FARMINGTON – After citing more than $15 million in losses dating back four years, Franklin Community Health Network announced on Wednesday it is cutting about 40 positions, reducing the number of hours for some employees and other operational cuts. Also approved was a wage and salary freeze for FCHN employees through this year.
The Franklin Community Health Network Board of Directors approved the plan at a meeting Tuesday in a move “to put an end to a string of losses by reducing both the staff and the operational footprint of the organization to better match patient demand,” according to a statement issued on Wednesday afternoon.
The restructuring is needed to “ensure the stability of FCHN well into the future, providing a strong foundation upon which the health care provider can grow.”
The plan eliminates the equivalent of about 40 full-time positions by not filling vacant positions, reducing hours for some employees and through layoffs affecting approximately 22 individuals. Prior to the announcement FCHN employed 557.
The plan also reduces fixed overhead at Franklin Memorial Hospital, better aligning facilities to patient demand. This includes reducing the number of active operating rooms from three to two and reducing the number of beds in the intensive care unit from five to two. Both of these changes serve to better align hospital capacity with the current demand for these services.
“This organization has been a leader in community health and it has an important role to play as a provider of high quality care in the greater Franklin County region,” said Timothy Churchill, interim CEO of FCHN. “These are not easy steps to take, but we have been on an unsustainable course, and that puts a lot of good work at risk.”
Churchill said he does see a bright future for the organization. He said a robust primary care system – one that treats the whole patient in what the industry calls “Patient-Centered Medical Homes” – will be at the heart of any vision for FCHN. He believes other opportunities exist for the organization in orthopedics, cardiology, women’s and maternity care and general surgery services.
According to FCHN, since July 1, 2011, the organization has lost more than $15 million. “If it had not been for some one-time federal money, the losses would have topped $20 million during that time,” Churchill noted.
“Our goal in this process has been to keep patients first while putting FCHN on a sustainable path for the future,” said Churchill. “FCHN has a bright future, but to realize that future we’ve got to put these structural financial challenges behind us and build on our solid foundation.”
He said there would be no reduction in services offered to patients at the organization’s Farmington campus, and FCHN will continue to invest in its Livermore Falls practices. However, he said FCHN needed to take advantage of some internal efficiencies in order to stem the losses.
For example, Franklin Memorial’s three operating rooms had been running at about 60 percent capacity. Churchill said two rooms can accommodate that same volume, with the same quality of care, but with lower overall impact on the organization’s bottom line.
A number of factors have conspired to create a structural deficit in Franklin’s budget, Churchill said. Significant among them are reimbursements from the federal government for Medicare and Medicaid services that do not cover the full cost of providing that care in a rural setting. Also, the failure of the state of Maine to expand Medicaid under the federal Affordable Care Act has hurt the hospital’s finances.
“Unfortunately, we are not alone,” noted Clint Boothby, chair of the FCHN board. “Community hospitals across Maine are struggling, especially those that don’t meet the standard to be designated ‘critical access’ by the federal government.” That designation, which is given based on geography and other factors, protects small rural communities by reimbursing hospitals for the cost of care, rather than forcing them to rely on inadequate Medicare reimbursement rates.
In addition to having the number of operating rooms and intensive care beds better match demand, FCHN will take a number of steps across its system to achieve savings while meeting patient needs.
For instance, administrative functions at FCHN’s NorthStar Ambulance operation will be reduced, but no reduction in coverage or service is expected.
Likewise, Emergency Department usage is down slightly at Franklin Memorial – about 5 percent over four years – and staffing will be adjusted accordingly.
The FCHN radiology office in Rangeley will be consolidated with the radiology service on the FCHN campus in Farmington. A separate radiology service in Rangeley has become impractical, with fewer than four X-ray procedures each week on average in recent years.
And, while FCHN expects to continue investing in its Livermore Falls location, some physician practices located on the Farmington campus will be consolidated into more efficient locations. This will enable practice personnel – both physicians and clerical staff – to work more closely together, caring for the same number of patients in a more efficient way.
The FCHN board has, as well, approved a wage and salary freeze for FCHN employees for this year. The board hopes to resume wage and salary adjustments in fiscal 2017, if financial targets are met. The board also authorized temporary reductions in paid time off and retirement benefits across the board. These measures saved the equivalent of 25 full-time jobs within the organization.
“This was a particularly tough decision and restoring wage increases will be a priority once we are back on strong financial footing,” said Boothby. “Our employees do an outstanding job, and this organization has been recognized repeatedly for the quality of its care. Unfortunately, we are caught up in forces we can’t easily control.”
Left untouched in the cost-reduction plan are FCHN’s community health programs, spearheaded by the Healthy Community Coalition of greater Franklin County, which is widely regarded as national models for improving wellbeing.
Like many health care organizations in Maine and nationwide, FCHN decided about three years ago that it needed to partner with a larger organization to navigate the changing health care landscape. In 2014, the FCHN board voted to become a member of MaineHealth, the state’s largest health care system with member organizations throughout southern, central and western Maine, as well as Carroll County, N.H.
Churchill, who came into the interim role of CEO two months ago following the retirement of Rebecca Arsenault, is the CEO of another MaineHealth member, Western Maine Health, parent of Stephens Memorial Hospital in Norway.
“As a system, we’ve been able to create some significant savings with shared purchasing and other centralized functions,” said Churchill. “But we’ve got to do more to put FCHN on solid footing.”
MaineHealth will continue to leverage its system resources on FCHN’s behalf, Churchill said, noting that MaineHealth’s NorDx labs will soon partner with FCHN to bring the same level of lab services to patients at lower costs.
FCHN’s board is currently working with MaineHealth leadership to create a strategic vision for the organization. Though the work is ongoing, Churchill says he sees areas of opportunity for FCHN not only to achieve financial health, but to fulfill its mission of “working cooperatively with others to achieve the highest level of health and wellness possible for the people of west-central Maine.”
“Our goal as a system is to provide people with the best possible care as close to home as possible,” said Churchill. “That is part of our MaineHealth vision of working together so our communities are the healthiest in America.”
Suddenly they can make all these cuts and not affect patient care. Doubt that….But if it should be true why wasn’t it done sooner? They had to have seen it coming for awhile; you don’t just get up one morning and say ‘crap! we lost 15 mil!!’. And don’t plan on paying less for these reduced services.
‘Also, the failure of the state of Maine to expand Medicaid under the federal Affordable Care Act has hurt the hospital’s finances’………….it has hurt the hospitals finances because people like me who fall inbetween the cracks, ( who don’t make enough to qualify for insurance, but DO qualify for Medicaid, but cannot get it because the gov did not want it) have to sometimes use the emergancy room as our doctor..and we can’t pay, so it costs the hospital money…( and before I get ‘hate mail’, I have only used the ER ONCE in the 3 years I have not had insurance, because I thought I was having a heart attack) But i know of people who go there all the time for ear aches, toothaches, a cut, scratch..little things…
The WHOLE medical system needs to be revamped..get insurance companies OUT of it, they know nothing about medicine, yet determine who gets what and how much it will cost..Universal health care is the way to go…I have family & friends in Canada who says it works great..I have a friend in England who also says it works great…if they can do it..why can’t WE?????
Suzie – I would guess your relatives in Canada are relatively “healthy”? That’s why they love universal health care. EMMC in Bangor loves universal health care as well, you know why? Take a typical Canadian who smokes all their life and ends up with heart disease and needs open heart surgery. This great universal health care puts them on an 8 – 14 month waiting list. This leaves them no other option but to come to the states and pay cash in order to have lifesaving surgery. Careful what you wish for, universal health care isn’t free. The Federal Government doesn’t have a big savings account just waiting to hand over free stuff. Read up on Sweden and their universal health care, seems to work great, but it’s not free. Income taxes and sales taxes are incredibly high. You would be devastated to see how little you get out of your weekly paycheck, but then again, you would get a lot of “free stuff”.
Suzie, I agree with you completely.
I signed up for Obama Care, too. I had chosen the cheapest , which would have cost me $28 a month. But then, with deductions counted against my income (student loans), I was told I didn’t make enough money. So, in a couple of years, I can qualify for Medicare, If I don’t drop dead, first, or if the government doesn’t raise the age from 65. I’m not going to bother seeing a doctor. If I supposedly can’t afford a $28 payment each month for health care, then I sure can’t afford paying a doctor.
I thought “Obama Care” fixed these problems.
@Living the dream,
I have many Canadian friends and relatives, both healthy and not. While they do a complaints about their system, none of them would trade their plan for anything I have the option of purchasing. Waitlists for lifesaving surgery in Canada are a myth.
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2539033/
http://www.aarp.org/politics-society/government-elections/info-03-2012/myths-canada-health-care.html
@Jim,
No, Obama Care doesn’t fix all these problems, but it is a good step in the right direction. Healthcare is sometimes like building a bridge. Getting it 90% of the way there isn’t enough to make it work.
Well past time to unionize.
This is what happens when people take extra breaks, use their cell phones when they are not supposed to and it goes on and on. Not saying that everyone is guilty of this but it hurts everyone. There is always fat to be cut somewhere. Don’t want to sound mean or bad but It is true. Good luck to those who have lost their jobs, but sometimes change is good, it was for me.
Dear Administration and Board of Trustees:
I can appreciate the need to reduce operational expenses to balance the budget due to cutbacks in federal funding to hospitals but I wonder if the organization is certain we are sustaining our market share and looking at ways of increasing our revenue. I believe that in the process of reducing expenses we have also lessened some of our revenue making specialties such as orthopedics. I am a past employee at Franklin Memorial Hospital with over 25 years of service and lost my job a few years ago due to reduction in employment force. It was a very dedicated employee who constantly looked at ways of reducing expenses to save monies to the organization and brought those skills to another corporation. It saddens me to see the lack of provider coverage in specialty and primary care which has forced community members to get their services from another healthcare organization. We continue to lose providers due to the lack of job satisfaction and confidence of the organization’s finances. I would challenge the Board of Trustees to work with the administrative leadership to take a serious look of rebuilding our revenue resources and enhance relationships with staff and providers.
Living the Dream~~ actually my friend in England’s daughter had cancer…she was seen IMMEDIATLY, treated IMMEDIATLY, and is now cancer free…some of my family in Canada have had medical problems, and all were seen and treated immediatly..there is no 8 to 14 months delay in appointmemnts! I have asked them all many questions, and all have said it is very good, fast, accurate care.
LePage brags about how he is reducing the number of government employees. He is balancing the budget of Maine on the backs of those without insurance by forcing hospitals and doctors to get unpaid for their services. And how about jobs? What did he really create? Nothing that hasn’t already been done before — blueberries and maple syrup, like that’s going to make a huge difference. And even at DHHS, they have one case worker to handle a lot of people. I recently went there. I am a senior citizen and get a little less than $150 a month. I waited almost 2 hours and then was told to just leave the paper work. I have yet to find out if I’m going to get any or not. And when you call, the receptionist forwards you to a worker who never answers the phone. LePage is a bigot who targets the elderly, the disabled, the addicted, etc. He refuses to expand MaineCare (medicaid) although most other states have. I think he just wants all the “undesirables” to either leave state or drop dead.
Speaking of “Canadian waiting periods”….I required elective surgery to correct surgery done many years ago. Due to my insurance company’s policies, the decisions as to whether this would be covered and “who would cover what” spanned over 9 months and ran into two benefit years. This cost me two deductibles, two co-pays and two out-of-pockets for all the various tests and consults…..before I was finally able to get the surgery needed. There are “waiting periods” and then there’s foot-dragging, paperwork stalling insurance companies. Which is worse?
And might Governir LePage’s refusal to allow MaineCare expansion have perhaps some effect on why the Affordable Care Act is not benefiting more Mainers? I mean, let’s put the apple where the pie is.