Calais hospital cuts hours for 90 employees

Posted April 17, 2014, at 1:22 p.m.
Michael Lally, CEO of Calais Regional Hospital
Courtesy of Calais Regional Hospital
Michael Lally, CEO of Calais Regional Hospital

CALAIS, Maine — Calais Regional Hospital has reduced hours for 90 employees and laid off a handful of workers as part of an effort to rein in a deficit of more than $500,000 in the first two months of the fiscal year.

The reduction in hours is the equivalent of 20 full-time positions or 8 percent of the hospital’s workforce of 265 people, Nancy Glidden, chief financial officer, said Thursday. Four employees were laid off, she said.

The reduction in hours varied by department and position, Glidden said, and some employees lost only an hour per week.

A March 31 memorandum from hospital CEO Michael Lally to employees noted the hospital has a deficit of more than $500,000 just two months into the fiscal year.

“Lower than expected volume in many departments is the most significant contributing factor,” he wrote.

In addition to reducing hours for some employees, the hospital also announced the elimination of a special care unit for patients with serious medical conditions.

“We must bring our staffing into alignment with how our community is utilizing our services,” said Lally. The hospital is staffed at higher levels than others of similar size and volume, he said.

Lally is on vacation this week and was not available for comment, but he referred questions to Glidden.

The personnel actions will save the hospital about $1 million annually, said Glidden.

When asked how else the hospital would make up a deficit that has averaged $250,000 a month or $3 million annually, Glidden said hospital officials do not expect patient volume to continue to decline. In fact, March showed improvement, she said.

The hospital has recruited three physicians — replacing two pediatricians who recently left the area and a physician’s assistant with a doctor — in order to build up patient volume, she said. The new hires will be coming on board in May and later this year.

In a March 6 memorandum from chief nursing officer Cheryl Zwingman-Bagley to medical providers and management staff, Zwingman-Bagley said the inpatient care unit would no longer be able to accept patients at the special care level of care — those with more serious medical conditions.

“This decision was made based on a dwindling number of patient days and the cost of maintaining a program that is so marginally used,” she said. In addition, effective immediately, the IPCU would no longer admit pediatric patients younger than 12, she added.

The elimination of the special care unit means the hospital will not be required to have a nurse who is trained for intensive care to be available around the clock, and it also did away with the need for some training, explained Glidden.

The hospital has “well-defined protocols” for caring for patients and determining those who need to be transferred to another medical care facility, said Glidden. “There’s not a mass exodus that’s going on here,” she said.

“We’re been a very busy in-patient hospital. … We’re not diverting patients because we can’t take care of them in any big numbers,” said Glidden.

“They knew full well what was going to happen,” said John Bloemendaal of Robbinston, who served on the hospital’s board of directors until recently. He discussed its financial problems in interviews Wednesday and Thursday.

“When you’re losing $21,000 a day,” said Bloemendaal, as the hospital did in February, “that’s pretty grim.”

Patient days are declining because changing reimbursement policies for Medicare, Medicaid and private insurance are shifting more of the cost to consumers, suggested Bloemendaal, who served 12 years on the State Employee Health Commission until his retirement about two years ago. Fewer people are going to the hospital because they do not have the money to pay the difference, he said.

“That’s the biggest source of drying up your clientele,” said Bloemendaal.

Glidden acknowledged that, similar to other hospitals, Calais Regional Hospital is dealing with changing third-party reimbursements. The changes put more financial burden on patients and, in the case of some rural hospitals, declining populations. In addition, there are a number of federally subsidized rural health centers that serve Washington County, she noted.

The hospital also is making changes in procedures in order to improve efforts to collect payments, said Glidden.

Bloemendaal suggested the recruitment of pediatricians was misdirected.

“Why do we need pediatricians?” he asked, observing that the hospital only had a couple of pediatric admissions last year.

He made the same observation about the need for an obstetrician for a hospital that delivers only about a dozen babies annually.

Washington County needs more mental health services, contended Bloemendaal.

“We’ve got a lot of mental health problems that need big time help,” he said, “and we’re not recruiting the right people for it.”

He ticked off the needs — drug addiction, individual psychological problems and family problems.

“We need help in that direction,” said Bloemendaal.

The hospital expects to rein in the deficit and break even for the fiscal year, said Glidden.

“We’re optimistic that the steps we’re taking are going to get us there,” she said.

Hospital employees recently were paid a day late, but Glidden said the reason was not related to the hospital’s financial difficulties but a computer problem. A server failed for a third-party vendor used by the hospital’s bank for payroll purposes, according to Glidden.

“It took about a day to get it fixed,” she said. The one-day delay occurred about six weeks ago.

The hospital cut 13 positions, left 10 vacation positions unfilled, froze pay raises and matching pension contributions in 2012 because it was operating at a $1 million annual loss. At the time, it cited similar contributing factors — fewer patients and reduced levels of reimbursement for services.

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