By Wayne E. Rivet
Staff Writer

As part of the Central Maine Healthcare “family,” Bridgton Hospital let go six employees last month as part of an $11 million system-wide cutback.

Despite the reductions, Bridgton Hospital President and CEO David Frum says the local facility is presently showing a healthy bottom line and it will make appropriate adjustments so patient care remains at a high quality level.

“Bridgton Hospital is a stable, financial organization. We have actually done at about our budgeted performance levels for the first two months of the fiscal year. We can’t extricate ourselves from being part of a system. When the system has its struggles, we’re going to have some struggles,” Frum said. “We need to be a participant in creating some solutions. We made some changes here even though performance has been relatively strong.”

Bridgton Hospital was under no contractual obligation to take part in the CMH cutbacks, but as a piece of the system, Frum said the local hospital needed to make a “contribution” in the “turnaround effort.”

“We’ve done it proportionally. When I looked at the changes being proposed, given our strength, we’ve done some things that will make us even stronger, as well as enhance patient care in several ways, but also make a contribution to the struggles of the system,” Frum said.
Having just arrived at Bridgton Hospital, Frum said making reductions is never easy.

“I’m most impressed with the staff here and their reaction to these circumstances. They rallied around it. We worked through the issues very systematically,” he said.

CMH employs over 3,200 people and has an annual operating budget of $418 million.

In late September, Central Maine Healthcare announced a plan to reduce some $11 million from operations so the organization could stabilize its finances and continue to ensure its ability to provide the best possible patient care.

“Maine hospitals are facing a perfect storm of challenges,” said Peter Chalke, CMH president and chief executive officer. “MaineCare owes our health system some $56 million dating back to 2007, and the debt is growing at a rate of over a million dollars a month. As the country continues to be mired in a deep recession, we are providing care to an increasing number of MaineCare patients, but we are paid at only 60% of our actual cost of their care. Also, some people have no insurance and others struggle to pay their medical bills, so our bad debt is rising. At the same time, we have experienced a slight downturn in patient volume. After years of predictable growth, the number of patients treated at our hospitals remains below our expectations for the first eight months of 2010.”

To address the deficit, CMH started some cost-cutting measures — deferred any general wage increases, cutback on vacation time, stopped filling most replacement and new positions and implemented policy changes to reduce operating expenses — in July. Last month, CMH made the following cuts: 23 existing management positions; a total of 35 layoffs (7 managers, 28 non-managers); elimination of about 45 non-management positions currently vacant; an 8% reduction in administrator salaries; reduction in hours worked for multiple departments; benefit changes (travel, education, tuition reimbursement, sick time); and ongoing cost reduction efforts in drug, medical supplies, negotiation of vendor contracts and other expenses.

CMH did not give Bridgton Hospital a “target number” to reach, Frum said.

“When I met with the senior management team here, we had to think through what would be an appropriate set of changes or reductions that would be proportionate, make a contribution to the overall cause, but not harm the great care provided here,” Frum said. “We went through a thoughtful process, and made the contribution we felt was appropriate. No one ever wants to reduce their workforce. One or 100, it isn’t easy. It was a very challenging time for the organization.”

Employees who lost their jobs were given a severance package. Three to four other employees had their hours reduced. Frum noted that every employee of the system was “touched” by the overall cutbacks, be it through reduced hours or benefits or pay.

Frum has seen staff “sitting in huddles” talking about ways they can insure continued strong patient care, despite reductions in personnel. Since the staff is “extremely dedicated to quality care,” Frum does not believe patients will see any difference.

“We really didn’t have a great reduction in hours here because our volumes and performance have been relatively stable,” Frum said. “We did participate in negotiations with vendors. We didn’t participate in everything across the board, but in many areas we did.”

BH has 250 full-time personnel as part of the hospital and physicians’ group. As expected, there was tension in the facility as cuts were being discussed. But, Frum was “amazed” by the staff’s genuine desire to do whatever it takes to make Bridgton Hospital an even more efficient and quality-drive organization.

“I can’t ask for a better team based on their response during this difficult time,” he said. “Stressful yes, but a very amazing and supportive reaction.”

Frum, who is a member of the CMH senior executive team, believes the reductions will address the financial challenges ahead. Although no one can predict what patient volume will be and when the state will pay MaineCare reimbursements to hospitals, Frum sees the cuts will stabilize the system and move it in the right direction.

Bridgton Hospital is owed close to $4 million in state reimbursement money. Because Bridgton belongs to a bigger organization — Central Maine Healthcare — it can withstand the delay of such a large amount of money. However, if Bridgton Hospital had remained as a “stand alone” facility, Frum believes the facility would have been in dire straits.

“For our size facility, not having that $4 million (which dates back to 2007) in our bank to reinvest in equipment or services, stabilizing and maintaining the business has significant, contributing impact on the decisions we made,” Frum said. “We are extremely fortunate to be part of Central Maine Healthcare. If we were a stand-alone facility, which we once were, floating that $4 million in debt would put us in a very difficult circumstance. The cash flow of the system helps us deal with this situation. If we were still a stand-alone facility with that $4 million owed from MaineCare, we would have had to make substantially deeper changes.”