What is going on at Northern Light Health?

Instability caused by the pandemic continues to force one of Maine’s largest health care providers to scale back or cut services — and there are likely more “painful” changes on the horizon.

Northern Light Health has been clawing out of a financial deficit inflicted by the pandemic that crippled major health care networks across the country. Those financial losses came in tandem with sizable staffing shortages and supply chain disruptions.

By the end of fiscal year 2023, the system’s operating loss sat at $36 million, which was a sizable improvement from the previous year’s nearly $132 million shortfall, according to Suzanne Spruce, a spokesperson for Northern Light Health.

Those losses appear to be worsening in fiscal year 2024, as an unaudited financial statement shows the system had a more than $60 million deficit by the end of the second quarter.

Gregory LaFrancois, president of Northern Light Eastern Maine Medical Center, conveyed this instability in an email to employees last month when he said the hospital is “headed into very choppy waters.”

“There have been many industry-wide impacts that have hurt EMMC,” he said in an email that was shared with the Bangor Daily News. “Government programs have been cut, expansion of Medicare Advantage reduced reimbursement, our costs increased, and many other headwinds have kicked up.”

To compensate for this, LaFrancois said the hospital is looking at how it spends money and finding ways to provide services “at a cost we can afford.”

In the wake of the pandemic, Northern Light Health is experiencing turmoil like never before. While decisions to scale back and close services help the system stay afloat, they also raise questions about its future and whether patients will be able to get medical care quickly and locally, especially in rural areas with limited options.

In just the last few weeks, the health care system has made a series of changes from limiting hours to closing practices altogether.

In June, Northern Light shortened the hours of its Walk-In Care clinic on Union Street in Bangor to compensate for staffing shortages. The clinic is now closed all day on Tuesdays, Wednesdays and Thursdays. It was previously closed on Wednesdays only.

Last month, Northern Light Hearing Care in Bangor sent a letter to audiology patients stating that the practice will close on Aug. 9 because Dr. Renee McDowell was going to leave the system and a replacement couldn’t be found.

The system also recently changed how it offers ambulance service to seven Penobscot County towns. Northern Light will charge the towns a yearly fee of $17 a resident for ambulance coverage rather than the system paying the towns to provide emergency medical services before a Northern Light ambulance arrives.

And next month, Northern Light will close its Dexter Internal Medicine facility because the office “no longer meets our standards for a patient care facility” and the various upgrades it needs would likely cost hundreds of thousands of dollars, Spruce said.

The closure comes about five months after Northern Light announced it will close its clinic in Southwest Harbor and a year after Northern Light shuttered an Orono primary care practice .

Though all those changes were “tough choices” made with the intention of saving money or adapting to a smaller workforce, Spruce said they likely aren’t the last changes the health care provider will need to make.

“I am sure there are going to be things coming that are painful that we at Northern Light Health don’t want to do,” Spruce said. “There have to be in order to close some of these gaps and reduce some of the costs that are problematic for us, like the high temporary labor cost.”

Many providers left health care altogether due to burnout or early retirement during the pandemic, and new doctors and nurses aren’t graduating fast enough to fill the gaps, Spruce said.

Between 2021 and 2023, Northern Light Health’s workforce shrank by more than 1,500 employees, according to the system’s annual reports.

Though Northern Light has built relationships with local higher education systems to recruit new graduates and hired people from around the world, including Nigeria, India and the Philippines, the system has had to bring in travel nurses and physicians to care for patients.

Northern Light Health is spending more than $180 million annually on travel providers, an increase of $100 million since 2019, according to Spruce.

“That’s the kind of money we would be putting into aging clinics, outdated infrastructure and buildings that are no longer suitable to deliver care,” Spruce said. “Instead, we’re having to close because you have to make choices about where you spend your dollars. Nobody wants to pull out of a clinic in any small town.”

Additionally, while hospitals were reimbursed for the care they delivered during the pandemic, that government funding has since dried up. In 2022, hospitals received 82 cents for every dollar they spent caring for Medicare patients, the American Hospital Association found .

Sixty-six percent of the services at Northern Light Health are provided to Medicare and Medicaid patients, Spruce said.

“People think hospitals are making money because care is expensive, but that’s not true,” Spruce said.

Nancy Kane, a professor of health policy and management at Harvard University who has evaluated financial statements from Maine health care systems, said Northern Light isn’t alone in making tough choices to recover from the financial damage from canceled elective surgeries, labor shortages and supply chain disruptions.

After analyzing Northern Light’s financial statements from the last few years, Kane said the system’s current plan isn’t sustainable and changes must be made in order to cut its losses.

Kane recommended Northern Light share its long-term recovery plan with the public so patients are informed if those changes limit their ability to receive care.

“I can say definitively they need to do something, because what they’ve been doing is not sustainable,” Kane said. “I think they need to say here’s where we want to be in five years, here’s what we have to do to get there and we want you to understand.”