In a memo to its employees last week, Maine Medical Center, part of the MaineHealth system, said it has suffered an operating loss of $13.4 million in the first half of its fiscal year. The rollout of MaineHealth's estimated $160 million electronic health record system, which has resulted in charge capture issues that are being fixed, was among several reasons Maine Med's CEO cited for the shortfall.

“Through March (six months of our fiscal year), Maine Medical Center experienced a negative financial position that it has not witnessed in recent memory,” Richard Petersen, president and CEO of the medical center, wrote in the memo to employees.  MedTech Media, publisher of Healthcare IT News and Healthcare Finance News, obtained a copy of the memo.

In order to bring the medical center to breakeven by year’s end, the health system’s leadership has determined $15 million needs to be saved.

In the memo, Petersen said the operating loss is due to declines in inpatient and outpatient volumes because of the hospital’s efforts to reduce readmissions and infections; “unintended financial consequences” due to the roll out of the health system’s Epic electronic health record and problems associated with being unable to accurately charge for services provided; an increase in free care and bad debt cases; and continued declining reimbursement from Medicare and MaineCare, the state’s Medicaid program.

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Many of the reasons for Maine Medical’s financial woes are similar to those hospitals across the country are facing.

A recovering national economy, continued budget restrictions and restraint and the realization that, while electronic health records may have efficiencies and cost savings over time, the costly transition to EHRs may take years to recoup.

In his memo to employees, Petersen said the hospital has identified many of the hiccups contributing to the charge capture problems and a team of hospital employees and Epic technicians are working to resolve those issues. In the meantime, the remaining roll out of the Epic EHR to the rest of the health system is on hold.

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To save $15 million by year’s end, Maine Medical is immediately instituting a number of cost-saving initiatives including selective travel and hiring freezes, putting the operating contingency budget on hold and reducing overtime. Petersen appealed to employees to curb discretionary spending and contact management with any cost-saving ideas.

“I’m confident that we’ll confront this test, beat back the issues we face, and reverse this negative financial picture,” Petersen wrote in the conclusion to the memo.

Maine Medical did not reply to an interview request by deadline. The Maine Hospital Association declined to comment for this story.