May 16, 2020
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Calais hospital eliminating 10 percent of staff as it faces bankruptcy and pandemic

Bill Trotter | BDN
Bill Trotter | BDN
A car drives along the entrance road to Calais Regional Hospital in this Aug. 21, 2019, file photo.

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Calais Regional Hospital is cutting its full-time workforce by about 10 percent as it contends with bankruptcy and the pandemic, the hospital said in a memo sent to employees on Monday. It marks the latest in a long series of reductions to staff and services at the critical access hospital, which has continued to operate in the red year after year.

The reduction in force will begin this week through layoffs, attrition and “reorganizing of positions within the organization,” according to the memo from CEO Rod Boula.

More than 40 percent of the cuts will be among “high level or management positions,” he said, though his message did not specify which departments or types of jobs will be eliminated. A spokesperson said the hospital is not releasing those details.

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The hospital received $623,000 in federal stimulus funds under the CARES Act in April, according to officials connected to the hospital’s bankruptcy case. But it can’t secure additional financial assistance through the federal Paycheck Protection Program; applicants are not eligible if they are in bankruptcy.

Due to the hospital’s “economic condition and Chapter 11 bankruptcy; the impact of COVID-19; and the inability to qualify or secure adequate Federal and State funding relief, it is necessary to implement measures to stabilize the financial situation of the hospital,” Boula said. “The current pandemic has impacted our business so significantly that we must make some very difficult personnel decisions.”

Nearly 80 percent of the total revenue for Maine’s 23 rural hospitals comes from outpatient care, which has now been substantially reduced due to the pandemic, according to The Chartis Center for Rural Health, which has studied the vulnerabilities of rural facilities. Hospitals across Maine have furloughed staff and reduced pay in response.

The 25-bed Calais hospital has fought back against its ineligibility for Paycheck Protection Program funding in court. On April 27, it filed a complaint in U.S. Bankruptcy Court for the District of Maine stating that the U.S. Small Business Administration violated the law by discriminating against the hospital’s status as a debtor.

The hospital “projects that it will run out of money to pay ongoing expenses by early June if it is unable to obtain funds from PPP or other sources and in the absence of a widespread outbreak of Covid-19 in Washington County. This would result in the Debtor being forced to immediately close its business without sufficient funds for an orderly wind-down,” the complaint states.

The anticipated savings from the staff cuts is $2 million annually, according to Boula’s letter. The hospital lost a total of $8.13 million between 2014 and 2018, according to information compiled by the American Hospital Directory.

Leadership changes and a new organization chart will be available for staff by May 8, Boula said in the memo. At the staff level, people will be asked to leave voluntarily first and “then based on the needs of the Hospital.”

The union representing the hospital’s nurses and other staff have demanded to immediately bargain over the terms of the layoffs before any union members are affected, according to Todd Ricker, lead labor representative for the Maine State Nurses Association. The union has also requested more details about the hospital’s plans and its current staffing situation.

There are 211 full-time employees at the hospital, according to DeeDee Travis, vice president of community relations at the hospital. Between nurses, medical lab scientists and technical staff, more than 50 are unionized, Ricker said.

Unionized nurses and medical lab scientists have been in contract negotiations with the administration since October 2018, when their last contract expired. A new technical bargaining unit, which formed in June, is still negotiating as well. Both authorized a strike in 2019, though workers haven’t officially gone on strike.

The hospital phased out newborn deliveries in 2017 and ended outpatient cancer care in 2018. It filed for bankruptcy protection in September 2019. It switched to a cheaper outside staffing company for its emergency room doctors at the beginning of February. The Maine Department of Health and Human Services recently appointed an ombudsman to oversee patient care.

When asked if the hospital was heading toward closing its doors, Travis said, “We are taking the necessary actions for survival, not closure.”

“We are running a dual track course of action making the necessary changes to come out of Chapter 11 on our own or with a partner. The changes are crucial for either option to be successful. We believe these necessary measures will help us navigate this crisis, while we focus on the importance of ensuring the ability of CRH to provide needed healthcare services and maintain the hospital’s presence as an economic engine for our community,” Boula said.

BDN writer Charles Eichacker contributed to this report.

 


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