After filing for Chapter 11 bankruptcy, Maine's only freestanding proprietary psychiatric hospital has attracted a few locals who may buy the troubled facility.
Officials at not-for-profits Maine Medical Center and Mercy Hospital, both in Portland, said they may place bids for South Portland's Jackson Brook Institute.
The institute, which filed for bankruptcy protection in late March, may purchase Smith House, a group of outpatient mental health clinics, to enhance its sale value. The clinics have 1,300 patients and are owned by Wellesley, Mass.-based Community Care Systems, which is also Jackson Brook's parent company. The institute has the option of buying the clinics for only $10 from Community Care, which considered closing them last month.
"Jackson Brook Institute has been an important component of the services here," said Vince Conti, president of Maine Medical. "But since it is for-profit and owned by an out-of-state provider, it has never been fully integrated into the mental health system here."
Conti said his hospital, which has psychiatric and psy-chology programs, would be willing to lead a consortium of local providers in forming a unified regional mental health system in southern Maine.
Mercy President Howard Buckley said his hospital wants to buy Jackson Brook. He said one of the institute's problems was the state's hurried transition of mental health services from the state to the local level.
Jackson Brook ran into financial trouble when a 1995 federal law cut funding for a state and federally funded mental health program that it had participated in. The 106-bed acute-care facility owes creditors $8.5 million. It lost $4.5 million on $17.3 million in net patient revenues in 1997, according to SMG Marketing Group, a healthcare information company based in Chicago.
"The state felt compelled to come in and put (Jackson Brook) into receivership, to get a manager to oversee the daily operations," said Bruce Rueben, president of the Maine Hospital Association. A month ago, the state hired Allomet Partners, a turnaround consultant company based in New York, to improve the hospital's operations.
"An event like this is unprecedented in Maine. It's the only situation like this within the five years that I've been here," Rueben said. He said the facility was highly regarded by the state and community before the hospital's financial troubles surfaced last fall.
Kevin Concannon, commissioner of the Maine Department of Human Services, said he believes Jackson Brook will be up for sale within three months, pending approval by a bankruptcy court. Maine's certificate-of-need law requires the department to approve the sale. "Jackson Brook Institute developed a terrible reputation with its creditors. . . . It had to pay corner store prices in a supermarket world," Concannon said.