A large organization such as EMMC must always plan ahead using past year data, current financial realities, and future estimates. However, healthcare is in a state of rapid change and EMMC must adapt to these changes. Recent financial analysis shows that EMMC is currently under target from its estimated June 2011 year-to-date budget. In addition to our current realities, MaineCare and Medicare have significantly reduced reimbursement rates and will continue to do so for the foreseeable future.
Although many issues were expected, others could not have been predicted. EMMC is continuing to take steps to “course correct” by reducing costs, streamlining services, and selectively growing to meet community needs. Our efforts to reduce cost will include workforce reductions, some management restructuring, departmental consolidations, and supply cost reduction work. Our goal is to make changes that will allow us to maintain our current level of patient care quality and service.
We will continue to provide the same high quality and safe care as we have in the past. We will continue to be an employer of choice in the state of Maine by remaining competitive in wages and benefits for employees.
The ongoing challenge to find efficiencies is not driven by internal forces but rather by events on a national scale. The changes we will see are not decisions made lightly, but with much consideration. The community is counting on leadership at EMMC to preserve local healthcare services for the good and the future of this people of the region.
Your voice can help make a difference. The government is telling us what it can afford to pay for healthcare and challenging hospitals to be creative, reinvent our processes, and find better ways to serve our patients in a less costly way. Please advocate for hospitals like EMMC at http://emmc.org/advocacy.aspx.
The Financial Realities of Healthcare in Maine
Eastern Maine Medical Center is the only specialty referral medical center in the northern two thirds of Maine. That means we are the only hospital in the region to offer many highly specialized services. These specialty medical and surgical services require more expertise on the part of physicians and other direct caregivers, as well as special medications, facilities, and equipment. For example, the expertise and tools required to perform heart valve or brain surgery are highly specialized and too costly to offer in community hospitals without enough patients to justify the expense. In other parts of the country, hospitals within blocks of each other all offer this same technology because there are so many patients who need the service. In Maine, however, our population is spread very thin; EMMC has become the single provider in our region for most of these specialties and bears the cost of offering them to the patients from Waterville to the northern border.
EMMC is a half a billion dollar organization. In other words it costs about $500 million a year to operate the region's referral medical center. Advanced Surgical Care of Maine must support robotic technology, a computer assisted brain lab for neurosurgery, and highly specialized boom-mounted orthopedic equipment. The region’s patients count on our Trauma Center of Maine, CancerCare of Maine, Heart Center, Emergency Services, and many others to be there when they need it most. That means access to expert physicians, trained nurses, special supplies and instruments, therapists, pharmacists, medications, etc. —significant and unique investments in the medical infrastructure of our region. Administrative dollars maintain our campuses from housekeeping, to engineering, to grounds upkeep. Those dollars also manage the flow of thousands of patients through our inpatient and outpatient services from registration to billing. In addition, EMMC serves as a support and resource to many other hospitals in the region, providing consultation and many virtual services throughout the vast region of northern and eastern Maine, including tele-medicine, critical care support and transport, electronic medical imaging, and pharmacy support among others. Those dollars help keep care as close to home as possible.
Medicare and MaineCare
Medicare and MaineCare (Maine Medicaid) are governmental insurance plans that make up about 60% of EMMC's "payer mix." That means the other 40% of our payer mix is comprised of other commercial insurance payers, and self-pay patients. Governmental insurers do not pay hospitals the full cost of caring for their insured customers, setting up the need for a complex system of cost shifting for hospitals to meet their expenses. EMMC's unusually high mix of governmental payers is caused by the demographic make-up of our patient population in the region: a larger percentage of elderly patients, a higher percentage of lower income residents, and the rural nature of our region.
Our challenge for many years has been to find ways to provide critical services to the region with an affordable cost structure. We continue to work hard to balance our service offerings with the costs required to support those services. Our goal is to be responsive to the needs of the patients of the region, offering high quality, safe, specialty patient care with maximum efficiency at the most affordable price possible. This is a goal we pursue continually and with great determination. In times like these, it is even more critical that we provide services that are as affordable as possible and we are stepping up.
In addition to the historic practice of reimbursing hospitals less than the cost of care for MaineCare patients, hospitals in Maine are now bearing the significant burden of millions of dollars in unpaid MaineCare, or Medicaid reimbursements for care delivered from 2007 through the present. The shortfall is caused by increased eligibility and enrollment in MaineCare. While eligible Maine residents have taken advantage of this expansion and signed up for MaineCare, there is not enough money in the state budget to pay for the care they are receiving. Currently, the state of Maine owes EMMC approximately $58 million for patients who received care but were not paid for. This amount gorws by approximately $20 million annually. The state's plan, as originally conceived, was supposed to decrease bad debt for hospitals by increasing the eligibility for MaineCare coverage to more Mainers, but there was no commensurate increase in the state's budget for the program. To make matters worse, EMMC has not seen the expected reduction in bad debt in the years since the plan was implemented.
The language of healthcare is complicated. Healthcare leaders navigate a landscape where priorities compete and sometimes contradict each other. We consider regulations, ethical imperatives, laws, and realities as we plan for the survival of the critical systems that touch patients each day. Hospital leaders are responsible for preserving, above all else, the values and ethical imperatives of an organization that holds people’s lives in its hands and readily serves both those who can pay for care and those who can not.
Administrators at EMMC provide the platform from which the doctors and nurses do their life saving and life improving work. Running a $500 million organization is a complex proposition. Administrators manage the detailed information needed to sustain hundreds of licenses, certifications, memberships, and accreditations. They develop and track protocols and outcomes that drive quality and safety, they send bills and pay bills, and they interpret and apply the countless federal and state laws, regulations, and guidelines. They hire, develop, and reward a workforce of 3500 people and they manage patient feedback, and respond to both compliments and complaints. They are responsible for safety and security of facilities at more than a dozen locations and of vast amounts of confidential patient information.
EMMC executive leadership bears the responsibility for managing the varied functions that ensure the smooth delivery of patient care. Executive compensation accounts for less than one percent (.9%) of total wages at EMMC. In other words, more than 99 percent of wage and compensation paid at EMMC goes to non-executive employees. Of total operating expenses, a half a percent (0.5%) represents the pay of the 10 people who lead the organization.
In order to attract and keep the best healthcare minds working for the people of Maine, EMMC is proud to offer a conservative and competitive package of pay and benefits for all employees. The community members who serve as EMMC’s Board of Trustees oversee regular executive compensation surveys of the region and the nation and make sure EMMC remains conservative but in line with what these executives would earn in other parts of New England and the US. That philosophy of attracting and keeping the best in healthcare is the guiding force behind our ability to offer the patients of this region the reliable, high quality care that they expect.
IRS Form 990 is the federal tax return of organizations exempt from income tax. It is submitted by all tax-exempt organizations and non-profits to provide the Internal Revenue Service with annual financial information, as-well-as information on the organization's mission, vision, programs, community benefit, and finances.
View the EMMC and EMMC Auxiliary 990 Financial Information forms