Tensions ran high periodically throughout a meeting between the Calais City Council and Calais Regional Hospital (CRH) on Thursday, July 13, but, after both parties had the opportunity to present their situation, a mutual agreement to work toward transparency was reached. The meeting, held at St. Croix No. 1 Firehouse, was made open to the public, but no public input was permitted.
Rod Boula, the CEO of CRH, began the discussion by presenting the city council with the fiscal situation of the hospital. Boula explained that over the past seven years the hospital has averaged a loss of $1.8 million a year. Approximately $2 million a year is paid for temporary staff, which Boula identified as a significant but necessary cost. Other ongoing costs are free care and bad debt, which amount to approximately $4 million. The steady losses contributed to the hospital's decision to close the obstetrics unit, an announcement that was made to the community in May.
The hospital relies on Medicare reimbursement, Boula explained, but that reimbursement only comes for allowable costs. Obstetrics is among the costs that are not allowable, contributing to the hospital capturing only 38% of reimbursement value. Boula said that most critical access hospitals like CRH capture 75% or so. Ronald McAlpine, chair of the board of directors for CRH, said that the hospital is aiming to get its figure up to 55%.
Another significant cause of loss that was identified by Boula is the out‑migration of services to other hospitals. Boula explained that in the fiscal year of October 1, 2015, to September 30, 2016, Medicare reported an out‑migration of 47% of services, amounting to $60 million. By comparison, the hospital's net revenue is $37 million a year. Some of the out‑migration is due to services such as cardiology and neurology that are not available at CRH, but some of it is due to community members choosing to have services provided elsewhere. An estimate of how much of the $60 million figure could be captured has not been made available.
Boula concluded his presentation by demonstrating the financial value of CRH to the Calais community. The hospital employs 215 employees, with a total salary of $18.5 million. Of that amount, $13 million stays in the local economy. An additional $11.5 million is generated locally by the purchase of supplies and contracting services. In total, the contribution to the local economy is $28 million, Boula said.
The council members questioned what had been done to attempt to capture the losses experienced by the hospital. Councillor Anne Nixon said that there should be a procedure in place to inform the patient to have services conducted at CRH rather than taking them elsewhere. Boula said that word of mouth is the best practice for a rural community and that if even 1% of that $60 million could be captured it would help the hospital stay afloat.
Councillors raised the issue of using Tennessee-based Quorum Health Resources and the nearly $900,000 paid in management fees and salaries for the CEO and CFO of the hospital in 2015. Councillor Nixon said that, when a business is performing poorly, administration should be cut. Boula said that the hospital has been with Quorum for 29 years, and it has not always been operating at a loss. Dr. Joseph Dougherty expressed that Quorum provides management expertise, without which CRH would "stumble and fall" as a result of the increasingly complicated regulations imposed on medical facilities by the federal government. Dougherty added that Quorum quickly mobilized to install Boula to attempt to salvage the hospital based on his track record of doing so with other at‑risk hospitals.
Without an OB unit, the Calais hospital will be able to deliver babies in its emergency room, Boula emphasized. Dougherty added that while it isn't "ideal," all staff are being trained to accommodate potential delivery situations. Dougherty added that his wife is pregnant, and when the time comes they would be staying in Bangor, a point that Councillor Marcia Rogers challenged by asserting that not all community members could do so.
"Living in a very rural location is the privilege of the healthy," said Dr. Dougherty. "If you're not a healthy individual, you're accepting the risk that goes along with not having access to cutting edge care."
Councillor Mike Sherrard contested that comment, expressing that for most people in Downeast Maine, "It wasn't a decision to live here. We're here because this is where we were raised. As the board of the hospital is concerned, I think they owe it to the community to provide as much service as they possibly can."
Dr. Dougherty stated that it is too late to save the OB unit. "That water is under the bridge. That ship has sailed. What everybody should be focused on is what's the next service line that's going to be lost if this hospital doesn't get utilized?"
The councillors widely recognized the value of the hospital in the community but remained adamant that the hospital improve its communication to prevent the community from being blind-sided with announcements of closures in the future. Councillors also were adamant that term limits should be imposed on the hospital board.
"Please let the communities you serve be more involved in some of the decision-making," urged Councillor Sherrard. "Please let the communities decide who they want to be on the board so they can be more representative of the communities."
Accepting the desire for transparency, Chairperson McAlpine said that the hospital will be setting up a transition committee that will assist in making upcoming changes at the hospital a smoother process from the community's perspective. "There are going to be other changes at the hospital C there have to be," he stated. "We're going to try to be transparent as we make these changes."