Pen Bay Healthcare has laid off 15 employees, reduced hours for 20 more workers, and eliminated vacant positions in an effort to deal with the lingering national recession.

The Pen Bay Healthcare Board of Trustees adopted a $139 million budget for 2010-2011 at its March 22 meeting. The budget covers the period from April 1, 2010 through March 31, 2011.

“This budget reflects the reality that organizations like Pen Bay are facing due to the continued impact of the national recession on health care,” said Pen Bay Healthcare President and Chief Executive Officer Roy Hitchings.

The health care network’s budget assumes a $3 million reduction in revenues compared with the current fiscal year that ends next week. In addition, free care and bad debt are projected to increase to $6 million in the 2010-2011 budget.

Pen Bay Healthcare is the parent corporation of Penobscot Bay Medical Center in Rockport, Quarry Hill in Camden, Kno-Wal-Lin Home Care and Hospice, the Knox Center for Long Term Care in Rockland, and about half the physician offices in the region.

“Hospitals all over the state and nation are having similar experiences and are not alone in their financial challenges; schools and most businesses right here in Knox County are affected,” Hitchings said.

“These changes are stressful, and they go well beyond numbers on a page,” Hitchings said. “They touch our colleagues, co-workers, families and friends. This is why the Pen Bay Healthcare leadership team worked so tirelessly to ensure job cuts affected the fewest possible number of people.”

The cuts were needed to maintain vital clinical programs, he said.

The cuts include:

  • Fifteen people were laid off.
  • Four jobs were eliminated but those employees were placed in vacant positions for which they were qualified.
  • Seven vacant positions were eliminated.
  • Three employees retired and will not be replaced.
  • One management employee resigned and that position will not be replaced.
  • Twenty people will experience a reduction in work hours with eight of those volunteering for the reduced hours.
Pen Bay Healthcare is also continuing the wage freeze imposed last year and is reducing some benefits.
The areas where jobs were cut include the medical/surgery department, clinical applications support, the laboratory, radiology, employee health, utilization review, dietary, patient accounts, the physical plant, materials management, the childcare center, orthopedics, surgical practices, neurology, urology, pediatrics, family medicine, Kno-Wal-Lin Home Care and Hospice, human resources, and information technology. Hitchings said cuts were made at all levels, from senior leaders to management and staff.
In addition to the cuts, there is a 4 percent increase in hospital charges to patients. Such an increase is generally paid by people who pay their own bills since insurance companies negotiate rates with hospitals.
The hospital is working with employees to see if there are other positions within Pen Bay Healthcare that they could fill. Those who will not have a job are being offered severance packages and outplacement services.
“We believe we have a realistic budget which will allow us to fulfill our mission to provide excellent care for our patients,” Hitchings said.
Of the overall Pen Bay Healthcare budget of $139 million, $85 million is for Penobscot Bay Medical Center, $24 million is for Pen Bay Physicians and Associates, which manages the doctors’ offices, $10 million is for Quarry Hill, $8 million is for Kno-Wal-Lin Home Care and Hospice, and $7 million is for the Knox Center for Long-Term Care.
Pen Bay Healthcare has about 1,500 employees.