🔒Health care now a ‘top issue’ for the business community, Maine survey shows

Access to health care has become a top issue among businesses surveyed by the Maine State Chamber of Commerce and Maine Development Foundation.

The survey, conducted since 2010, is used to develop a joint economic plan for Maine.

“This is the first year that health care became a top issue for the business community,” Patrick Woodcock, the chamber’s president and CEO, said during a health care forum held May 8 in Brewer.

Precarious time

Hospitals in Maine and the Northeast are in a precarious position, said Dr. Guy Hudson, president and CEO of Northern Light Health and the forum’s keynote speaker.

The pandemic accelerated pressures that were already present in the industry, including surging costs, workforce instability and patient frustration, he said.

In response, health care systems need to be more adaptable in how they operate, Hudson said.

Hudson took the helm at Maine’s second-largest health care system, headquartered in Brewer, last fall, following more than two decades of clinical and executive leadership experience on the West Coast.

Arriving during a period of financial headwinds at Northern Light, including the closure of Inland hospital in Waterville and the prospect of financial strain from reduced federal Medicaid funding, Hudson at the time cited adaptability as key to a turnaround, which recently resulted in financial upgrades from “negative” to “stable” with credit rating agencies Standard & Poor and Moody’s [see sidebar].

Slim margins

Maine is a unique ecosystem of health care, especially given the state’s rural nature and aging population, Hudson said.

Nationwide, the age demographics are skewing older; it’s shifting faster in Maine and reliance on government reimbursement is going up at a time when new federal restrictions are rolling back the health care safety net, with the increase in the number of uninsured people projected to be in the millions, along with reduced Medicaid funding to states, he said.

Hudson said that, nationally, Medicaid cuts compound pressures on rural hospitals, which have a median 1% operating margin, compared with a 7.5% median margin across all hospitals. Factors contributing to low margins include fewer economies of scale and smaller workforce recruitment pools.

“Rural health care does not have that ability to pivot that other big health systems do,” Hudson said.

Nationally, it’s anticipated that 14% of rural hospitals are at risk of immediate closure, said Hudson.

Rural hospital closures impact the larger health care ecosystem, resulting in a lack of access to local providers, strained capacity at nearby facilities and increased cost of care for providers and payers, he said.

That domino effect results in delays in seeking care, increased emergency room admissions and increased wait times, he said.

“Patients are frustrated. I hear this a lot,” Hudson said.

Restructuring

Hudson said $190 million in federal aid received this year to support Maine’s rural hospitals — part of a $50 billion national Rural Health Transformation Program to help offset losses tied to Medicaid cuts — could be used to restructure the ecosystem of care.

“One thing Maine can do is, we’re small enough yet big enough to set the example of how health care should be delivered in rural areas,” Hudson said. “This should be a catalyst to do that.”

Maine and the nation, he said, face a future in which health care access will be a patchwork that hinges on business utility and private support, such as for-profit care delivery companies that take commercial insurance, leaving nonprofits to rely on government reimbursement.

“If we divide Maine that way, the problems will get worse,” said Hudson. “The safety net will no longer provide basic access.”

Instead, he advised collaboration. No organization exists in a vacuum, he said. With just over 30 hospitals in Maine, “If we’re not talking with each other every day, with our insurance partners, with federally qualified health centers and everybody who delivers care across the state to make health care better for all of Maine, then we’re not doing our job.”

Maine needs to focus on patient-centric care, not hospital-centric care, he said.

“We can set the example for rural health care across the United States,” he said.