It is no secret that Maine is in the midst of a budget crisis. Property tax relief, bond proposals, and funding formulas have been much in the news, but how Maine's "structural gap" affects hospitals is less well known. The State owes Maine's hospitals over $200 million in MaineCare payments due from prior years from as far back as 1999. To put this in perspective: Babies born to MaineCare patients in 1999 are now in Kindergarten but the hospital bill for their delivery is yet to be paid.

For this hospital, our share of the overdue payment is $735,000 – in effect an interest-free loan from Blue Hill Memorial Hospital to the State of Maine. Meanwhile, the MaineCare program has been expanding, from 175,000 participants in 2001 to over 250,000 today. Future projections of MaineCare growth are for the enrollment to increase even more, to eventually include one out of every four Maine citizens. We ask: how can the State afford to expand a program for which they can't meet their five-year-old obligations?

It may surprise you (or it may not) that the State's solution last year was to impose a tax on hospitals in order to pay hospitals. You may need to read that last sentence twice.

The tax, passed in the last legislative session, is called "Tax and Match." In theory, by artificially increasing the cost of hospital care through a hospital tax, the State can draw additional Federal matching funds, which are then distributed back to hospitals to offset the cost of the tax. The match was intended to equal the tax. The theory breaks down when the "match" is not based on the amount of tax paid but on a convoluted formula that puts certain hospitals at a disadvantage. In the case of Blue Hill Memorial Hospital, we paid $365,000 in tax this year but were only reimbursed 28% of that amount. That means our community paid $262,000 in taxes to Augusta, to be redistributed elsewhere.

To confront the economic challenge, we are doing our best to operate the hospital efficiently. We have a responsibility to reduce the cost of healthcare. But our best efforts are not enough. The Governor has made a proposal to increase the tax rate in the State's next fiscal year.

Call me a slow learner but in the last year I've come to realize a simple truth: Blue Hill Memorial Hospital cannot decrease our expenses or increase our revenues faster than the government can raise our taxes.

The "Tax and Match" program, if continued, will require us to consider cutting vital services. I believe that is an unacceptable and unnecessary solution.

So here is where we need your help. Please call or email your elected representatives and tell them "Tax and Match" is a crushing burden on your hospital. They may choose to repeal the tax or they may reconfigure the distribution formula so that the match equals the tax.  All of our legislators have voiced support for rural hospitals in general and Blue Hill Memorial Hospital in particular. They need to know you are counting on them to protect this hospital. 

Senator Dennis Damon: 667-9629; dsdamon@panax.com

Representative Hannah Pingree:  867-0966; hannah@pingree.com

Representative James Schatz: 374-5204; bluehillfarm@gwi.net

Representative Kimberly Rosen: 469-3779; Kurlykim40@aol.com

Representative Kenneth Lindell 223-9966 rklindell@starband.net

Senator Richard Rosen: 469-3779; rrosen113@aol.com