July 15, 2013

Hospital repayment a boon for Maine health network

The Franklin Community Health Network says $15.4 million will help pay its mortgage and pay for new technology.

By KAITLIN SCHROEDER Morning Sentinel

FARMINGTON – Lawmakers' decision this session to pay millions in MaineCare debt to the state's 39 hospitals is expected to have a big effect on the Franklin Community Health Network, which is struggling with job cuts and a deficit.

Franklin is being paid $15.4 million the state of Maine owes the hospital for MaineCare, meaning it can pay about one-third of its $25 million mortgage and invest in new technology.

"It's a real feeling of relief," Chief Financial Officer Wayne Bennett said. "Running a hospital these days is like walking on a tight wire."

The health agency, which has been operating at a loss for the first time in more than a decade, announced in February it would eliminate 35 to 40 full-time positions as part of a $6 million reduction in spending to offset a $5.9 million deficit.

In February, when President and CEO Rebecca Ryder announced the layoffs, the news sparked debate in the Legislature about the lack of action on the proposal to pay the MaineCare debt. Gov. Paul LePage made paying the hospitals a key goal of his administration, and he wrangled with Democrat legislators for months about the legislation.

Even though LePage and others pointed to Franklin's financial woes during the debt debate, Bennett said revenue at the hospital system was declining for a variety of reasons and not just because of the MaineCare debt. As a result, the hospital system still will need to cut $6 million in the coming fiscal year to avoid an operating loss.

The hospital ultimately laid off the equivalent of 30 full-time positions and left 17 positions unfilled, Bennett said.

The move was prompted by a 13 percent decline in revenue, driven by fewer patients, more spending on charitable care and reduced government funding.

Kaitlin Schroeder can be contacted at 861-9252 or at:

kschroeder@mainetoday.com

 

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