Calais Regional Hospital cuts 10% of its workforce as financial woes deepen
Courtesy / Calais Regional Hospital
Calais Regional Hospital is eliminating roughly 20 jobs this week, partly as a result of current economic crisis.
Calais Regional Hospital is cutting its workforce by 10% as the coronavirus crisis aggravates the hospital’s shaky financial position.
The 25-bed critical-access facility, which is seeking Chapter 11 bankruptcy protection, will eliminate roughly 20 jobs through layoffs and attrition, effective Friday, a spokeswoman told Mainebiz.
Vice President of Community Relations DeeDee Travis said the pandemic has made the hospital’s bad situation worse — and that federal relief funding has been of little help.
“Like most hospitals across the state and nation, CRH has seen a drastic decline in patient visits with the COVID-19 crisis. This has caused a massive reduction in our revenue stream, which was already tenuous,” she said by email Wednesday.
“As much as we hoped to avoid layoffs and service closures, we must take immediate action. The long-term ramifications of the COVID-19 revenue loss on top of the bankruptcy filing and limited access to CARES Act relief funds have left us with no choice.”
Employees were notified of the cuts earlier this week and are being assisted with separation benefits, she said.
The hospital, with over 200 workers the largest employer in the Washington County city of 3,100, reported debt of $25 million at the end 2018. In September, CRH said it was seeking Chapter 11 debt restructuring due to losses from decreased utilization, the high levels of free care it provides, inadequate reimbursement from insurers and the cost of adapting to new regulations. The case is currently before federal bankruptcy court in Bangor.
The case has also prevented CRH from receiving a loan to help alleviate its financial problems, the hospital claims.
CRH has received some funding through the federal Coronavirus Relief, Aid and Economic Security (CARES) Act, Travis said. But when applying earlier this month for a loan through the Paycheck Protection Program, part of the CARES stimulus package, the hospital was turned down.
In a complaint filed last Friday with the court, CRH said the U.S. Small Business Administration rejected the loan application because of the hospital’s Chapter 11 status — even though “the CARES Act does not prohibit extending funds under PPP to a Chapter 11 debtor.”
According to Travis, the exclusion of CRH from the forgivable loans offered through the program “has great potential to be detrimental to the hospital’s long-term survival.”
“The funding [already] received is appreciated and needed, however it is merely a few stepping stones toward the ultimate goal of financially surviving the pandemic — not the bridge we, and our community, desperately required.”
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