Northern Light Health announced Inland Hospital on Kennedy Memorial Drive in Waterville will close in June. The hospital has slowly rolled back its services in the last several months, consolidating and moving outpatient services in February. Rich Abrahamson/Morning Sentinel file

WATERVILLE — The loss of Northern Light Inland Hospital and its 309 workers is expected to have a big economic impact on the Waterville area, although local officials are hopeful those workers will find similar jobs in an industry with a critical labor shortage.

“When a hospital closes in a rural community it has a big impact, not only in terms of the economy, but also in the way Waterville and the Waterville area thinks of itself,” said Michael Donihue, economics professor at Colby College.

Northern Light Health announced Thursday that Inland and its associated Waterville offices and clinics will close June 11 because of high operational costs, low reimbursement rates and ongoing struggles recruiting and retaining staff. Northern Light Continuing Care, Lakewood, located next to the hospital on Kennedy Memorial Drive, is not included as part of the closure. The 36-acre campus will be sold, officials said.

Northern Light’s annual report shows total spending for all its hospitals in the state, but doesn’t give details for each. Donihue, emphasizing that he does not have Inland numbers, ran a simple impact analysis on what the economic impact would be with the closing of a hospital that has 300 employees and spends a conservative estimate of $30 million a year for supplies and other needs.

Once multiplied by the loss of people spending money for things such as rent and utilities, the economic hit to the state of Maine, concentrated in the Waterville area, would be about $165 million a year, Donihue said.

When MaineGeneral Health closed its inpatient hospital in Waterville several years ago and opened a hospital in Augusta, Inland was the only Waterville hospital with inpatient services. Inland became important to the city and its identity, according to Donihue. The loss will impact the way the city and region sees itself, he said.

Kimberly Lindlof, president and CEO of the Mid-Maine Chamber of Commerce, said people are understandably upset that Inland and its affiliate offices are closing, and the chamber will do everything it can to help.

“We’re hopeful that we’re able to transition those employees and patients to other healthcare organizations in the mid-Maine region,” Lindlof said Friday. “We know that healthcare needs are strong in the state of Maine and it makes up about 30% of our economy, so we stand ready to assist and hope that we can plug Inland’s medical staff into other jobs in the area.”

The loss of 309 Inland employees will be a challenge, according to Garvan Donegan, director of planning, innovation and economic development for the Central Maine Growth Council.

“These passionate healthcare professionals and medical teams — our community members, colleagues and friends — contribute significantly to the greater Waterville area and to the state of Maine, Donegan said Friday. “Their dedicated work in healing and public health, as well as their economic contributions through spending on groceries, dining, retail purchases and professional business services, are vital to our community and overall prosperity and well-being.”

WHAT HAPPENS NOW?

MaineGeneral officials are working with Northern Light to learn the scope of changes that will occur as part of Inland’s closure, including the number of staff and patients who will be impacted and how MaineGeneral may be able to take on certain staff and help meet the community needs, according to Joy McKenna, MaineGeneral’s director of marketing and communications.

The Inland closure compounds an already complicated, challenging financial situation at MaineGeneral which is similar to what other hospitals in Maine are facing, McKenna said Friday.

“Maine hospitals are in a precarious financial situation with the failure of the supplemental budget passing the Senate by 2/3 majority yesterday,” she said in an email. “We calculate the withholding of MaineCare funding has a budget impact of upwards of $30 million to our health system.”

MaineGeneral is committed to serving the people of the Kennebec Valley and assessing its own finances so it can maintain high-quality services, she said. Before the Inland closure was announced, MaineGeneral officials had been working with Northern Light to transition obstetrics services to MaineGeneral. That process has gone very well, and MaineGeneral was able to take on maternity patients who sought care, as well as some Inland staff to support those services, McKenna said.

With Inland’s closure, MaineGeneral expects to see a higher number of visits to its emergency departments at both Thayer Center for Health in Waterville and the Alfond Center for Health, MaineGeneral’s inpatient hospital in Augusta, McKenna said. She said officials will be assessing how to support that increase.

Nathan Howell, president and CEO of MaineGeneral Health, said in a news release Thursday that the loss of health care services in any community is deeply troubling and speaks to the critical juncture of health care delivery in Maine.

“The state’s nonprofit hospitals — including MaineGeneral — are struggling financially, and the underlying issues must be addressed now to preserve high-quality services our communities need and deserve,” Howell said.

He said the scope of Inland’s announcement is one that will require much more work to assess the impact and the loss of services in the area.

“We will be working to evaluate these changes and how we can best support our community, both in the short and long term, as we, too, are grappling with navigating the changes in the health care landscape both across the state and the nation. As the leading health care provider in the greater Kennebec Valley, we recognize the important role we play in the community.”

Donegan, of the Growth Council, based in Waterville, is optimistic that the decrease in spending by those who lose their jobs will be temporary as he thinks the majority will transition to other positions in the community.

“The healthcare sector is continuing to experience a critical labor shortage regionally, which mirrors trends across Maine and the nation,” he said. “These are often highly sought-after, well-compensated positions. We are confident that most, if not all, of these displaced healthcare professionals will quickly find new employment opportunities within the region’s robust healthcare network.”

Waterville and surrounding areas have several local, regional and major hospital facilities and medical practices that are actively hiring within the existing labor market and within a 30-mile radius, Donegan said.

“We anticipate high labor absorption rates for these medical-based positions, thereby mitigating both short- and long-term economic impacts and sustaining the foot traffic and retail sales activity essential to our local and regional downtowns and business community.”

Donegan said the Growth Council, Chamber of Commerce and Waterville community are committed to supporting those whose jobs are affected.

“Inland has been a vital part of Waterville for decades, and its closure represents a historical moment and a loss for our community,” he said.

Donihue, the Colby professor, acknowledged that one of the things people typically look for when considering moving to a community is the availability of healthcare. He said he thinks Waterville will fare better in that respect because of its diversified offerings, including colleges and arts and cultural centers.

Northern Light is a nonprofit that operates 10 hospitals in Maine, including Eastern Maine Medical Center in Bangor and Mercy Hospital in Portland. Founded in 1943, Inland has been part of Northern Light Health since 1998.

Northern Light ran a deficit of about $52 million during its 2022 fiscal year, the most recent year for which public data is available, and lost nearly $100 million the year before. Inland has been losing up to $1.5 million per month on operational costs, according to officials.

Northern Light announced last month that it was going to move several outpatient services in central Maine to its Inland Hospital campus. The move was made to reduce the number of leased properties and the cost of maintaining and operating multiple sites where services are provided, officials said at the time. In October, Northern Light announced that its then-president had resigned.