Hospitals have several concerns with Question 1 on the statewide ballot in November. Those concerns range from the steep tax increase it would impose, to the inefficient expansion of government, to the violation of patient privacy.
One of our primary concerns is how Question 1 will undermine our efforts to recruit the next generation of doctors and nurses.
Question 1 would increase Maine’s marginal income tax rate from 7.15 percent to nearly 11 percent. This would give Maine the highest income tax rate in the country. If Maine were to have the highest tax rate in the country, the already difficult job of recruiting physicians into our state will be that much harder.
It is very difficult for doctors to practice on their own any more. We’re a relatively poor state, most patients are on either Medicare or Medicaid, which don’t have high reimbursement rates, and the regulatory burdens on health care providers today are enormous.
For this reason, many doctors prefer to be employed by hospitals or other entities. That way, the hospital administration can take care of the business side of health care — insurance, regulation, IT systems, office management, etc. — and doctors can focus on practicing medicine.
In Maine, between half to three-fourths of all physicians work for hospitals. As such, it is hospitals that have to bring in the next generation of doctors to care for Maine people. If the hospital doesn’t recruit the doctor to the community, that doctor often just does not exist and the community is left without access to health care.
Physician recruitment is challenging and fiercely competitive. It often involves recruiting a young doctor — and his or her family — to Maine from a residency training program in Chicago, Boston, or Washington, D.C. Young doctors who Maine hospitals recruit express concerns about the weather, limited professional opportunities for spouses, remoteness, and yes, Maine’s high taxes.
WalletHub, an online resource, recently ranked Maine as the second-best state for its medical environment. Essentially, it said that Maine is an extraordinary place to practice medicine. And we agree.
At the same time, it ranked Maine 32nd for “opportunity,” which looked at a number of factors, including compensation. Since the average medical school graduate has a debt load approaching $200,000, we know that young physicians are concerned about finances and Maine is already far down the list at 32nd.
Wallethub also recently ranked Maine as having the third highest total tax burden in the country. Imagine Maine’s ranking if the tax increase in Question 1 were to pass. The picture of Maine as a great place to practice medicine gets a whole lot worse.
Any young professional who wants to practice in New England could look at our neighboring states like Massachusetts, where the highest income tax rate is 5.1 percent, or New Hampshire, which has no income tax. It is possible to have snow and lower income taxes. Maine’s top tax rate of 7.15 percent is already high relative to our neighbors. With Question 1 pushing that rate to 10.95 percent, how can Maine compete?
Furthermore, we’re not just talking about doctors. That tax rate will apply to household income, meaning if both spouses work and their combined income exceeds the $128,400 annual income threshold proposed in Question 1, that family will pay this new 3.8 percent tax.
Many nurses, administrators, IT professionals, physician assistants and more kinds of professionals we currently employ and need to attract — will be subject to this tax.
We know that once doctors and other young medical professionals get to Maine and experience “the way life should be,” they will stay. They will love Maine as much as we do. They will appreciate our natural beauty, people and way of life.
But we have to get them here first.
Question 1 sends the wrong signal at the wrong time. It will make it more difficult for Maine to recruit the doctors and other health care professionals our people and communities need.
Please vote no on Question 1.
Steven Michaud is president of the Maine Hospital Association.
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