Hospital in crisis lays off 15 staff

Posted Jan. 20, 2009, at 8:10 p.m.
Last modified Feb. 13, 2011, at 10:53 a.m.

BLUE HILL, Maine — Hoping to stem an ongoing financial crisis, officials at Blue Hill Memorial Hospital announced Tuesday that they have laid off 15 staff members.

The layoffs had been signaled earlier this month in a letter from the hospital’s interim administrator, Dr. Erik Steele, who assumed the post in December.

“Decisions like this are extremely difficult for everyone,” Steele said in a prepared release. “Like so many other organizations across our state and around our nation, we had no choice. These cost savings are essential so that we can continue to provide quality care for peninsula residents.”

Steele also stressed that the staffing reductions will not affect access to providers or the high quality of care people expect from Blue Hill Memorial Hospital.

According to Steele, the staffing cuts have been combined with reassignments and the elimination of open positions for a total equivalent elimination of 34 positions. Although no physicians’ positions were eliminated, Steele said, the staffing reductions were “across the organization.”

“Physicians’ practices, operating room, clinical, facilities — it’s been at all levels,” he said. “In administration, we’ve eliminated the position of chief financial officer. This has touched every place.”

Although no doctors were affected by the layoffs, the hospital did eliminate a physician’s position that it had planned to fill. The hospital had planned to hire a urologist in an effort to increase procedures in the operating room.

“We didn’t think we could make that commitment right now,” Steele said. “One of the easiest ways to reduce costs is by not adding costs.”

The total of 34 positions represents about 10 percent of the hospital’s work force of 347 people. The 15 staffers who lost their jobs amount to a little less than 5 percent of hospital employees.

The cuts did not affect the obstetrics department, which Steele previously had indicated could be on the chopping block.

“We’ll keep delivering babies here,” he said Tuesday. “People love doing it here and people love to come here to deliver babies. I heard that from everybody.”

The hospital is exploring additional cost-saving measures as well as looking for ways to grow services such as orthopedics and gynecological surgery. Overall, the work force reduction and cost savings are expected to improve the immediate need to improve cash flow by $250,000 a month.

Employees whose positions were eliminated are eligible for severance payments based on years of service. Blue Hill Memorial Hospital is a member of EMHS, which is taking special steps to help the affected employees.

“We want to take care of our employees,” said Phil Johnson, EMHS vice president for human resources, “so when the need for layoffs became clear, we asked managers across the system to be prepared to assist Blue Hill staff whose positions have been eliminated, to find suitable positions elsewhere in the system.”

The layoffs are the latest part of the hospital’s effort to deal with what Steele termed “a perfect storm” of a poor economy, a sinking stock market that shrank hospital investments, people postponing health care decisions resulting in a decline in volumes at the hospital, and other anticipated volumes not increasing as quickly as anticipated, as well as lagging MaineCare payments from the state.

That combination had the hospital headed for bankruptcy, Steele said.

“I think we’ve taken a major step in our turnaround and brought the hospital back from the brink,” he said. “The hospital should be able to avoid any more layoffs. But I don’t promise that.”

Hospital trustee and Blue Hill resident Sally Mills echoed Steele’s confidence that the cuts will not affect the quality of care at the hospital.

“I grew up in Blue Hill and the hospital has looked after generations of my family,” she said. “My take is that it’s business as usual and this is where we will come for our primary care and in case of an emergency, God forbid.”

Mills said that although the staff cuts were painful, in the long run they would make the hospital stronger.

Steele’s main concern at this point has to do with the state budget and the proposal that would reduce MaineCare payments, particularly to small, rural hospitals.

“That would result in $1 million less in revenues for this hospital next year,” he said. “That would really frost my ass … and you can quote me on that.”

The state owes the hospital more than $3.5 million in back reimbursements for MaineCare, and a total of about $400 million to all the state’s hospitals. As the economic situation continues, Steele said, he anticipates more and more MaineCare patients coming to the hospital.

“They already owe us and now they want to cut $1 million in revenues,” he said. “I know these are very difficult issues for them, but we’re trying to keep Blue Hill afloat. If they cut those funds, it would be like drop-kicking us when we’re down.”

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