Northern Light Mercy Hospital in Portland is the second-largest hospital in the Northern Light Health network, which has had to cut costs in other parts of the state. Gregory Rec/Staff Photographer

Maine’s hospitals face considerable financial challenges in the next few years – much of it related to continued workforce shortages, hospital officials said.

Northern Light Health, the second-largest system in the state, is among those facing the strongest economic headwinds in Maine and has had to cut costs as a result.

James Rohrbaugh, senior vice president and chief financial officer at Northern Light Health, said that he expects the system will operate in a deficit in 2024, although it’s undetermined how large the deficit will be.

“We are having a period of rapid and unsettling change,” Rohrbaugh said. “We will continue to face significant pressure. We have to reinvent ourselves.”

Steven Michaud, president of the Maine Hospital Association, said that reliance on traveling nurses and doctors due to workforce shortages, plus labor costs increasing in general, has put hospitals across the state in a financial pinch.

“We came out of the pandemic with a lot of our problems exacerbated,” Michaud said. “It’s pretty bleak.”

Maine’s health care practitioner workforce – including doctors, nurse practitioners, nurses and other health professions – has declined from 42,390 in 2019 to 40,670 in 2023, according to federal labor statistics. Meanwhile, demand for services is growing.

In part to address growing financial issues, the Legislature and Gov. Janet Mills this year passed a $60 million statewide boost in federal and state tax dollars going to Maine’s hospitals, achieved by reforming reimbursement rates.

Northern Light Health, which includes Northern Light Eastern Maine Medical Center in Bangor and Northern Light Mercy Hospital in Portland and eight other hospitals, had a $36 million deficit in 2023, after a $131 million deficit in 2022. Northern Light leaders did not have a projection for 2024’s deficit. Annual revenues are about $2 billion, according to the nonprofit system’s tax filings.

Recent cutbacks at Northern Light Health include closing its Dexter Internal Medicine office, and closing clinics in Orono and Southwest Harbor. Rohrbaugh and other Northern Light officials did not have additional announcements of closings or trimming services. Hospital officials did say they do not anticipate any cuts at Northern Light Mercy Hospital in Portland.

Michaud said Northern Light is facing more difficult financial challenges compared to some other health systems because it has more rural properties, including hospitals in Greenville, Presque Isle and Blue Hill.

“That’s a big disadvantage,” Michaud said. “Everything that is rural makes things more difficult, including recruiting and retaining doctors and nurses.”

MaineGeneral Medical Center in Augusta is expected to end the year with a deficit, although hospital officials are still determining how much that would be, said Joy McKenna, MaineGeneral’s spokeswoman.

“MaineGeneral, as with all hospitals in Maine, is working within a system of growing costs and reimbursement pressures,” McKenna said.

Meanwhile, at the state’s largest health care network, MaineHealth, which includes its flagship hospital Maine Medical Center in Portland, the financial picture for 2024 looks to be about break even. MaineHealth operated with a $45 million deficit in 2022 and an $18 million deficit in 2023. Annual revenues for MaineHealth are about $3.4 billion, according to nonprofit federal tax filings.

Dr. Andy Mueller, CEO of MaineHealth, said the financial challenges remain daunting, despite an expected break-even year in 2024. The goal is to have a 3% operating margin so that the system can make investments in improving technology and other system improvements.

“We’re still going to have a dramatic health care workforce shortage for the foreseeable future,” said Mueller, who noted that health care supply costs have also increased substantially. “We have experienced dramatic inflation and our reimbursements, particularly from government payors, have not kept up with the pace of inflation.”