PORTLAND — Maine Medical Center plans to offer about 400 employees voluntary early-retirement buyouts, according to a memo obtained Friday by the Portland Press Herald.

In the letter to employees, Richard Petersen, president and CEO of Maine’s largest hospital, said “financial challenges” have led the hospital to look for ways to reduce “all labor and non-labor expenses” to “improve our financial stability moving forward.”

“We’re going to offer incentives for voluntary early retirements for about 400 people across Maine Medical Center. More information will be communicated about this program next week,” Petersen wrote.

Maine Med, which announced a hiring freeze this spring, has about 6,000 employees.

Petersen was not available for comment Friday afternoon, and a hospital spokesman said no further financial details were immediately forthcoming.

Matt Paul, the hospital’s director of communications and public affairs, said the retirement incentives will be offered “across all of Maine Medical Center” but he had no other specifics.


Maine Med has three campuses, in Portland and Scarborough.

Paul could not say whether the hospital has a target number for early retirements, or what the incentives will be. He said no one will be asked or pressured into taking the package.

Paul said it’s a humane way to trim costs. “It’s the right thing to do in this environment.”

He said the eligible employees have not yet been notified.

While Paul declined to discuss financial issues, hospital officials have said that Maine Med suffered a $13.4 million operating loss in the first half of its fiscal year that ended March 31.

Meanwhile, the hospital is proposing a $40 million expansion that would add operating rooms and about 50 staff positions at its Portland campus. The proposal is pending before the city.


The hospital’s 2010 federal tax form for nonprofits shows that Petersen earned about $974,000 in compensation and benefits.

William Caron Jr., president of MaineHealth, the parent company of Maine Medical Center, earned $1.1 million in compensation and benefits in 2011, according to an IRS Form 990 listed on the ProPublica website.

Petersen’s letter to employees referred to an increase in free care and the cost of bad debt, accounting for an estimated $15 million in expenses by the end of this fiscal year.

Al Sparrow, vice president and chief financial officer of Maine Medical Center, told the Press Herald recently that if the state had approved a plan to expand its Medicaid program under the Affordable Care Act, the cost of free care and bad debt would have declined substantially, and could have helped the hospital’s bottom line.

Gov. Paul LePage vetoed the expansion after lawmakers approved it, and the Legislature upheld the veto.

Legislators did approve a plan to pay the state’s hospitals what they were owed in unpaid Medicaid reimbursements, which for Maine Medical Center meant a reimbursement of $67 million.


Paul said that money merely pays off debts owed to hospitals, and doesn’t help Maine Medical Center’s future long-term finances.

“It’s not a shot in the arm,” Paul said. “It’s payback for what we were owed.”

The news of Maine Med’s early retirement offer follows an announcement by Eastern Maine Medical Center in Bangor that it will eliminate 17 laundry positions and outsource the work to a contractor.

Joe Lawlor can be reached at 791-6376 or at: [email protected] Twitter: @joelawlorph

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