Deep in the back of the “Baseline Analysis of Maine’s Public Welfare System,” back behind the questionable statistics and the polarizing policy proposals, things start to get interesting.
On Page 149 of the 228-page report by Rhode Island consultant Gary Alexander, there is a discussion of cost drivers in the MaineCare program, which is the biggest line item in the Health and Human Services budget.
Just about one-quarter of MaineCare spending went to the state’s hospitals, a budget line item that increased by an average of 3.5 percent per year in a five-year period ending last year, growing from $517 million to $618 million.
The second-biggest category of expenses is the long-term care budget, which accounts for about one-fifth of MaineCare spending. That budget has declined, in large part because the low reimbursement rate for nursing homes means that they lose $21 a day on every MaineCare bed, which is an unsustainable situation.
The third-biggest cost center is services for people with developmental disabilities, which are some of the most expensive in the country on a per capita basis.
These three areas combined comprise more than half of the most expensive program in the DHHS budget, and they paint a much fuller picture of the services on which the so-called “welfare” budget is really spent.
The money is mostly going for health care for very sick people, nursing home residents and profoundly disabled individuals, and it is paid out in checks to more than 7,000 providers, for the most part through an inefficient fee-for-service system.
Meaningful discussions about lowering human service costs could start here, but instead we have been engaged in a ridiculous two-year fight about cigarettes and strip joints — negligible costs on the margins of the budget that carry emotional appeal but offer no real relief.
No one supports welfare fraud. No one supports the status quo of the MaineCare system. There would be broad, bipartisan interest in having a real conversation about how to lower health care costs, improve the quality of care and boost the state’s economy.
The issues that Alexander raised at the tail end of his report could have led to much more fruitful discussions in Augusta this session. As he points out, Maine does not use managed care to control its MaineCare costs, although Gov. Paul LePage vetoed a bill that would have done that while expanding MaineCare eligibility. Had that bill gone forward, Maine now would be addressing the real cost drivers in its human services budget.
And the Alexander data shoot down the notion that adding “able-bodied” people to MaineCare is what’s making the system unaffordable. He showed that while people who aren’t either elderly or disabled make up 75 percent of MaineCare enrollees, they incur only 39 percent of the costs. The only way to really change the course structure is to find a better way to keep more people healthy.
That is not the conclusion that Alexander draws, however. He supports the LePage agenda of lowering the program cost by cutting health coverage for the people who cost the least to care for, while asking for federal permission to spend federal money without meeting program standards. The so-called “global waiver” is Alexander’s calling card, but nothing that the federal government is likely to grant.
The no-bid, $1 million contract for the Alexander report is a classic example of government waste, but it’s not the only waste here. LePage squandered the opportunity to have a real conversation about how to responsibly care for people in need, instead of creating political scapegoats. As the Alexander report lands on a shelf to gather dust, the state will have to wait another year for reform.