chamber of commerce

HAD 4 Board approves 2002 Mayo Hospital Budget
DOVER-FOXCROFT - Hospital Administrative District 4 directors have approved a fiscal year 2002 Mayo Regional Hospital operating budget that makes a significant investment in wages and benefits for Mayo employees.

The budget shows a rise in operating expenses of 9.8% ($1,777,263), with 67% of that total increase, or $1,188,282, directly due to increased wage and benefit expenses. Mayo Regional Hospital is now the third-largest employer in the Penquis region, with 228 full-time equivalent workers and total employment of 290. The hospital's budget for salaries, wages and benefits is $9,749,497 for 2002.

Chief Executive Officer Ralph Gabarro said Mayo's work force investment strategy focuses on four areas:

  • A 3% annual merit increase available to all eligible employees, based on job performance.
  • Wage adjustments arising from a hospital analysis designed to keep the pay of Mayo employees competitive in the Maine healthcare sector. Nearly 60% of Mayo employees will experience a wage adjustment as a result of this process, at a total investment of $195,000.
  • Continuation of Mayo's goal-sharing program, which distributes bonuses to all eligible employees when the hospital reaches target goals for financial performance and quality of care, as measured through patient satisfaction surveys.
  • Introduction of a new longevity bonus program for longer-term employees to reward them for dedication to Mayo. All regular employees who meet performance standards will be eligible for an annual $250 bonus after 10 years of service. The annual bonus rises to $500 after 15 years, $750 after 20 years and $1,000 after 25 years.

    "Our employees are Mayo's most valuable resource. In order to retain them during a time of acute shortages in the national healthcare labor market, we must take every step we can to remain competitive and position our hospital as an employer of choice," said Gabarro. "Rather than relying exclusively on recruitment bonuses for new employees, as many hospitals do, Mayo decided to start the longevity bonus program to recognize our existing employees for their loyalty and commitment."

    Mayo's 2002 budget, which began Oct. 1, assumes net operating revenues of over $21 million and expenses of just under $20 million. That leaves the hospital an operating margin of $1,035,413, or 4.9%.

    Net income is reinvested back into the nonprofit hospital to fund depreciation and acquire new equipment.

    Dennis Allen, Mayo's Chief Financial Officer, said the budget anticipates no significant changes in overall utilization of hospital services. Admissions are expected to remain stable, at 1,650 per year. The budget estimates an average daily census of 14.6 patients, with an average length of stay of 3.2 days. Outpatient revenue is expected to account for 59% of Mayo's budget.

    Allen expects the hospital's revenues to rise by 4.1% due to a combination of increased usage and selected rate changes that will be made in various departments.

    HAD 4 directors also authorized a hospital capital equipment budget of $1,019,562, exclusive of any building renovation and new construction costs associated with Mayo's ongoing facility expansion project. Construction-related costs are included in a separate construction budget and will be funded by a bond issue and other funding sources.

    Some of the larger items in the capital equipment budget are radiology equipment, a new ambulance, operating room equipment and nursing monitoring equipment.

    Copyright 2001 SOUTHERN PISCATAQUIS COUNTY CHAMBER OF COMMERCE All Rights Reserved~ Updated: November 2001