BREWER, Maine — Northern Light Health, one of the largest primary health care providers in Maine, is facing substantial financial struggles.
The company, which operates hospitals from southern Maine to Aroostook County and employs around 10,000 people, is expected to lose $100 million this year and is currently in $620 million of debt.
These financial challenges are driven by rising inflation, labor shortages, and low reimbursement rates from Medicare and MaineCare, according to Northern Light Health Chief Financial Officer James Rohrbaugh.
"Unfortunately, in rural settings in this country, health care since the pandemic has had a lot of financial pressure on it," Rohrbaugh said.
According to Rohrbaugh, with Medicare and MaineCare reimbursements, there’s a $300 million difference yearly between what it costs to care for patients and what Northern Light is paid.
"It’s challenging," Rohrbaugh said. "At Northern Light Health, 66 percent of our patients are MaineCare or Medicare."
With Northern Light’s financial losses increasing, many are concerned about the direction the health care provider is going.
"It’s heartbreaking to see, it really is," Kathy Day, a former Northern Light Eastern Maine Medical Center nurse, said. "They need to start involving the community more in some of the decisions that are made and trying their darndest to recruit locally."
To address labor shortages, Northern Light is partnering with colleges and other organizations to bring more nurses into the workforce and is hoping to expand those programs.
Rohrbaugh said they are also seeking to lower administrative expenses to focus on patient care. This includes recently eliminating two executive positions.
"We are gonna keep working at the things that we can do to improve the quality of health care," he added.
Another strategy of Northern Light is sharing resources across the health care system and forming partnerships.
The organization recently announced a partnership with Compass One, which will manage food and environmental services across its hospitals.
"That can bring a lower cost to a service, higher quality or efficiency around services that they provide," Rohrbaugh said.
When it comes to reimbursement rates for MaineCare, the State Legislature has been able to increase these rates, with Northern Light expecting to see a $17 million improvement next year.
State Sen. Joe Baldacci, D-Bangor, said the Legislature should do more to fund health care.
"This is a problem that's happening to hospitals around the state that we need to fix, because we need to have a stable health care system," Baldacci said.
Rohrbaugh said Northern Light Health is committed to adapting to the health care needs of Maine communities.
"These are our hospitals, this is our community, so it’s critically important that we make sure we’re doing everything possible to make sure that we’re successful and sustainable for the future," he said.
Rohrbaugh added that he is excited to continue working through these challenges and is looking and collaborating with state and federal government leaders to find solutions.