Official: Blue Hill hospital layoffs certain

Official: Blue Hill hospital layoffs certain


By Meg Haskell
BDN Staff

The top administrator at Blue Hill Memorial Hospital has announced an undetermined number of staff layoffs in an effort to stave off bankruptcy.

In a letter released to employees and news outlets Wednesday, interim administrator Dr. Erik Steele said a number of belt-tightening measures, including staff reductions, must be undertaken if the hospital is to continue serving the people of the Blue Hill peninsula.

In the letter, Steele said some cost-saving measures were put in place a few weeks ago, including a hiring freeze, a ban on unnecessary travel and other steps. But in order to avoid financial disaster, he said, staff reductions are unavoidable and will be announced Jan. 19 or 20. About 340 people are employed at the hospital.

“We have not yet decided whose positions and how many, but if we don’t cut positions we will drive off the financial cliff,” Steele said in the letter. One position already has been eliminated, that of Chief Financial Officer Jeff Provenzano, who left the hospital about two weeks ago and will not be replaced, Steele said. He esti-mated Provenzano’s salary at about $100,000.

In recent weeks, the hospital has sold off investment stocks in order to make its payroll, according to the letter.

“If we don’t turn things around, in a few more weeks we will have burned through all of our unrestricted investments, used every penny we can borrow from banks and [parent corporation Eastern Maine Healthcare Systems], and have put off companies as long as we can to whom we owe money. We will basically be bankrupt. We — all of us, in this together — cannot allow this to happen,” Steele said.

Steele said the immediate goal is to increase cash flow by about $250,000 a month by cutting costs without negatively affecting patient care. But among measures under consideration is the elimination of obstetrical services at the hospital. About 120 babies were delivered at Blue Hill Memorial in 2008.

Steele was named interim chief executive officer last month, replacing former CEO Tim Garrity, who had been in the position for about five years. Blue Hill Memorial Hospital is an affiliate of Brewer-based EMHS, where Steele serves as chief medical officer.

Steven Michaud, president of the Maine Hospital Association, said Wednesday that he is not aware of any other Maine hospitals in such perilous financial straits as Blue Hill Memorial. But Michaud said virtually every hospital in the state is reporting a sudden drop in business, driving down revenues while most costs remain fixed.

“We assume it’s the economy — people are putting off the procedures they can put off,” he said. Many people with private health insurance have experienced an increase in their deductibles and other out-of-pocket costs, he said, and as the national economy spirals downward they are less willing or less able to share the cost of their care.

Meanwhile, Michaud said, the state’s recent increase in Medicaid recipients — currently about one in every five Mainers is covered by MaineCare, as the program is called here — continues to drive up the percentage of care delivered to that population. But MaineCare reimbursements are significantly lower than private insur-ers’, and the program still owes Maine hospitals an estimated $400 million in backlogged payments dating to 2005, Michaud said.

Blue Hill Memorial Hospital is owed about $3 million in back payments. Brenda Harvey, commissioner of the Maine Department of Health and Human Services, said the hospital is scheduled to receive a payment of slightly more than $300,000 at the end of this week, the balance of what is owed from 2005. The remaining $2.7 million owed from 2006, 2007 and 2008 could be paid off over the next two years if the Legislature approves the biennial budget to be submitted by Gov. John Baldacci, she said.

But even if all payments were current, Harvey said, Blue Hill Memorial Hospital must develop a sustainable business plan to assure its long-term viability, including determining the needs of the community it serves and which of those needs it can afford to meet.

Steele said in an interview Wednesday afternoon that the layoffs will come from clinical, administrative and support positions. He emphasized that he is not eager to eliminate obstetrical services.

“OB is a core service at Blue Hill and we won’t cut it unless we absolutely can’t survive otherwise,” he said.

Beyond that, he said, he remains confident that the hospital will survive this crisis. “We’re not going away,” Steele said. “This is all about saving this hospital and making sure it is viable for the long run.”

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Comments
22 comments on this item

Let Baldy create a new fiscal plan to save the hospital. If Maine owes the hospital 2.7 million and hasn't paid, can the hospital forclose on Maine assets?

lol, i like you comment downeastdiva, but you know how the system works, maine can and will forclose on your assests but don't try to do it to maine, just won't happen, even though i would like to see it.

parent corporation Eastern Maine Healthcare Systems owns this place and they are fully responsible for letting it go under if it does. This is another example of the commercialization of health care in our communities. EMHS may very well have decided that a small community health center in Blue Hill is more profitable for them than continuing to support a real hospital.

EMHS does not "own" Blue HIll but has a relationship with it as an affiliate. Based on the article it sounds as though Blue Hill would have shut its doors already if it wasn't for EMHS being able to lend money and expertise. It doesn't sound like Garrity or Provenzano were doing anything but cutting the brake lines as BHMH was driving toward a cliff. Things don't get this bad all of a sudden and I don't recall hearing any real measures Blue Hill was doing prior to Dr Steele showing up to stave off this disaster. Best of luck to Dr Steele as he does a task that may be very unpopular but extremely necessary.

excellent point, downedfleeced

....oh and how about asking Mr Garrity and the BHMH board how this happened ... Steele is just the cleanup crew.

I used to only go to BHMH.. but it has really gone down hill the past 10 years... I know 2 people 1-17 and one in his mid 40s that have been there the past month and had bad EKGs... there were told that the EKGs showed they were having heart issues.. but... it was just an Anomaly, probably just gas... Seems that the person runnning the one for the 17 year old didn't know how to run the new machine.. He was fine.. after his mother took him to EMMC to make sure.. The other man went home as it was just gas and died later that day! Sorry but the quality of care has disapperared there. I know these things happen everywhere, but BHMH has a higher frequency.. I feel sorry for the people in the area.. but... if the quality of care there does not change for the better, they will be better off having to travel to Bangor or Ellsworth.

Isn't it kind of a luxury to have 2 hospitals less than 20 miles apart, 1 in Blue Hill and the other in Ellsworth?

Actually, EMHS does own the Blue Hill hospital. Blue Hill's former CEO was fired by EMHS's boss and replaced with Steele, who is a top executive at Eastern Maine Medical Center as well as an officer with EMHS. Blue Hill still has a local board of directors, but there's little they can do without EMHS approval. That's one reason Waldo County General Hospital in Belfast decided to become part of Maine Medical Center's organization in Portland rather than EMHS -- EMHS is a very top-down management style, while Maine Med gives local hospitals a LOT more local control.

The way I see it the health care industry is an albatross around every American's neck. While I don't have the faintest idea how to fix the skyrocketing medical costs and health insurance companies trying to drain everyone dry with their astronomically high premiums while people have HUGE deductibles, there must be someone out there somewhere who can come up with a plan.

One in Five Mainers on MaineCare?? I bet it's higher than that. The Maine Government needs to WAKE UP and start addressing the real problems in Maine like CREATING decent paying jobs instead of bankrolling more and more hand-outs (stolen from people who actually work for their money), and doing something about Anthem's strangle hold on it's Maine subscribers.

I am currently receiving my prenatal care at BHMH and could not be more happy with the choice I made. Not only do I feel I am receiving expert medical care and advice, but the entire staff really takes a personal and caring approach at each visit. Hopefully a solution will be found that won't have to eliminate too much at this hospital.

The deadbeats, Baldacci and Harvey, stiff BHMH for $3-million so Trish Riley can claim some more Dirigo "savings", and the people of Stonington, Deer Isle and environs get to ride another half hour in an ambulance. Baldacci and Harvey must own stock in some funeral homes down that way.

I find David889327's comment a little underinformed and disturbing. 20 miles apart is about right. If one lived in Surry, West Ellsworth or East Orland, it could be more like 10 miles to either, so pick your hospital. But there's another 20 miles or so further down the Blue Hill peninsula and onto the islands. For the folks at the extreme ends, it's a question of 20 miles or 40 miles for emergency or scheduled care. Hospital-level medical care is NEVER a luxury. There's alot of puckerbrush in our state more remote than 20 miles from such care, but to suggest that extending a 20-mile trip to 40 miles, over a road that is in places little better than a rutted cowpath, is somehow foregoing a luxury is ill-informed and ill-considered.

The best thing EMHS can do is 'merge' with a Boston/NY hospital group, or even a Canadian group.

EMMHS is "big" only in the Bangor Maine and it's resources will be drained beyond it's ability to stay financially solvent sooner than later in a the state has only 1 Million or so population but all aging rapidly with no youngsters to take up the slack.

Many of the other rural hospitalls in Maine have joined a group like Quorum and bit the bullet years ago to stay afloat.

It's now or be forced to do it under duress

At least EMHS and Dr Steele waited until after the holidays to make this announcement. Thank you. The entire organziation has 340 employees, and is a major employer on the Blue Hill Peninsula, whcih includes providing health insurance for its employees. Possibly the single major source of health insurance for the entire peninsula. BHMH does more than operate a hospital, they own all the physician practices and a home health agency along with Parker Shores, which has lost a great deal of money for the organization. Parker Shores was a dazzlingly bad idea, and so was the expansion of the main hospital bulding, becasue it becme too big to staff effectively and wa snot related to an increase in voluime of paying customers. Of those 340 employees, it would be nice to know how many work at the hospital itself and how many work at other branches of the organization.

If you look at the long history of this hospital, it has mainly operated at a loss and the difference was previously picked up by wealthy summer residents. This model was destined to end when the summer people no longer were able to carry the costs of modern medical care. What is the average number of people admitted to BHMH overnight? it's probably less than 12, which is about a quarter of the size of just one typical inpatient ward at EMMC in Bangor. How can anybody possbly think this is cost efficient? It is not. So the loss of overnight inpatient services here is not such a big deal, I do not believe they are serving very many people anyway. The same is also true of Mount Desert Island Hospital, where the overnight census can drop to less than a half-dozen during the winter.

The trend has been away from overnight inpatient services in the past fifteen years. What is the number of annual outpatient visits to BHMH services? also, what is the number and frequency of times when a person who gets an outpatient service at BHMH is referred to Bangor for followup? When this happens, the patient is driven past the hospital in Ellsworth on their way to Bangor, and so those person who are concerned about travel time should get more infomration as to whether overall travel inconvenience is improved with the EMHS arrangement.

The person who pointed out the distance from Deer Isle to the nearest hospital was making a valid point, I am not denying that the driving on the peninsula is more than just what is measured in miles. It might make sense to continue having an outpatient clinic and maybe a small surgi-center for minor procedures in this location so as to also be available in case of emergencies.

In wintertime there is a forty per cent unemployment rate on the Blue Hill peninsula, and with all the self-employed artists and lobstermen there, few carry health insurance. Rural poverty is a factor in the failure of this hospital. Obstretrics used to be a major source of rvenue because they had one specific obstetrician who drew pateints from far and wide, but he has retired.

Finally, Hancock County does not need three hospitals. BHMH along with Mount Desert Island Hospital, needs to close to inpatient services. The only logical location for a hospital is Ellsworth.

Gee Fredrogers, why don't you go right over the EMHS and show them how to run the place! You have NO idea the magnitude of this business. They are all over the State and in other parts of New England. Get your facts straight.

"...and the program still owes Maine hospitals an estimated $400 million in backlogged payments dating to 2005, Michaud said. "

This fact amazes and disappoints me. Our State needs to pay what it owes our hospitals. Enough is enough.

The economy, poverty level and aging population of the peninsula are all contributing factors BHMH's downward spiral.. Getting MaineCare, Medicare and all other insurance companies to pay their bills is a very complicated system of coding, documentation, collecting co-pays, submitting claims and processing bills in a timely manner. One nail in BHMH's coffin was not having well educated Coder/Billers in each off-campus clinic as well as in the hospital. When billing became centralized, the time from office visit to filing the insurance claim increased, which increased the time you waited for payment (or promise of payment) so you could then bill the remainder of the charge to the patient. The cash received from patients and from private insurances greatly helped with the day to day operations and paying of BHMH staff and vendors. As a former manager of a small PPC clinic, the monies we collected in co-payments alone would pay the electric, rent and phone/data bills.

When a majority of BHMH & PPC's billing was handed over to 'Big Daddy' EMHS, the process further deteriorated. For example, both of my parents were seen in the second quarter of 2007. They have received their EOBs (Explanation of Benefits) from both Medicare and their private secondary insurance. BHMH has yet to send them a bill for the remainder they owe. I realize that the impact MaineCare's lack of payment has been large economic factor, but receiving the funds that are available to BHMH would lessen its effect.

Another nail in the BHMH coffin was trying to be more than what was needed by the community. The addition many specialty services were not justified. How much did they pay to equip the operating room and train staff for orthopedic surgeries? How much revenue have they actually made from the investment. Did the monies received from having those orthopedic patients stay in the hospital for 3 acute days and 3 weeks of Rehab offset the cost of staff, facility, supplies and equipment of caring for these patients?

I agree with JoeN that the hospital expansion was a poor idea for so few inpatients and it did not really add to the efficiency of caring for outpatients. (Except for the ER, whose upgrade from 3 stretchers was long overdue) On the same line, was a two story medical office building really needed? Has the overall revenue received been greater than the costs?

It is unfortunate that the BHMH board bedded down with EMHS instead of building the tri-hospital community with MDI and MCMH. Blue Hill still may not have continued as an inpatient facility, but it would have kept local residents in our community receiving quality personalized care. I fear these upcoming layoffs are the 'Farewell to Blue Hill Memorial Hospital' and 'Welcome to Blue Hill Health Care Mall'. For those patients who want to continue to receive the excellent care we had before the Garrity administration, I'll see you in Ellsworth.

My guess is if they are releasing to the media that OB services may be cut that the writing is already on the wall. Sounds like a big clue not to start your care there as you most likely are going to have to switch mid-Pregnancy. Real sad for the community there.

Hello world...

Blue Hill hospital showed a profit the year of the takeover. EMMC did not

BHMH showed a loss each year since. The EMMC balance sheet showed marked improvement, and I believe, posted a profit.

Cost sharing seems to be a one way street. How many Thousands of dollars are sent each week to EMHS? Billing and clerical are now handled off site. I dare not quote the numbers I have heard, but if my info is right, there is money for many employees being sent upward. In return, billing is just as slow, and errors don't seem to decrease. The bills that do get sent to the state are ignored. I wish I could take 2 years to pay my bills, especially if I could then negotiate to pay a percentage, never in full! The state has small hospitals over a barrel. EMHS also has Blue Hill over another barrel. These agreements are foisted off on smaller facilities, with little or no benefit, except to the parent facility.

The one thing BHMH is noted for is its OB department. My children came into this world via BHMH, and I was very happy with the care. Its a mistake to close this department.

BHMH and its administrators have shot off in several directions lately, with new specialties and new doctors... most have not stayed. It is a mistake, and in my opinion, someones fault, if many thousands of dollars are spent, and new staff is hired, just to let new doctors visit for awhile, then move on. BHMH is left with newly renovated suites, fancy new equipment, and extra staff, with no doctor and no procedures...That, coupled with EMHS skimming thousands off the top every week, is a recipe for disaster...

Save money by getting rid of top paid lady who (works/) doing nothing but sit on her butt. Yes -you know who you are!!! Quit and let the hospital live!

You know who you are.Over paid and under worked!!

Blue Hill is a great place to work ,as a patient or as a family member of a patient.I realize that there are larger hospitals available but since I have been a consumer of both none can compare to the care you receive that is within their scope.Blue Hill has always subscribed to the Patient First principle.The OB dept is tremendous and when I worked in 1970 I was impressed by progressive ideas that they were doing.I was trained at a large OB hospital in Boston only 3 years prior and saw methods of child birth that was so archaic and dangerous that none of us wanted to go through that.I also had delivered premature twins at the large Bangor hospital in which my experience was far short of what was being done kn BHMH .I was given medication which I had refused but given because that was the doctors orders which caused resp depression in my infants and then when I asked a question I was given anesthesia.and knocked out. I went to Blue Hill 18 months later watched the patients having choices of natural birth using Lamaze methods with no medication ,families in the delivery room if that is what the pt wished.If the patient wished they left the hospital shortly after the birth with their infant.If I had known about there services I certainly would not have made the hour trip from a town 15 miles away from BHMH to have my babies.That service still continues with many of those same nurses that are wonderful. I also had a niece 2 years ago that walked out of a Bangor's OB office after being followed for seven months because of her treatment called BHMH and got in within 2 days to see a MD and checked into their system and delivered her child there allowing her to have the birth experience she wanted.You can have the intimacy of the home birth experience with the safety net of the hospital services if needed .I feel that this is a service that needs to be promoted not deleted .I have worked in other states and larger OB dept's and nothing can compare to this small hosp birthing services.This type of care goes to other areas as I recently had a family member that spent her last few days of her life there and that caring spirit was there for her and the family.I also know that had this hospital wasn't there this same person wouldn't have lived for nine years after having a near fatal heart attack.If she had to have made an ambulance trip to Ellsworth that extra time would have cost her life..These small hospitals that some would like to see be closed are the only place to care for patients when there are no critical care beds in the larger hospitals or the trips too long for a critical pt to survive and Life Flight can't fly.The larger medical centers are becoming critical care centers taking care of the more acute patients that need the specialized services that aren't available in the community hospital..There is a place for these small hospitals in the care of less acute patient and is a comfort for the patient and family and being cared for medical staff that are familiar or neighbors goesa along way to help with surviving illness.The larger hospitals try but can't duplicate the coziness of the small community hospital.I have worked many hospitals around the country from 100 to 400 compacity and none can hold a torch to the caring behaviors that I witnessed.at this small hospital.

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