Sticking to the basics pays off�in a big way�for one rural hospital in Maine
by Jan Greene - Financial success, always elusive, can be downright rare for small, rural hospitals, which have less room to maneuver in their books. Years in which margins break 2 percent are considered successes; more often, just breaking even is good enough. A margin in the 9 percent range? Forget it.

Yet that's what Mayo Regional Hospital in Dover-Foxcroft, Maine, is ringing up. The 46-bed hospital's secret: sticking to the basics. It's drawing a stable group of primary care doctors to the area, giving employees financial incentives to maintain quality, staying involved in the community and avoiding new services that detract from the central mission. "We haven't extended ourselves beyond the core business," says Gregory Bowler, chairman of the not-for-profit community hospital's board and a longtime board member. "We're still focused in a very specific way to support the community."

When CEO Ralph Gabarro came on in 1997, the hospital was in the black, but it had run through a series of executives in a short time and was watching its physicians leave the area. "All the essentials were in place," Gabarro recalls. "It was more a matter of consistency, some leadership and some stability that the organization really needed."

Gabarro began by forging relationships with the medical staff. This was made easier by working with an existing corporation that employs most of the hospital's primary care physicians, relieving them of day-to-day business concerns. Gabarro also introduced a goal-sharing program, which returned $100,000 to employees last year based on quality performance. "That's been a very exciting thing for the organization," Gabarro says. Each employee received about $600.

Efforts to improve both employee and patient satisfaction appear to have paid off. Mayo Regional has the highest employee satisfaction scores of all the hospitals participating in consulting firm Avatar International's 2001 survey. The hospital ranked No. 3 nationwide in the Avatar emergency patient satisfaction survey, No. 16 for inpatient satisfaction. Avatar's surveys are used by 140 hospitals around the country.

Mayo Regional's numbers make it among the most profitable rural hospitals in the country. The numbers mystify even Bowler and Gabarro, given the distressed local economy and strong competition from two larger hospitals 35 miles away in Bangor. "We're trying to better understand that," Gabarro says. But his gut tells him the answer lies in expanding certain outpatient services that make sense in the rural setting.

For instance, Gabarro's strong connections to community organizations (he's president of the chamber of commerce and active in Kiwanis) alerted him to the region's need for more obstetrics/gynecology and pediatrics services. At the same time, he found the population is too small to support dialysis services, so he decided not to add them.

Craig Jesiolowski, group vice president of Quorum Health Resources, who oversees Gabarro, says Mayo Regional's success makes sense. "If you take care of your employees and patients, the bottom line will follow and take care of itself," Jesiolowski says.