Maine AllCare

On September 4, the Portland Press Herald reported that Northern Light Health will reduce its workforce by 3% in order to save $30 million. There is, however, another way for Northern Light, as well as other health care systems, to save money.

According to a study in BMC Health Services Research, the cost to hospitals of handling billing in our complex multi-payer health care system represents 8.5% of revenues. In publicly funded single-payer systems like Medicare and Medicaid that administrative cost is 3.1%.

Were Maine or the nation to implement such a system, then, hospitals could see a 5.4% reduction in their costs (8.5% to 3.1 %). According to Northern Light Health, its revenues were $2.159 billion in 2024, meaning a 5.4% reduction in costs would free up $117 million.

That would easily cover the $30 million to be obtained by cutting the workforce. With the further elimination of bad debt, charity care and the need for a staff health benefit in a single-payer system, these savings would go a long way toward covering the health care system’s entire $156 million loss last year.

From a Letter to the Editor by Dr. Daniel Bryant, Maine AllCare Policy Committee