Maine health affordability office: per-unit prices — especially outpatient hospital prices — are driving cost growth

Meg Garrett Reid, executive director of the Office of Affordable Health Care, told the Health Coverage Insurance and Financial Services Committee during a scheduled meeting that rising per-unit payments — particularly for outpatient hospital services — are a major driver of increased health care spending in Maine, and that the office will prioritize provider-market oversight, aligning payment incentives, and exploration of commercial price regulation in 2025.

Reid, who described the Office as “a small, independent executive agency,” said the office was created by the legislature in 2021 and formally established in 2023 when she was confirmed as its first director. The agency now has a three-person staff and supports a 13-member advisory council chaired by Trevor Putnocki and vice-chaired by Kate Endy. Reid said the office has published new hospital payments and utilization dashboards in partnership with the Maine Health Data Organization (MHDO) and vendor HSRI and will use those data to inform future policy work.

Why it matters

The office’s analysis, drawing on CMS national health-expenditure data and state claims work, shows hospital services account for about 40% of Maine’s total health expenditures, physician and clinical services about 20%, prescription drugs about 12%, and dental services about 4%. Reid told the committee that while prescription drugs have been a policy focus, hospital and physician services represent a larger share of total spending. She said the increase in commercial-market spending appears driven more by rising payments per service than by higher utilization.