WATERVILLE — Inland Hospital is laying off 10 employees and closing its Walmart clinic as part of a budget reduction effort, hospital president John Dalton said Thursday.

The hospital eliminated 28 positions, but 18 of them were either vacant or restructured, he said.

Dalton said the job losses were because of national trends of decreased revenue from health insurance providers and fewer patients staying overnight. The combination hit the small hospital of about 600 employees hard, he said.

Hospital spokeswoman Sara Dyer said that the measures were necessary in order to present a strong budget for upcoming years.

“We want to be financially stable because we’re committed to Waterville for the long term,” she said.

The hospital is owed $12 million by the state for Medicaid reimbursements, but that did not impact the budget decisions, she said.

“It creates a cash constraint for us on an everyday basis, but it wasn’t a factor in coming up with the budget for 2013,” she said.

Dalton said that the decision to cut staff was a difficult one, and the approach to the layoffs included “being as respectful as possible of the dignity of the individuals who are impacted and by being as transparent as we can.”

He said the vast majority of hospital employees live within its service area, which is centered in Waterville and extends to the surrounding communities.

Dalton would not comment on the specific positions that have been eliminated or the nature of the agreements with the employees, but he said that the hospital, which is part of Eastern Maine Health Care, had adhered to an established policy for reductions in the workforce.

“We are sad to tell people that they no longer work here,” he said.

The hospital’s Walmart clinic is scheduled to close Saturday, Sept. 29, Dalton said.

The clinic, originally conceived of as a way to reach people who might not seek medical care, has not fulfilled that function, he said.

“What we’ve found is that the vast majority of patients there have insurance and are people who already have a relationship with us,” Dalton said. “We believe that we offer our patients enough options so that they can access medical services when they need them without going to expensive emergency rooms.”

The hospital’s scaled-back budget also includes unrelated cost savings of roughly $1 million, which was achieved by a variety of factors, including more favorable purchasing contracts and less discretionary equipment

“We live in incredibly tumultuous times for health care,” Dalton said. “The whole way that we do business is changing. What we’re being rewarded for, what we’re being penalized for. Small hospitals like us are, in a sense, always fragile. Any bump in the road can have consequences.”

He added that being a part of the Eastern Maine Health Care system has helped to maintain stability.

The process of scrutinizing the budget began in June, and the board of trustees approved the budget in August. The hospital’s fiscal year begins in October.

Dalton said that, as the hospital looked for ways to save money in the budget, the primary goal was to maintain the level of patient care.

“When we look at situations like this, you put the patient first. I am satisfied that we will deliver the same level of service,” he said.

Dalton would not completely rule out further layoffs during the upcoming year, but said that no more are called for in the budget.

Inland operates a 48-bed hospital and a 105-bed nursing home in Waterville, as well as 18 physician offices in Waterville and five surrounding communities. Hospital services include acute and critical care inpatient units, birthing, radiology, family practice and general surgery, among many others.

Dalton said that future budgets can’t be predicted but are likely to be impacted by the economy, Maine’s aging population and continued changes to the health care system.

Matt Hongoltz-Hetling — 861-9287

mhhetling@centralmaine.com