The pending closure of the obstetrics (OB) unit at Calais Regional Hospital (CRH) has generated significant concern from the eastern Washington County region it serves. Community members, city councillors and hospital employees have vociferously expressed their concerns -- most of which are for the health of the mothers and children - through multiple channels. The hospital has responded in its defense, citing financial challenges that necessitate the OB unit's closure.
The announcement of the closure was made in May, prompting a quickly organized protest at the hospital that was dispersed by police. Approximately 50 protestors assembled outside of the hospital, many of them bearing signs that read "Save our OB / Boot Quorum." Quorum Health Resources is the Tennessee‑based management firm that CRH has utilized for 30 years, paying it an annual fee of $400,000, in addition to the salaries of the hospital's CEO and CFO, both of which are hospital employees. According to the publicly available IRS 990 form, Quorum was paid $899,333 in 2015. This amount appears to have been fairly consistent between 2010 and 2015.
Questioning Quorum's services
"[Quorum] brings a lot of value with respect to the services that we can use," says CRH CEO Rod Boula. Boula says that being with Quorum provides the hospital access to consulting services for which it would otherwise have to pay another firm. "Quorum has a core of individuals that we're able to tap. For that fee we get, in return, the use of consultants to help us." If the hospital was not affiliated with Quorum, Boula says, "We would have to do a lot of services outside, and it would cost a lot more."
Dee Dee Travis, vice president of community relations, says that Quorum secures contracts for reduced fees by negotiating for better pricing. One example she provided is patient surveying, which is a necessary function of the hospital. Additionally, she says that Quorum provides educational resources to the hospital's board.
"Regarding Quorum, it should be understood that Quorum doesn't make decisions," says Boula. "It's the board that has the ultimate fiduciary responsibility to make decisions. They manage. They bring the facts to the table for the board."
The board's role in the closure was not lost on the Calais City Council, which responded to the announcement of the closure by declaring that it had "no confidence" in the hospital's board and later formally requesting that the board resign. Questions were raised regarding how board members voted, why the board meeting minutes are not made public, and how the board membership is determined.
According to Boula, the hospital is a nonprofit private enterprise and as such board meetings and their relevant details do not need to be made public. He says he would speak with the hospital's legal retainers to determine if the vote regarding the OB closure could be released. As of 2016, the hospital's board of directors consisted of Herbert Clark, Lawrence Clark, Suzanne Crawford, Linda Gralenski, Everett Libby, Dennis Mahar, Ronald McAlpine, Marianne Moore, Todd Smith and Sharon Weber.
"This is not an easy decision," emphasizes Boula. "It's not arbitrary and capricious. It's thought out. It's what we have to do to survive as a hospital."
CRH by the numbers
Financial records were provided to demonstrate the hospital's fiscal situation. Over the past seven years, the hospital has averaged a loss of $1,827,763 each year. In 2016, the loss was $1,212,914. The OB department in particular has been generating a loss of $500,000 a year, according to Boula. The cost of keeping staff on‑call for emergency surgeries is close to $400,000, and according to the 2015 990 form, gynecological doctor Hatem Hatem was the highest paid physician at $409,753 a year. The department has been generating a loss in part because OB services are not considered by the federal government to be "reasonable" and "allowable" for this area based on its demographics, and as such, they do not fall under the 101% Medicaid reimbursement program C a program that was already reduced to 99% after the 2013 sequestration.
Four years ago, the federal government enacted a change in the way that Medicare reimburses for "free care" given to low-income patients. Previously, such care was reimbursed at 101%; now it is reimbursed at 55%. According to the hospital's records, costs for free care doubled as a result, amounting to $1,858,519 in 2016. Bad debt also has increased from $1,295,672 in 2012 to $2,143,378 in 2016.
The changes being implemented by the government are unprecedented in Boula's experience. "I've been doing this for 34 years, and I can tell you that in the last five years healthcare is changing more rapidly than I've ever seen it in the past. It's happening fast." Boula says that changes are being put in place at a federal or state level that don't consider the impact on small rural communities and hospitals.
Other increased costs experienced by the hospital are related to billing changes. The hospital's 990 records indicate that between 2010‑2013 the cost for emergency room physicians averaged about $1.3 million a year. No records are available for 2014. In 2015, the hospital paid over $2.7 million to Blue Water Emergency Partners for the same services. According to Travis, the increase is due to how Blue Water bills for its services; previously the company was paid partially by CRH and partially by billing patients, but now the charge goes only to the hospital.
One of the most‑voiced concerns within the community is that the OB closure may indicate that the hospital itself will soon be closing. With the hospital's financial picture demonstrating steady losses and Boula stating that its reserves are running low, the concern is not unfounded.
However, Boula says that the hospital is aiming to do everything it can to maximize its efficiency. "As part of our strategic plan for the next three years, we're assessing all service lines," he says. Services that are covered at full reimbursement by Medicaid are going to be expanded at the hospital, including oncology, pulmonology and cardiology. Telemedicine services will be expanded to provide the community with better access to specialists and encourage more usage from the local population. The community's usage of those services will be a determining factor in the hospital's success. In no uncertain terms, Boula says, "If we're going to be in a community that's going to be reluctant to change, you aren't going to have a hospital."
Steps taken to protect patients
The hospital's financial situation is cited as the cause of the OB unit's closure, but the mothers and children involved will be the ones who most feel its effect. According to Chief Nursing Officer Ericka Marshall, the hospital's OB unit had "great quality measures" and had received awards as a result. The OB unit was among the first of Maine's hospitals to attain silver status. Marshall says that the hospital's commitment to providing services capable of handling any complication during pregnancy will be ongoing and that the hospital is working with other organizations to provide prenatal care, women's care and gynecological care in general.
The hospital's emergency room personnel will all receive at least 25 hours of training in assisting mothers who are experiencing pregnancy‑related issues. "That education will include all anticipated complications that we would expect to see at a rural hospital," says Marshall. First and foremost in the training is proper identification of emergency situations that will require services beyond that which CRH can provide. In those cases, the mother will be transported to a suitable location with a trained nurse alongside her. Marshall says that it takes approximately 45 minutes to transport a patient to Bangor via LifeFlight of Maine, which is the same amount of time it can take for an on‑call surgery team to assemble at the hospital at present. Last year's single incidence of an emergency c‑section did fall within the national guidelines of being initiated within 30 minutes, Marshall says. Overall, in terms of emergency situations, "You're looking at a really small percentage of patients," she says.
Additional certification will be given to emergency room personnel to provide care to neonates, including neonatal resuscitation. Staff will have the capability of monitoring neonates to ensure that they are not decompensating and to provide treatment if such issues do arise.
With a community accustomed to having the choice of receiving high quality obstetrics care close to home, facing the closure of the OB unit is not easy. For the hospital, its ongoing survival will depend on community patronage for the services it continues to provide. "Everything that does leave here hurts us," says Boula. "The last thing we want to do is cut programs or write people off."