpayers to spend on Dirigo Health in fiscal year 2009.

Where are our State's priorities?  What logic drives such foolish decisions?

After the first year of Massachusetts' RomneyCare health reform, the public is seeing the effectiveness of the plan that has an individual and employer mandate combined with a Medicaid expansion and new subsidized private health insurance plans, reports Boston.com. The results are interesting and point to the challenge facing anyone who wants to use government to require universal health care, even in a relatively high-income, low-uninsured state like Massachusetts. Key findings include:

• Overall uninsured rate dropped from 13% to 7%
• 355,000 newly insured
• 92,000 did not sign up for health insurance and face a $219 tax penalty that rises to over $900 in 2008
• 60,000 were exempt from the health insurance mandate for their low incomes
• The plan cost Bay State taxpayers $869 million this year, $150 million or 21% over the original budget

Massachusetts is suffering from Maine Dirigo Health's high cost overruns, but at least some of the uninsured are being covered.

Again, this is a preview of how expensive and difficult the easily-promised universal coverage really is.

The Bangor Daily News recently reported on a State of Maine program that lets patients mail in unused medication safely, rather than flushing the pills and potentially polluting the water supply.  The interesting thing is that only 35 envelopes have been mailed in, despite the availability of 1,800 postage-paid envelopes at 11 Maine pharmacies.  The State just received $150,000 EPA grant to expand to 7,200 envelopes at pharmacies statewide.  Now only if consumers would use them...

This week the Maine Department of Health and Human Services (DHHS) denied capital improvement projects at three Maine hospitals, according the Portland Press Herald. Maine has one of the strictest Certificate of Need laws in the country, requiring bureaucratic approval of many privately-financed hospital expansions and improvements.

In 2004, the Federal Trade Commission stated that "The Agencies believe that, on balance, CON programs are not successful in containing health care costs, and that they pose serious anticompetitive risks that usually outweigh their purported economic benefits. Market incumbents can too easily use CON procedures to forestall competitors from entering an incumbent’s market....Indeed, there is considerable evidence that CON programs can actually increase prices by fostering anticompetitive barriers to entry."

As Eastern Europe and other US states have abandoned the proven failure of central planning, Maine clings to this failed and costly strategy. What is most sad is that CON hurts patients - by driving up costs through reduced competition from new and innovative health care providers and by denying patients new technologies and treatments.

In model health reform legislation released last summer, the Maine Heritage Policy Center recommends that Maine's CON laws be repealed. Health care costs will be reduced from the enthusing competition among current and new health care providers.

Maine DHHS cited increased private health insurance costs as partial justification of denying these projects. Oddly, the Governor and a majority of the Legislature had no problem on April 15 passing a new 1.8 percent claims tax on all private health insurance claims, increasing costs of health premiums by $61 for the average employee with single coverage and $162 for those with family coverage.

Recently Watson Wyatt released a report of characteristics of companies with very low health insurance cost increases - about 1 percent a year. The average company experienced an increase six times as great. Poor performing companies had an increase ten times greater.

The report's major findings:

"Best-performing companies have a two-year median cost increase of 1 percent, compared with 10 percent for their poor-performing peers. The median two-year increase for all employers is 6.2 percent.

Companies with a CDHP report a two-year average cost trend that is significantly below that of companies without a CDHP (5.5 percent vs. 7.0 percent). Enrollment rates in CDHPs are also strongly linked to lower health care cost trends. Companies with at least 50 percent of their population enrolled in a CDHP have a two-year trend about half that of non-CDHP sponsors.

Both CDHP adoption and enrollment rates are increasing. Forty-seven percent of companies now have a CDHP in place – an increase of more than 20 percent compared with 2007. Forty-two percent of these companies have at least 20 percent of their employees enrolled in a CDHP, up from 27 percent of surveyed companies in 2006.

Best performers and those with consumer-oriented health care models are achieving significant cost savings by implementing programs that use financial incentives; focus on provider quality, data, health and productivity; and provide employees with information to make smarter health care decisions."

The Maine Heritage Policy Center has a consumer-directed health plan for our employees, arranged through our benefit consultant National Worksite Benefit Group of Hallowell, Maine. According to their CEO Joel Allumbaugh, companies with these plans have experienced no premium increases or premium decreases over the last two years.

If your company does not have a Consumer-Directed Health Plan, you should consider it.

Governor Crist of Florida (R) recently proposed an extensive health reform plan, as noted in the Miami Herald. A key element of his plan is the repeal of Certificate of Need (CON), the process where state government must approve private investment and the expansion of health care services. CON is premised on the belief that central government planning can control health care costs.

Gov. Crist outlines several reasons for CON repeal:

· "This proposal reflects the goal of the Governor to increase competition and efficiency in the health care marketplace and provide Floridians with greater access to quality services. Removing the burdensome certificate of need process will foster a competitive business climate, spur economic development, and improve access and quality of care for Floridians.

· CON laws across the states have had over 30 years to demonstrate their ability to contain costs, lower prices, and provide greater quality and access to services. Fourteen other states have removed CON requirements since CON laws have failed to achieve reduced costs and greater quality of care.

· The CON process involves delays due to lawsuits by local competitors. Since the August 2005 CON batch cycle, 20 of the 27 CON applications are still in litigation.

· Costs related to the CON process can run as high as $1 million and each additional opponent can increase costs by 50 percent. These costs are passed on and paid for by all consumers.

· CON laws stifle competition and discourage current providers from offering new services.

· The proposed legislation removes current CON process for establishment of new acute care hospitals, and makes them subject to licensure.

· Ties licensure of new acute care hospitals to provision of charity care to Medicaid and underserved populations.

· Requires on-site emergency departments for these new hospitals, as emergency departments see the greatest portion of charity care."

Maine has one of the most restrictive CON laws in the country. It is a failure. Central government planning does not work. Eastern Europe recognized this. The Federal Trade Commission and US Department of Justice have recognized this in recommending CON repeal. Now it is time for Maine to do the same.

Maine should follow Florida and 14 other states and repeal CON and allow the health care industry to innovate and make investments that they deem in the best interest of patients.