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May 8, 2013

Gordon Chibroski/Staff Photographer

Maine Medical Center in Portland has instituted a hiring freeze.

As Maine Medical Center makes cuts, other hospitals echo concerns

By Jessica Hall
jhall@pressherald.com
Staff Writer

PORTLAND – As Maine Medical Center announced a hiring freeze and spending cuts Tuesday because of a $13.4 million loss, other hospitals said they also are seeing fewer patients and an increase in the number who need free care.

Maine Medical Center officials said their inpatient and outpatient volumes started to decline in December, and the hospital has seen a jump in the number of patients who can't pay their bills. The result is a $13.4 million operating loss for the first half of the hospital's fiscal year, which ended March 31.

Maine's largest hospital also had a decline in payments from Medicare and Medicaid, according to a letter from President and CEO Richard Petersen. A copy of the letter was provided to the Portland Press Herald.

"Hospitals across the region, state and nation are experiencing similar volume declines," Petersen said in the letter. "We're trying to find the reason behind the volume declines; working to determine whether these declines are episodic or a trend that will continue."

Some of the drop can be attributed to efforts to reduce infections and a decline in the number of readmissions, Petersen said.

But that's just part of the issue. Hospitals across Maine have said they are struggling with a downturn in elective procedures, bad debts in the sluggish economy and automatic federal spending cuts that took effect March 1 and reduced Medicare reimbursements.

"This issue of dropping patient volumes is something we're seeing around the state – north, south, rural, urban, large, small," said Maine Hospital Association President Steven Michaud. "Free care is also going through the roof."

Maine Med has 637 acute-care beds. In December, the hospital said it had a 2011 occupancy rate of 69.4 percent.

Other hospitals echoed Maine Med's concerns.

"We were one of the first to experience declining volumes. We adjusted accordingly a while ago," said Susan Rouillard, spokeswoman for Mercy Hospital in Portland.

Officials at Mercy, which has agreed to be acquired by Brewer-based Eastern Maine Healthcare Systems, declined to elaborate on what the hospital has done to adjust.

Central Maine Medical Center in Lewiston also has reported a decline in patients.

"We are finding the inpatient volumes are off slightly and outpatient volumes are down in many areas," said the hospital's spokesman, Chuck Gill. "People are concerned about the cost of care as they have to pay more out-of-pocket expenses."

Michaud said the slow economy has left more people without jobs or without health insurance from their employers, which forces consumers to pay more and reduces their use of health care services.

"Hospitals also are doing all kinds of work to keep people well and out of the hospital, such as managing chronic diseases such as diabetes and asthma better and keeping people well," Michaud said. "It's the right thing to do, but it's killing the hospitals. They can't cut their costs fast enough to keep up with it."

In addition to the hiring freeze, Maine Med has frozen some travel, cut its catering costs and reduced overtime.

Maine Med has about 6,000 employees. All of the initiatives, which affect its hospital operations and physician practices, will save $15 million and enable the hospital to break even for the year, Petersen said.

Last year, Maine Med had $31 million in income from operations on total operating revenue of $985 million.

Compounding the hospital's recent operating loss is the state's delay in paying the $186 million it owes to 39 hospitals for Medicaid reimbursements. The state's reimbursements will release $298 million in federal payments to hospitals. Maine Med is owed a total of $67.7 million from the state and federal governments.

Gov. Paul LePage has proposed using revenue from the state's next wholesale liquor contract to repay the hospitals.

Petersen said in his letter that "we are using the resources of MaineHealth (the hospital's parent company) to engage in active dialogue with our state and federal delegation to help them understand the impact of government payor cuts on our ability to care for our communities."

Jessica Hall can be contacted at 791-6316 or at: jhall@pressherald.com





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