At the recent annual meeting of the members of the Eastern Maine Healthcare (EMH) Corp. (who are representatives of the owners, the general public) a glowing description of the accomplishments, activities and stability of the organization was presented. However, a critical analysis of the facts discloses an important and notably different picture.

The reportedly solid financial status of Eastern Maine Medical Center (EMMC), the flagship of EMH, needs elucidation. During the first four months of 2003 the hospital finances were in the red, with an operating loss of $1.783 million. To offset this loss the charges to patients were increased 9 percent across the board, after an increase of 7 percent the previous year. Inflation, of course, has been dramatically lower than this. It is also to be noted that Gov. John Baldacci’s plan to rein in hospital spending expects a voluntary limitation of increase in future hospital charges limited to 3 percent maximum annually.

It is the impression of some observers that there is rather lavish spending of finances at EMH. Since its establishment 10 years ago, the primary health care organization called Norumbega Healthcare has lost an average of $2 million annually for a total of $20 million. This loss has been subsidized by EMMC. When questions were raised about this impressive loss, the answer has been, “That’s all right, because Norumbega physicians refer so many patients to EMMC.” The counterpoint has been made and ignored that those patients would have gone to EMMC in any event.

A third physicians’ office building, which dwarfs the size of its two predecessors, has been built at the front of EMMC at a cost of $11 million. This has been justified by claims that many doctors have been clamoring to buy offices in such a building, which would enable them to be closer to their hospitalized patients and would not be a cost to the hospital. Currently, one floor of the building is occupied by EMH’s own laboratory, Affiliated Laboratories. Another floor and a portion of a second are owned by Dahl-Chase Pathology, whose physicians do not have patients of their own. The remainder of the building is empty except for an obstetrician. At the annual meeting of the corporation, it was reported that the building was already half full. It is to be noted that it is also obviously half empty.

A $1 million “loan” has been made over a two-year period to enable the establishment here of a physician who is considered to be necessary for the region, though some of his colleagues do not agree on the necessity. The “loan” will be cancelled if the physician remains here for four years. Likewise, large salaries are being paid to certain specialty doctors in order to attract them here. Their salaries are far in excess of the income of their counterparts in the private practice of medicine. It is also highly doubtful that they can financially produce as much as they are paid. The justification of this has been that these additional physicians are necessary for the hospital to fulfill its mission.

Approximately $3.5 million has been spent on the purchase, clearing and leveling of a 72-acre parcel of land, which is strategically located in Brewer, to construct a suitable building for the EMH employees who are scattered in rental properties throughout the area. A private company has agreed to build a large $16.5 million office building on EMH land and lease it to the health-care corporation. Only a portion of this building is needed and additional occupants of the large remaining area have thus far not been found. At the annual meeting of the corporation it was pointed out that more than half of it is empty. There has been concern by some citizens that there are grandiose ideas being considered here. It is of note that a plan for three additional identical buildings on the EMH Brewer land has been contemplated in the hope of attracting other “clean” industries to the area and thus help relieve the economic doldrums of the region.

The question has been justifiably asked whether EMH has been losing its focus with this speculative enterprise outside the health care realm.

There is some concern that the priorities for development of EMH and EMMC may be wrong. There has been for several years general agreement that the adult and pediatric intensive care units of EMMC should double in size to accommodate the rapidly growing need in our area. Instead, the multimillion-dollar office building has first been constructed.

Questions have been raised as to whether complete information on some issues has been withheld from governing boards or that the information provided may be incorrect. The EMH board was told that two of the 30 physicians employed by Norumbega resigned in the past year, which is not considered to be an unusual turnover. It was not mentioned that seven physicians have resigned in the past several years and two nurse practitioners as well.

The Brewer land and building development has been deemed necessary because $600,000 per year is being spent on rental space for EMH employees around the city. Only after questioning was it revealed that half of that rental money is being paid by EMH/EMMC for property owned by itself. The annual salary paid to the CEO of EMH/EMMC is determined by a select few of the governing board members, called the Special Personnel Committee. The remaining members of the board are not told the amount of the salary. When a member asks for the amount he or she is told to go to the board chairperson and ask for this figure. Considerable difficulty has recently been encountered by members of the EMH Corp. to simply obtain a listing of all the corporators, which should be readily available to them. When the list was finally released, it was not current with a significant number of expired individuals still listed and included other people who seemed unaware of their membership.

The hospital financial data of income and expenses had been regularly published in the annual report of the corporation, but withheld in recent years. Only after urging by individual board members, the expense figures were finally published two years ago and the income as well as expense figures were published in the latest annual report.

During the recent controversial forced withdrawal of Dr. Theodore Silver from the EMMC board of trustees because of alleged conflict of interest, he was never allowed to present a defense of himself despite assurances that he would be allowed to do so. The highly regarded lawyer employed by EMH/EMMC spoke extensively about conflict of interest issues at the recent annual report to the corporation. He was of the legal opinion that Silver’s removal from the EMMC board of trustees based on conflict of interest was justified and correct. It should be noted that the highly regarded and knowledgeable lawyer employed by the EMMC medical staff reached the opposite conclusion.

In addition to all of the above points of discussion, there are several other issues regarding the governance of EMH/EMMC. Perhaps there has been a lack of broad representation of the boards by community citizens. Significant conflict of interest may be present with multiple board members. These issues are fortunately under study with regard to future changes.

There is apparently long-term self-perpetration of board members. The activities of the EMH nominating committee in the selection of board and corporation members may be open to justifiable criticism.

It is regrettable that some of the area’s best doctors and nurses have moved away or have gone to other health-care organizations locally because of the unrest and conflicts that are clearly evident at EMH/EMMC. Physicians, governing board members and hospital administrators must work together to correct this deleterious situation, which is harmful to the health care of our citizenry.

Thomas Palmer, MD, is director emeritus of Eastern Maine Healthcare and trustee emeritus of Eastern Maine Medical Center.