This story appears as part of a collaboration to strengthen investigative journalism in Maine between the BDN and The Maine Monitor. Read more about the partnership.
Steven Michaud stepped down on March 1 as president of the Maine Hospital Association after serving 26 years as the state’s top lobbyist for hospitals and after being with the organization for a total of nearly 40 years.
Two days after handing over the job to Jeffrey Austin, who was serving as vice president of government affairs and communications, Michaud, who lives in Durham, talked with The Maine Monitor about how the health care industry has changed in Maine.
Health care affordability was a major problem when Michaud became president of the hospital association in 1999 when Angus King, an independent, was governor. Financial challenges have only gotten worse since then, he said.
“When we look at that now, that was the good old days,” Michaud said. “There’s a reason so many are consolidated into systems and struggling for their lives, out there in rural Maine in particular.”
In the early 1990s, hospitals mostly were independent. But by the end of the decade, regulatory changes and financial pressures led hospitals to begin joining together into health care systems, changing how they delivered care across the state.
Since then, costs have continued to grow. Why has no one solved the problem?
“It’s not a solvable problem. The affordability crisis is not solvable. And by the way, I challenge anybody to look across the globe. Nobody has solved it,” Michaud said.
Maine hospitals are now at the center of a health care affordability debate in the Maine Legislature, as lawmakers consider a bill that would cap what a hospital can charge at no more than 200% of the Medicare rate for the same service in the same geographic area, among other changes.
Bill sponsor Rep. Drew Gattine, D-Westbrook, said the bill is necessary because the only way to bring down health care costs is to restrict the growth in hospital prices.
“What we all need to understand is that the crisis is already here,” he said in his testimony. “Sky-rocketing costs, far outpacing inflation year after year after year, resulting in the loss of insurance coverage will have a far more negative effect on the provider community than taking action now to rein in costs.”
National health care expenditures amounted to $1.8 trillion in 1995, in today’s dollars, according to KFF, a health news organization. The spending increased to $4.9 trillion in 2023.
Maine’s per capita health expenditures have increased by at least 120% between 2001 and 2020 across the top four spending service categories, with hospital expenses growing the most at more than 160%, according to the 2024 annual report from the Maine Office of Affordable Health Care.
Cumulative per capita hospital expenditures in Maine outpaced median household income and annual inflation in that time, according to a 2025 annual report from the same office.
Michaud and Maine hospitals are adamantly opposed to the bill. Capping hospital prices does nothing to address the true cost of health care, Michaud told The Monitor.
“All you did was shift [the cost] and then, while you’re at it, devastate the whole system,” he said.
The Maine Hospital Association estimated the bill would result in $1.2 billion in cuts to Maine hospitals in 2028 even as they grapple with the rising costs associated with labor, utilities, drugs, regulation, taxes and health care for their own employees, the association said in its testimony.
“It is neither accurate nor fair nor even responsible to force one party in the health care system to bear the responsibility for all of its affordability ills,” the Maine Hospital Association said.
Hospital spending, in fact, is increasing nationally at a greater rate than what hospitals are charging, according to a report from the American Hospital Association, published this month.
“Hospitals are delivering more care to patients who are increasingly medically complex, while the key inputs of care — labor, drugs and supplies — are getting more expensive,” it stated.
Technology and medicine keep advancing, allowing people to live longer, Michaud said, but then they require more care, which is expensive to provide. Meanwhile, the workforce is highly educated and skilled, which requires higher compensation. In addition, buildings and equipment are expensive to build and maintain.
He described health care as a machine that keeps chugging along, gobbling up resources.
“You can rein in some costs, keep people healthier, manage disease a little bit better, but don’t ever forget that big hulking machine is churning,” he said.
Michaud said some policy changes can make a difference around the edges. For example, under the administration of Republican Gov. Paul LePage, hospitals fought for both repayment of $750 million in unpaid MaineCare reimbursement, as well as expansion of Medicaid to provide health insurance to people with lower incomes. LePage supported the repayment, but he repeatedly vetoed Medicaid expansion even after voters approved it.
Without the repayments from MaineCare, the state’s version of Medicaid, more hospitals would have closed, Michaud said. Then Democratic Gov. Janet Mills approved expanding Medicaid as her first act in office, which decreased costs for hospitals to care for uninsured patients.
The event that looms largest in recent years is the COVID-19 pandemic. Hospitals stopped taking patients, and before Maine had its first case Michaud said many in health care wondered if they were overreacting.
Then he heard from a colleague in Washington state, which was grappling with the first cases in 2020, who described their hospitals being completely overwhelmed. After the call, Michaud remembered telling other Maine hospital officials, “What you just heard was completely bone chilling. This is real.”
Michaud said he tries to forgive mistakes made during the pandemic such as initial guidance around prioritizing masks for health care providers because he reminds himself that there was so much the health care industry didn’t know. It was a new virus, and recommendations frequently changed. Health care workers did the best they could, he said. However the industry could have been more transparent about what wasn’t yet known and why recommendations sometimes changed, he said.
At the same time, he gets frustrated with people who dismiss how bad things were, especially at the height of the Delta and Omicron surges, when patients flooded hospitals.
“The winter of ’21, we were this far from our hospitals being completely overrun, but we managed it by the skin of our teeth, so don’t tell me it wasn’t real. Don’t tell me that healthy people didn’t die. It came close to collapsing, and people just didn’t realize it,” he said.
While it may not be possible to fix all problems that hospitals face, Michaud said he believes improvements are possible. In 2003 he wrote a memo describing how Maine should invest more heavily in two areas: disease prevention and disease management.
His answer remains the same today: Keep people from getting sick in the first place, so they don’t need a hospital; and keep people healthy when they do need a hospital. For example, Michaud said the health care industry can do a better job making sure people diagnosed with diabetes eat the right things, so they don’t end up back in the emergency room.
“That’s the missed opportunity I think we’ve had for decades, and we just haven’t done it very well,” he said.
Michaud will stay on with the Maine Hospital Association until July 1 to help with the leadership transition.
