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PORTLAND — Maine Medical Center on Tuesday afternoon announced a slate of personnel and payroll cuts, including the elimination of 175 positions, layoffs of 50 employees and 12.5 percent reductions in compensation for top hospital administrators.
“This is a difficult day that is unfortunate, but necessary for creating the future that our patients and employees want and deserve,” Maine Medical Center President and CEO Richard Petersen said in a prepared statement. “We firmly believe that by making tough choices today, we are positioning ourselves for sustainability. As we’ve said all along, layoffs were our last resort, but they were unfortunately necessary in setting up the organization for future success.”
According to a hospital announcement, the institution faced a late fiscal year 2013 budget gap triggered by reductions in payments from the government and commercial payers, as well as an increase in care for patients who cannot afford to pay, among other factors.
That financial shortfall reached approximately $15 million for the fiscal year that runs from Oct. 1, 2012, to Sept. 30 of this year, according to an internal hospital memo provided by the institution in June.
In addition to the layoffs, compensation cuts for administrators and elimination of vacant positions, the hospital announced Tuesday that more than 120 employees took advantage of an early retirement package that was offered last month. Those 120 came from a group of 374 who were eligible for the package, the institution announcement stated.
In May, Maine Medical Center announced a hiring and travel freeze in an attempt to control the emerging budget crisis.
News of personnel reductions at the hospital comes as the institution is promoting $40 million renovation plans, which include the addition of five new operating rooms.
Maine Medical Center, with 606 beds, is Maine’s largest hospital.
BDN Health Editor Jackie Farwell contributed to this report.