2006 Finalist
State of Maine
Innovations in American Government Awards
Innovations in American Government Awards

As the new millennium began, many citizens in Maine faced a daunting array of barriers to quality health care. Many went uninsured, or grappled with high health care co-payments that deterred them from seeking preventive care, leading to more catastrophic health conditions later. Others lived in rural areas across the large state, far from any medical facilities. Worse, available health care was of varying, often poor, quality. Health care costs were also very high; only four insurance companies served the area, providing minimal competition and little leverage to press for rate discounts from local hospitals.

Governor John Baldacci decided to focus on tackling these vital public health issues, both in his campaign and once in office. In 2002, he gathered a group of health care experts to craft the Dirigo Health Reform (DHR) plan. The DHR plan addresses issues of access, quality, and cost: an ambitious agenda never before attempted by a U.S. state. The DHR, which takes its name from Maine's Latin motto, Dirigo ("I direct"), helped to expand access to health care through a combination of Medicaid expansion and the creation of a new, state-subsidized insurance program.

The health care expansion, passed in 2003, allowed childless adults and the parents of children eligible for Medicaid to take advantage of the program for the first time. Other adults could opt in to DirigoChoice, a state-subsidized program that replicates the range of benefits supplied by Medicaid. DirigoChoice is available to employers, sole proprietors, or individuals, and its cost varies according to income. Citizens eligible for Medicaid who choose DirigoChoice pay nothing, and the wealthiest Mainers receive no state subsidy for the cost of the insurance.

The program has other benefits; as a means of improving the quality of care for Maine citizens, the DHR created the Maine Quality Forum, which provides for greater transparency in medical treatment. On its website, citizens can view data about treatment available at each hospital and physician. New laws require that doctors post the rates for common procedures on the walls of their offices. Even inefficiencies in the insurance system are considered-providers must submit all insurance claims electronically, under observation.

Reducing insurance costs and waste is another major focus of the DHR. Insurance companies in Maine are now required by law to pay at least 78% of their revenues to client claims (and not on profits or overhead). A cap on state money available for capital investment in treatment facilities allows regulators to ensure that facilities are not driving up costs through "arms races" that outfit hospitals with advanced equipment needed by very few patients.

By 2006, nearly 15,000 people had taken advantage of either the expanded Medicaid benefits or DirigoChoice provided by the DHR. The programs have been of particular use to small businesses who were previously unable to insure their employees, closing a major gap in health care coverage. The Quality Forum has been met with broad approval from stakeholders, providing a strong starting point to eliminating variations in care. Finally, the more controversial cost containment programs, attacked by some as deterring insurance providers from operating in the state, have provided an estimated $44 million in savings to the state.