Timothy F. Garrity, CEO Blue Hill Memorial Hospital
Blue Hill Memorial Hospital has been serving the health care needs of this area for over eighty years. Though we are known for a superb medical staff, excellent patient satisfaction and a warm, caring environment, it is also widely known that we struggle financially. In fact, over the past eight decades, there have only been a few instances where the hospital finished the year in the black.
In fiscal year 2005, BHMH's operating loss was over $1.2 million. In fiscal year 2004, there was a small positive margin. However, FY2003 and 2002 saw losses of $1.7 million and $1.8 million respectively. Over the past ten years, our operating losses averaged $1.2 million per year. The loss adds up to $11.5 million.
Two years ago, the Hospital and Foundation boards approved a strategic plan that has BHMH operating with a 2% positive margin by the end of FY 2007. A 2% margin on today's operating budget would mean a gain of over $500,000. We are trending toward a $1.2 million loss for FY 2006. We must close a gap of $1.7 million.
We have warned for years that persistent problems with MaineCare reimbursement will lead to a loss of health services in rural communities. When five rural pharmacies closed in the last year, we said this was the canary-in-the-coal mine scenario: first pharmacies, then physician practices, nursing homes, ambulance companies, then rural hospitals will close, if funding troubles continue unabated. Maine owes Blue Hill Memorial Hospital over $865,000 from services provided in 2003 – 2004. The state's practice of under payment and delayed reimbursement makes our financial difficulties considerably worse.
But some of the fault is our own. For years, we have maintained service lines and customs that we know undermine the financial stability and future of the organization. It is apparent that we can not do everything we always have, the way we have always done it, and simultaneously achieve and maintain financial stability.
BHMH is in the midst of developing a restructuring plan. Change is difficult, emotionally charged, yet a necessary part of keeping BHMH a strong and viable organization. Even at this early date, we know the decisions are not going to be easy. The board and management team are looking at every department in the organization including Peninsula Primary Care, Obstetrics, Castine Community Health Services, fitness classes and Healthy Peninsula Project. In the case of community health programs, the hospital suffers an enormous financial penalty because Medicare and Medicaid do not see prevention as an allowable cost, and therefore does not fully reimburse us for these services. Our goal is to link these programs with organizational partners who don't suffer this penalty, thus ensuring their presence in the community.
In the case of other service lines, we have created task forces to consider their viability. Community members, board members, and staff will spend the next weeks looking at all possible issues and consideration to restructuring. The task forces will examine the consequences of keeping, reducing, or closing programs. Each option affects the rest of the organization – and our local communities. We will organize and host open dialogues with our communities during this time.
We expect the boards to vote on recommendations on November 16th. We will ensure we have a health system here on the Blue Hill Peninsula for the next generation. |
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