Down East Hospital remains independent and in the black

MACHIAS — In an age of hospital consolidation, Down East Community Hospital is going it alone.

“We don’t want to be part of a larger system right now,” hospital CEO Steve Lail said Monday.

For three years, the small, rural hospital has had a strategic affiliation agreement with Northern Light Health System. This allowed the 25-bed acute care hospital in Machias to have a full assessment done of its human resources department and to get “significant” assistance with information technology, said Julie Hixon, director of marketing and communications.

“Since our strategic plan does not include becoming part of a larger health system anytime soon, and because we don’t have a need for those services, we decided not to renew our strategic affiliation agreement,” Hixon said.

The agreement’s three-year term gave hospital leaders a chance to consider whether they wanted to become “more deeply” affiliated, Lail said.

“We feel like we’re in a good position and didn’t want to pursue it further,” he said.

Remaining independent has certain advantages. For one thing, hospital leadership can make decisions without having to wait for corporate approval, Lail said. The community also values its independence.

“Washington County is very independent and people like to make their own decisions … and keep those decisions local,” Lail said.

Although Washington County is the hospital’s core service area, many of its patients live in eastern Hancock County towns such as Gouldsboro, Sullivan and Franklin.

The hospital has operated in the black since 2016 when, according to the annual report, it realized a net profit of $706,915. Total revenues were reported to be $41,572,152 with expenses at $40,865,237. In 2017, net revenue was $45,475,918 with total expenses being $45,039,648 for a net profit of $436,270, according to the annual report.

Revenue and expense figures for 2018 were not available. However, Hixon said the hospital’s 305 employees received combined pay of almost $20 million in 2018 plus another $4.88 million worth of benefits.

This year, the hospital experienced a first quarter loss of about $27,000 due in part to unpredictable weather, but Lail said this is not cause for concern.

“The first quarter is always rough,” he said.

Lail said the key to success at a rural hospital is to offer a wide range of services. The hospital does frequently refer cardiac patients to other facilities as it does with any unusually complex case. But, the hospital can handle just about anything else.

Its physicians include three orthopedic surgeons, a pain management specialist, two ob/gyn practitioners and two ear, nose and throat specialists. It also is affiliated with the Milbridge Medical Center in Milbridge and the Arnold Memorial Medical Center in Jonesport.

With the closing of the ob/gyn department at the Calais Regional Hospital in 2017, Down East Community has become the only hospital in Washington County fully equipped to deliver babies.

The hospital is strategic in its fundraising efforts.

“We don’t do it often and we make sure the community is behind us,” Hixon said.

In order to be successful, fundraising programs have to be of value to the community, Lail said. The community valued a recent emergency department renovation and expansion project enough that the hospital was able to raise more than $1.5 million for the project in 2016. The updated department, also funded by a $4 million USDA rural development loan, opened in 2017.

In December 2017, the hospital was named a top rural hospital by The Leapfrog Group, an independent hospital watchdog organization. Selection is based on the group’s annual hospital survey, which measures hospital performance in several areas.

Hixon said Down East Community Hospital patients tend to seek treatment for serious issues, not minor ones.

“The people [who] come here come here when they’re really, really sick,” Hixon said. “If they’re able to get out of bed in the morning, they’re able to go to work, in their minds.”

Hixon also cites what she calls “Downeast ingenuity” with the hospital’s success.

“We’ve had to do a lot more with a lot less,” Hixon said. “So we find ways around it.”


Johanna S. Billings

Reporter at The Ellsworth American
News Reporter Johanna S. Billings covers eastern Hancock County and western Washington County. An avid photographer, she lives in Steuben with her husband and several cats. She welcomes tips and story ideas. Email her at [email protected]

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