Compounding the problem is the lack of available staffing, which drives up costs by forcing the system to use expensive, temporary contract workers and make investments in recruitment, Rohrbaugh said.<\/p>\n
In addition, Maine hospitals have been hamstrung by health care closures, including the loss<\/a>\u00a0of a fourth of the state\u2019s nursing homes in the last decade. A hospital doesn\u2019t get reimbursed for its labor and supplies when patients are stuck at the hospital because there are no long-term care facility beds available for them to be discharged to, Rohrbaugh said. <\/p>\n As a result, the health system has weathered a string of bad news. Since 2023, the system\u2019s debt has increased by $80 million; its credit rating plummeted three grades; and three hospital presidents \u2014 including the president of EMMC \u2014 stepped down, as did the CEO of the health system. <\/p>\n At the center has been EMMC. In a recent notice<\/a>, S&P Global said EMMC\u2019s underlying operating losses played a large role in it downgrading Northern Light Health\u2019s bond rating three notches. <\/p>\n \u201cGiven EMMC\u2019s importance to the system, we view improvement in earnings to be critical to future rating maintenance,\u201d the notice said.<\/p>\n While many major challenges are outside the health system\u2019s control, \u201cthe things that we can control, we\u2019re controlling,\u201d Rohrbaugh said.<\/p>\n Last year, the system closed two walk-in clinics in Waterville and Bangor; cut 300 positions; cut $30 million from contracts with OptumInsight Inc., which provides management services; and got a boost from $52 million in funds from the Federal Emergency Management Agency as reimbursement for pandemic-related expenses, according to audited financial statements. Closing Inland Hospital resulted in a loss of $40 million in 2025 but is expected to reduce ongoing operating costs. The system has also cut back on total compensation for top executives.<\/p>\n The changes have moved the system closer to getting out of the red. It lost $15 million last year, an improvement from its $156 million loss the prior year. EMMC also saw financial improvement last year, making $2 million from operations.<\/p>\n The system has performed better than it expected so far this year, though it lost $18.8 million in the first quarter. Rohrbaugh said the system had actually budgeted for a larger loss because the first quarter is usually slower and because the system planned to hire about 50 new physicians.<\/p>\n Northern Light Health operates its hospitals as a system and prefers not to publicly discuss individual performance, Rohrbaugh said. Nonetheless, fluctuations in EMMC\u2019s financial performance have increased in recent years.<\/p>\n EMMC\u2019s finances are worse than those of other hospitals in the system because it provides advanced services that are expensive and may lose money given the patient population size but that are still important to offer, Rohrbaugh said. These services include specialty pediatric services, advanced interventional and inpatient cardiac care, advanced neurological services including stroke care, behavioral health medical boarding, complex wound care and surgical cases transferred from other hospitals. <\/p>\n Many of these services are not available at smaller hospitals within the system, Rohrbaugh said. And many of those smaller hospitals do better financially than EMMC because they operate in a system with the flagship hospital.<\/p>\n \u201cWithout EMMC, we wouldn\u2019t be performing as well as we do perform, and we\u2019d actually perform worse,\u201d Rohrbaugh said. \u201cWhile there\u2019s lots of pressures at EMMC, at the end of the day, it\u2019s an important part of making sure that the communities we serve are served.\u201d<\/p>\n To that end, Northern Light Health said it does not plan to eliminate more hospitals or sell any hospitals. System administrators have not been approached by outside companies looking to buy the system, said Paul Bolin, executive vice president and chief people officer.<\/p>\n \u201cWe\u2019re not for sale, and we\u2019re maintaining our sovereignty in terms of being a Maine-based company led by Maine people here in our community,\u201d Bolin said. \u201cEveryone has been very clear. We\u2019re not looking for a buyout, and no one\u2019s approached us. We don\u2019t have any interest in that should they approach us.\u201d<\/p>\n \u2018Pretty far down the line of serious financial trouble\u2019<\/p>\n Northern Light Health is doing all the normal things that health systems do when they are in trouble, said Nancy Kane, professor emerita of health policy and management at the Harvard T.H. Chan School of Public Health. A health system can have one bad year, but it\u2019s far more concerning once it has five bad years, she said. Northern Light Health has lost money the last four years, and EMMC lost money two of those years.<\/p>\n Northern Light Health only had 60 days of cash on hand as of last year, which is low, Kane said. The number demonstrates how long a system could operate without additional revenue.<\/p>\n \u201cThey\u2019re pretty far down the line of serious financial trouble, and it proves that they\u2019re not out of it,\u201d Kane said.<\/p>\n In addition, Northern Light Health has historically spent more money on overhead expenses for the parent organization than other hospital systems, Kane said. Kane was an advisor on a study, published by the Healthcare Purchaser Alliance of Maine, which found that Northern Light Health\u2019s \u201chome office\u201d contributed to the system\u2019s losses between 2018 and 2023.<\/p>\n Costs for the system\u2019s home office include expenses related to human resources, technology, budget oversight, and legal and financial services, which benefit every hospital in the system, Rohrbaugh said. The system could have charged those overhead costs out to each hospital \u2014 potentially prompting more hospitals to see losses and providing a rosier financial picture of the home office \u2014 but did not.<\/p>\n \u201cBy reporting this data as a system, reflecting the shared services that support each hospital, we are giving the most accurate financial report possible. Individual hospital results, as reflected in the study cited, do not reflect that business operation costs are at the system level,\u201d Rohrbaugh said.<\/p>\n It can be difficult to determine what specifically drives losses for a health system because there\u2019s little public data available and insufficient oversight from the state into hospital finances, said Trevor Putnoky, president and CEO of the Healthcare Purchaser Alliance of Maine.<\/p>\n \u201cIt is unclear how much of these losses are due to circumstances within the market or delivery system writ large, and management decisions made within the system,\u201d Putnoky said.<\/p>\n Northern Light Health has undergone a years-long effort to reduce management expenses through reductions in leadership. Former health system CEO Timothy Dentry earned nearly $1.9 million in 2024, including retirement payments due to him, according to Northern Light Health.<\/p>\n But compensation for executives has declined as a percentage of total expenses. It used to make up 10 percent of expenses a decade ago and is now closer to 4 percent, according to the system\u2019s tax filings<\/a>. Northern Light Health has also cut more leadership, support and administrative positions than direct care worker positions such as nurses, Bolin said.<\/p>\n While Northern Light Health\u2019s debt has grown since 2023, it managed to bring it down some last year. However the system\u2019s problem is not necessarily the amount of debt it has but its ability to pay it off, said Anthony Jaccarino, senior program officer with the Maine Health and Higher Educational Facilities Authority. The bulk of Northern Light Health\u2019s debt obligation \u2014 $502 million by his most recent count \u2014 is issued by the authority, which was created by state statute to create tax-exempt financing for health and secondary education institutions.<\/p>\n Northern Light Health isn\u2019t the biggest health care borrower in the state. MaineHealth, for example, has more than $650 million in authority-issued bonds, Jaccarino said, while MaineGeneral owes the U.S. Department of Agriculture $308 million.<\/p>\n Most hospitals in Maine are operating on narrow margins, he said, but Northern Light Health\u2019s bond rating has dropped below investment grade, reflecting bond raters\u2019 opinion of the system\u2019s financial health. Northern Light Health has a much less favorable bond rating than the other major health systems in Maine.<\/p>\n However, many hospitals in Maine are unrated, which looks worse than having a low rating, Jaccarino said. If all Maine hospitals had bond ratings, Jaccarino said he suspected Northern Light Health would not be at the bottom of the list. <\/p>\n He believes Northern Light Health leaders are making decisions with a \u201clong view\u201d to reduce their expenses. \u201cIt\u2019s like a big ship turning around in a small channel: It takes a long time to turn it around,\u201d he said. He is optimistic that the system can get back to an investment grade rating in the near future, he said, as long as the federal government doesn\u2019t do \u201cfurther damage to health care reimbursement\u201d on top of imminent funding reductions.<\/p>\n Federal cuts are looming. The state anticipates that the One Big Beautiful Bill Act will result in an estimated 34,000 Mainers losing Medicaid coverage when changes to eligibility and work requirements go into effect next year, which will likely drive up the costs of uncompensated care for hospitals<\/a>. Northern Light Health estimates it will lose about $27 million in the first year due to Medicaid cuts. All members of Maine\u2019s congressional delegation<\/a>\u00a0voted against the legislation.<\/p>\n While Congress created a five-year fund for rural health care systems \u2014 with Maine receiving $190 million in the first year \u2014 it\u2019s not anticipated to make up expected losses. <\/p>\n Richard Gundling, vice president of the Illinois-based Healthcare Financial Management Association, said Northern Light Health\u2019s situation mirrors the persistent operating losses, rising labor costs and elevated debt levels that many rural hospital systems are facing across the country. <\/p>\n Rural health systems face a tougher financial environment because they have more patients on Medicare or Medicaid, which reimburses at a lower rate than commercial insurance, and they have to maintain essential services with low patient volumes, which makes it difficult to operate at economies of scale. <\/p>\n But financial sustainability is even more important in places where there are no other sources of health care to ensure people can continue to see a doctor, he said.<\/p>\n \u201cWithout EMMC, there\u2019s nobody else providing the services in the upper two-thirds of Maine,\u201d Rohrbaugh said.<\/p>\n Northern Light Health has a three-year strategy to reduce expenses by restructuring shared services across the system and \u201cundertaking operational and clinical redesign efforts intended to improve efficiency,\u201d according to the plan.<\/p>\n Northern Light Health has made progress cutting its reliance on contract workers, which previously cost the system $160 million at its peak during the COVID-19 pandemic; they now cost about $93 million, Rohrbaugh said. Plus expansion of an international workforce and recruitment of permanent staff are expected to improve labor costs by $67 million this year, according to financial statements. <\/p>\n Three health care policy experts agreed that the next challenge will be for hospitals serving rural patients to decide which offerings they can provide while remaining solvent. They will likely need to reduce services.<\/p>\n Michaud, the former president of the hospital association, said if something doesn\u2019t change \u2014 and he doesn\u2019t predict it will \u2014 then Maine will likely see more hospitals close across the state. The federal government is unlikely to give Maine more funding or expand Medicaid, Michaud said.<\/p>\n \u201cThere are going to be less services, and Maine people are going to be waiting longer and driving further. That is a fact. It\u2019s only a matter of time. How could it be any other way?\u201d he said.<\/p>\n Kane said it is becoming increasingly urgent to make sure that rural areas deliver care in a way that makes sense for a dispersed population. Northern Light Health has become too reliant on an old model of brick-and-mortar care that leans heavily on EMMC as its flagship hospital, she said. Instead, the system should invest more in its other types of services, such as primary care, ambulatory care, satellite clinics, home care and psychological care. <\/p>\n As for EMMC, Kane said, \u201cIf it\u2019s too big to fail, they will have to make it smaller.\u201d<\/p>\n If you have information or thoughts about the future of hospitals serving rural patients in Maine, please contact Rose Lundy at rose@themainemonitor.org.<\/p>\n This story was originally published by\u00a0The Maine Monitor<\/a>, a nonprofit and nonpartisan news organization. To get regular coverage from The Monitor, sign up for a free Monitor newsletter\u00a0here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Maine\u2019s second-largest health system, Northern Light Health, has been in a downward financial spiral, losing money four years…\n","protected":false},"author":2,"featured_media":587089,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59],"tags":[7056,97,252,253],"class_list":{"0":"post-587088","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-health-care","8":"tag-free","9":"tag-health","10":"tag-health-care","11":"tag-healthcare"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/587088","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=587088"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/587088\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/587089"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=587088"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=587088"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=587088"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/04\/Inland-Hospital-600x400.webp.jpeg\")
The only other Northern Light Health hospital with a worse operating margin than Eastern Maine Medical Center in 2024 was Inland Hospital in Waterville, which closed last June. Credit: Joseph Ciembroniewicz \/ Maine Monitor<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/04\/Bolin_Rohrbaugh-600x316.webp.jpeg\")
Paul Bolin, executive vice president and chief people officer for Northern Light Health, at left, and James Rohrbaugh, executive vice president and chief financial officer, said Eastern Maine Medical Center is a vital part of Northern Light Health\u2019s core mission. Credit: Katherine Emery \/ Maine Monitor<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/04\/Northern-Light-600x338.webp.jpeg\")
Northern Light Health, which serves the northern two-thirds of Maine, has lost money the last four years in a row. Credit: Katherine Emery \/ Maine Monitor<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/04\/Northern-Light-Health-600x392.webp.jpeg\")
Inflation and workforce challenges have been the primary drivers of Northern Light Health\u2019s financial woes, according to executives. Credit: Katherine Emery \/ Maine Monitor<\/p>\n