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St. Mary's Hospital Announces Layoffs
12/07/2012   Reported By: Patty B. Wight

St. Mary's Medical Center in Lewiston announced yesterday that it's laying off employees and eliminating positions as part of a strategic restructuring.  Hospital officials say the changes are needed to cope with a 23 million dollar debt owed by the state as well as reductions in Medicaid reimbursements.  As Patty Wight reports, St. Mary's challenges are not unique.

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St. Mary's Hospital Announces Layoffs
Originally Aired: 12/7/2012 5:30 PM
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According to St. Mary's spokeswoman Jennifer Radel, the restructuring has been going on for over a year, and it started at the top with the elimination of some senior leadership positions. "And our senior leaders also took a voluntary 10 percent pay cut, and our CEO reduced his salary by 20 percent."

A source told the Lewiston Sun Journal that up to 25 people could lose their jobs in this latest phase of restructuring.  But Radel says the number is fluid, partly because the hospital is trying to lessen the blow any way it can. 

"We have vacant positions that we haven't been filling," she says. "So we're hoping to, whenever possible, move an affected employee to another position within the hospital."

The challenges St. Mary's is facing are no surprise, says Steven Michaud.  He's the president of the Maine Hospital Association.  He says some of the challenges can be traced back eight years, when the state expanded Medicaid beyond the scope of what he says it could actually afford. 

Michaud says that's forced Maine hospitals to shoulder more Medicaid costs, which at times have risen to near-crisis levels, fallen back when the state makes some payments, then risen back up again. "And so right now, the debt is at about $460 million that we're owed, dating back to 2009," he says. 

The state's share of that is $160 million.  The federal government will kick in the rest, but only when the state pays its balance.  Michaud says the good news is that Gov. LePage and the Legislature have made adjustments to stop the debt from growing. 

Even though the bleeding has stopped, he says the current debt is crushing.  And on top of that, recent changes to Medicaid reimbursements will exact additional tolls. "St. Mary's  - we have the highest Medicaid business.  We're like - 21 percent of our patients are on Medicaid," says Joe Wood. the controller at St. Mary's. 

He says due to reduced Medicaid reimbursements, St. Mary's will take a $6 million dollar next year.  "And that's, like, a 25 percent reduction in our payments," he says.

Officials at St. Mary's say their restructure will increase efficiency and optimize care at the hospital.  Steven Michaud from the Maine Hospital Association says right now, these changes will mostly affect employees, not patients.

"That's the last thing that's going to happen in the hospital, is anything that impacts the bedside.  However, if this isn't dealt with, and dealt with soon, it's got to leak to impacting the bedside, and that's really where the crisis is," he says.

Michaud says he knows paying the hospital debt is a priority for Gov. LePage, but it's unclear when that might happen. It will depend, he says, on how much a priority the Legislature makes it.

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