Marie Vienneau's creativity, fearlessness and tenacity have helped keep the small, rural hospital she oversees in business.
Barely six months after Vienneau was promoted to chief executive officer of Millinocket (Maine) Regional Hospital in August 2002, the area's largest employer filed for bankruptcy and closed. The Katahdin Paper Co., which operated two mills in the area, accounted for 22% of the cash flow at the northern Maine hospital.
About one-third of the area's population -- both employees and retirees -- lost their health insurance in a single day when 1,130 people were laid off. And Katahdin already owed the hospital $1.2 million when it shut down. "We never got any of it back," Vienneau says.Millinocket Regional reduced expenses by $2 million to survive, including pay cuts for physicians.
While some CEOs might have shied away from renegotiating contracts with physicians, Vienneau didn't. "She is not afraid to tackle the tough issues," says Lona Gagnon, chairman of Millinocket Regional. "It is so refreshing for somebody to be willing to tackle an issue when it first appears and not think it is going to go away." Not only was Vienneau able to renegotiate contracts, she did it without hurting her relationship with the physicians.
Before the mill announcement, Vienneau had taken up another difficult issue: transitioning the hospital to critical-access status in November 2002, which meant downsizing from 42 to 25 licensed beds. Because critical-access hospitals are reimbursed for Medicare patients on a cost basis, Millinocket nets nearly $1 million in extra revenue annually.
"This is another example where she saw what we needed to do to survive," Gagnon says.
Despite the extra money involved, physicians and some community groups initially opposed the change. "There was a lot of concern that it would mean an erosion of our services," says Vienneau, 38, an RN and Millinocket native.
Responding to the opposition, Vienneau met with physicians and community groups, patiently explaining her belief that the change wouldn't lead to service cuts, and it hasn't, she says. The combination of lowering costs and increasing revenue dramatically improved the hospital's financial performance.
In fiscal 2003, the hospital lost $2 million on net patient revenue of $17 million. In fiscal 2004, the hospital's operating income was nearly $598,000 on net patient revenue of $18.7 million.Although Katahdin Paper reopened both mills in 2003 and 2004, it now employs only 500 and accounts for just 5% of the hospital's patient revenue.
With the crisis behind her, Vienneau is taking the hospital in new directions. For example, Vienneau persuaded two nearby federally qualified primary health centers to expand into the Millinocket area. The hospital also is expanding rehabilitation services to help care for an increasingly elderly population.