Down East Community Hospital has been a cornerstone of daily life in Machias for more than 40 years.

But despite recent dramatic improvements reported in the hospital’s bottom line and quality of care, it is drawing sharp criticism from a small but persistent group of area residents, many of them former employees or in other ways connected to the hospital and the health care community.

The critics include doctors, nurses and others who charge the hospital’s new administration with alienating good clinicians who have worked in the community for many years, forcing them to practice in facilities in Bangor, Ellsworth and other places.

They say that despite recent investments in high-end technologies, too many patients are transferred to other area hospitals for relatively simple treatment because DECH cuts costs by staffing too few nurses and other care providers. They question the hospital’s financial relationship with the president of the medical staff, who leases space in his privately owned office building to the hospital for physician offices. Perhaps most important, they say the hospital is unresponsive to these concerns and has lost touch with the community it serves.

A petition circulating in the area demands the resignation of the chief executive officer, the chief nursing officer and the board of trustees. The petition, which also calls for the return of dozens of doctors and nurses who recently have left or been “disenfranchised,” has garnered about 1,084 signatures.

The hospital has defended itself vigorously. Over the past several months a storm of accusation, defense, innuendo and rhetoric has filled the opinion pages of the two local weekly newspapers.

In a recent interview, Wayne Dodwell, the hospital’s new CEO, dismissed the recent criticism as regrettable but predictable fallout from the process of improving the clinical services the hospital provides, stabilizing its bottom line and updating the governance structure. Dodwell characterized the critics as a small, disgruntled group – “a dozen or less” – all with some relationship to someone whose practice has been negatively affected by necessary changes.

Overall, Dodwell maintained, the community and most employees appreciate the hospital’s new professionalism, efficiency and improved standards of care.

A timeline of progress

Like most small hospitals, DECH fell on hard times in the 1980s and ’90s, a victim of Maine’s changing economy and demographics, the cost of acquiring new technologies, the growing number of patients without health insurance, and other factors that have driven many such hospitals into subsistence mode.

According to a timeline Dodwell provided, by 2002 the hospital was in serious trouble. That year, it failed a quality review by the Joint Commission on Accreditation of Healthcare Organizations, a nationally recognized indicator of health care quality and patient safety.

It also had failed a Medicare survey conducted by the state Department of Health and Human Services, jeopardizing the hospital’s ability to be paid by that program or by Medicaid, the two most important health care payers in Maine. The operating rooms were closed because of persistent environmental problems. A demoralized medical staff flat-out rejected a proposed restructuring and submitted a vote of no confidence in the administration. Under fire, in mid-2002 the CEO and board chairman resigned, 20 employee positions were eliminated, and the hospital ended up with a 6.3 percent operating loss of $1.3 million.

The beleaguered board engaged the services of a health care consulting and administration firm to find a new CEO. The company, Texas-based Quorum Health Resources, brought in Dodwell, a native of Massachusetts with a big, easy smile and a 25-year background in hospital administration. The board approved Dodwell, but when he took the helm in September 2002 it was as a Quorum employee, making DECH one of close to 200 hospitals in the U.S., including five in Maine, that Quorum runs. (Maine’s other Quorum-administered hospitals are Calais Regional Hospital, Cary Medical Center in Caribou, Millinocket Regional Hospital and Penobscot Valley Hospital in Lincoln.)

The next year saw a number of changes at DECH. With the support of the board, also under new leadership, Dodwell guided the formation of a new parent corporation, Down East Health System, with the hospital, a nursing home and a fundraising company as its subsidiaries and himself as the CEO. To stabilize the hospital’s finances, Dodwell restructured and streamlined staffing and renegotiated contracts with private physician groups and other outside vendors.

The hospital also developed a long-term plan to upgrade its facilities and prepare for expansion, implemented a substance abuse program and opened a women’s health center. DECH closed out 2003 with a 2.2 percent profit of $486,000.

In 2004, DECH purchased the state’s second digital mammography unit at a cost of $500,000 – “because second-best wasn’t good enough for breast health care,” Dodwell said. A helicopter pad was built to facilitate emergency transfers of critically ill or injured patients to larger hospitals. Physician and nursing “leadership teams” were established to improve patient care and compliance with national standards. 2004 ended with the Joint Commission’s accreditation, Medicare approval and a $122,982 operating loss, which Dodwell chalked up to the hospital’s many investments.

The hospital’s “revitalization initiative” continued in 2005, with the medical staff unanimously approving converting the hospital to “critical access” status, which they had rejected in 2001. The federal designation limits to 25 the number of acute care beds a hospital may offer, caps average length of stay at four days and, in return, offers increased payments from Medicare and Medicaid. Conversion to critical access status, while always contentious, has allowed more than a dozen small community hospitals in Maine to keep their doors open. At DECH, a 6.1 percent operating gain of $1.6 million marked the end of 2005.

So far in 2006, DECH has invested in several new technologies, including digital radiology and ultrasound as well as a nuclear medicine program for treating cancer patients. Clinical capabilities have been expanded in satellite clinics in Milbridge and Pleasant Point. Eight new physicians have come on board as hospital employees, and more than $60,000 has been pledged to community programs, including $30,000 for the science lab at Washington Academy in East Machias and $15,000 to support a women’s health library in Milbridge.

Despite a projected outlay of nearly $1 million in uncompensated charity care to low-income patients, DECH anticipates closing 2006 with a comfortable operating gain of $1.5 million, or 7.8 percent.

Responding to some of the specific allegations made by critics, Dodwell said all physician contracts have been reviewed by third-party consultants for legality, fairness and conformity with industry standards. Only a fraction of patient transfers to other hospitals have been due to inadequate staffing, he said; the vast majority have needed treatment not available at DECH such as risky cardiac procedures, psychiatric care or advanced neurological care. “It’s really a nonissue,” he said.

Mary Mayhew, vice president of government affairs at the Maine Hospital Association, said recently that DECH has made “a very positive turnaround” and is now in a much better position to provide high-quality health care to the community it serves. While the association is aware that the process of restructuring the hospital has been tumultuous, Mayhew said, “It’s inevitable that some people will be unhappy.”

A chronicle of discontent

“The progress we’ve made … has been nothing short of remarkable” in terms of patient care, community support and fiscal stabilization, said DECH board chairman John Driscoll. Driscoll is a retired lawyer who has served for six years on the board, the last three as chairman.

The current discord in the community, he said, is “very sad” given the effort that has gone into the hospital’s resurrection. He has followed the debate in the local papers, but says he doesn’t fully understand the critics’ objections and doesn’t trust their motives.

“They’ve made no effort to talk to us,” he said.

The critics say otherwise. Some were not willing to speak on the record for fear of unspecified retribution or creating further tension in the small-town health care environment. But several area physicians whose access to the hospital has been sharply curtailed indicated that recent proposals to meet with the board and the CEO have been met with no response.

“Local physicians feel frozen out” of the health care facility where they once had a strong presence, said one. Others said some patients are so distressed by the upset at the hospital that they are choosing to seek treatment at facilities in other communities.

At the Maine State Nurses Association, which represents nurses and other health care workers in unionized environments such as DECH, program director Steve Leavitt said the situation at DECH is “a mess.” Nurses have lost confidence in the hospital, he said, and the community spirit so essential to small hospitals has been replaced by an impersonal corporate environment.

Though many small Maine hospitals have had to downsize and reorganize in order to stay open, Leavitt said no other has experienced the level of disruption and dissatisfaction that persists in Machias.

Nurse Bart Brizee lives in Machias and worked for 13 years in the operating room at DECH. He left two years ago to work 60 miles away at Maine Coast Memorial Hospital in Ellsworth, where, he said, 19 of his DECH co-workers have found employment in the past 21/2 years. Nurses, department managers, lab technicians and others have left the Machias hospital in response to “belt-tightening” processes that made working conditions difficult to tolerate, Brizee said. Others lost their jobs in an environment where “any excuse to discharge an employee was a good excuse.”

To be fair, Brizee said, many of the changes at DECH were essential to the survival of the hospital.

“But it was the manner in which they were carried out,” he said. “It was unpleasant for everyone, probably even for the management.”

Brizee said many of the health care professionals now employed by Maine Coast would prefer to work in their own community at the hospital where many of them have spent their careers and have personal associations. But until administrative issues are settled, he said, he and many others will continue making the long commute to Ellsworth.

As to larger issues of hospital administration, Brizee said the hospital board has been too willing to rubber-stamp Dodwell’s initiatives.

“The board members are all nice people and very knowledgeable in their own businesses,” he said. “But when it comes to the complexity of running a modern hospital in the United States, this board isn’t able to ask the right questions.”

Michal Galazka, who owns and manages a nonprofit hospice program in Machias, said there’s no question that Dodwell has improved the hospital’s financial standing. But he faults the administrator’s heavy-handedness and self-interest.

A relative newcomer to Maine, but with international experience in health care management and consulting, Galazka observed that small hospitals play important roles in the communities they serve. In addition to dispensing essential medical care, they often are a town’s major employer, its social and cultural hub, an asset when recruiting new development, and an indicator of the community’s commitment to its residents. Part of the reason he moved his business from Connecticut to Machiasport in 2001 was the presence of a locally governed community hospital, he said. Now he questions the facility’s ability to serve its mission.

“With a strong board, [Dodwell] could have been effective and successful,” Galazka said. “But he has centralized power in himself, and the board has let him.”

Erin Flannery, an outspoken critic and one of the nurses who no longer work at DECH, said Tuesday that the group of concerned residents plans to contact the Down East Health System corporators, a group of about 60 community members empowered to name hospital board members, and present them with the petition. With 1,084 signatures, Flannery said, the petition should serve as a powerful statement of the community’s loss of trust in the hospital.

Board chairman Driscoll said he doesn’t know how the turmoil in Machias will be resolved. He’s not inclined to hold a public forum where community members can air their views. Such meetings during the hospital’s ill-fated initial effort to restructure in 2001 rapidly turned into “shouting matches,” he said, and did little to resolve the dispute.

Driscoll said the board, too, is targeting the hospital’s corporators, meeting in small groups to reassure them that all is well. “We want to be sure the corporators know what a top-flight hospital we’re running here,” he said. “I don’t know that we can do more than that.”