BLUE HILL – Officials at Blue Hill Memorial Hospital plan to expand services and improve infrastructure in an effort to boost their bottom line.

CEO Tim Garrity said BHMH needs to grow in order to counter some of the pressures Maine hospitals face and to provide the community with the care it needs. Most hospitals in Maine are seeking ways to cut operating expenses in what they consider a “hostile environment” for such institutions.

“We have a plan for significant growth,” he said recently. “We think we can grow our way out of this and provide more services so people will want to come here.”

The planned growth, which implements recommendations made by an advisory team last summer, will help to counter the financial pressures facing Blue Hill and the other 38 hospitals in the state, Garrity said. Much of that pressure comes from the state’s failure to make timely payments to hospitals under the MaineCare program, he said.

The state owes BHMH approximately $2.7 million in MaineCare payments, and that debt is growing at the rate of about $100,000 a month, Garrity said. When the hospital’s fiscal year ended in March 2007, the debt was $1.8 million.

“In the nine months of this [fiscal] year, that has increased to $2.7 million; that’s $900,000 in the first nine months of this year,” he said. “The state is simply not keeping pace with the costs due for the services we’re providing.”

The hospital has been forced to borrow money to cover those expenses and has paid interest totaling about $80,000 this fiscal year.

“That’s a serious issue,” he said. “You don’t have to look too much further than that to see why we’re struggling.”

Proposed cuts in funding on the state and federal levels could put additional pressure on BHMH and other hospitals throughout the state, although Garrity said he had not yet calculated the full impact such cuts would have locally.

Although the hospital will look at ways to reduce operating costs, the key focus of the hospital’s plan is on growth.

“We have to take a hard look at belt-tightening in order to operate more efficiently,” he said. “But we have no plans to close facilities or cut services. Our answer to these challenges is to grow.”

Ultimately, the plan should improve the hospital’s cash flow and offset some of the losses from the lagging state reimbursements.

The plan includes adding specialized services. The hospital already has purchased digital mammography technology and, between now and September, plans to add staff in orthopedics, urology, obstetrics-gynecology, colonoscopy and cardiac rehabilitation. According to Garrity, those additions not only will provide local services for the surrounding community, but also will improve cash flow, increasing the hospital’s income by hundreds of thousands of dollars annually.

In addition, the hospital plans to make infrastructure improvements, including at the Sussman Office Building. Some changes will be cosmetic, while others will involve upgrading equipment for inpatient care.

“We also plan to reinforce our commitment to primary care,” Garrity said.

Plans call for increasing the number of hours for registered nurses and adding a part-time medical director at each of the clinic sites in Bucksport, Castine, Blue Hill and Stonington. They also include renovations and improved medical equipment at some satellite sites.

One change at the Peninsula Primary Care clinics should increase significantly the cash flow to the hospital, Garrity said. The hospital has changed its Medicare designation, which will increase its reimbursements under that program, he said. In reviewing the large number of designations, officials determined the hospital qualified as a “provider-based clinic.”

“As a provider-based clinic, we will qualify for improved reimbursements that should improve our bottom line by $1.1 million,” he said.

That change is not expected to affect patients in those practices, he said.

The overall plan also includes some reductions, Garrity said. In the next nine months, the hospital plans to reduce overtime by about 80 percent and staffing by the equivalent of 8.2 full-time positions. Those reductions will be done through attrition and by relocating employees within the hospital and throughout Eastern Maine Health Systems.

“There have been no layoffs,” he said. “We’re going to eliminate positions as people move on, and offer them other positions within Blue Hill Memorial Hospital or EMHS. We want to make sure that everyone has a place to land.”

The overall plan will help the hospital improve its bottom line, but also provide necessary services to meet the changing needs of the community, Garrity said.

“We think this is the right approach to pull us through and the right one for the community,” he said.

rhewitt@bangordailynews.net

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