Creating a More Unified MaineHealth

You may have seen news accounts or heard from people connected with your local hospital that the members of MaineHealth have decided to “unify” as of Jan. 1, 2019.  What does that mean? And, more importantly, what does it mean for your local healthcare network and the care provided in your community? 

Unification is a term we at MaineHealth are using to describe a change in how the member healthcare organizations that make up our system will govern themselves.

Until now, members of the MaineHealth family have been joined together through agreements that left each organization as a free-standing entity, with many decisions shared by our local boards and a system-wide Board of Trustees.

The advantage of this arrangement has been that it has allowed local board members a great deal of control over their community health systems.

The disadvantage has been that, in order for our member boards to have this degree of control, each local healthcare network has had to be set up as a free-standing entity. This has limited how resources could be shared and deployed across the system, and it has required MaineHealth to operate through at least 10 different budgets.

A New Way Forward

However, in recent years it has become clear that a changing healthcare landscape requires that members of the MaineHealth family be willing to adapt to survive.

Until now, our members have felt that a more decentralized approach has been the best fit for our organizations, which were born in the New England tradition of strong, local governance dating to the days when town meetings were common.

But healthcare is changing.

For one thing, the population we serve is getting older. As a result, more people than ever are covered by Medicare, which doesn’t cover the full cost of caring for those patients. Meanwhile, all of our organizations are committed to providing care regardless of ability to pay, and providing that charitable care can create great stress for rural providers serving populations with a large number of uninsured people.

These expenses – the shortfall in government programs like Medicare and the cost of charitable care – are passed on in the form of higher charges to patients with private insurance and those without insurance who can afford to pay for their own care. Understandably, private insurers and self-pay patients are stressed by these rising costs, and they are pushing back, squeezing the revenue stream available to our members.

These pressures are system-wide, but our local healthcare systems are also being severely impacted by other forces.

Today, fewer procedures are taking place at our community hospitals.  That’s partly because many relatively simple procedures are now being done in outpatient clinics. But it’s also because more complex procedures are being done at larger, specialized medical centers that can afford expensive new technologies used by highly specialized providers.

And here’s the problem. Traditionally, surgeries and other complex procedures have provided much of the revenue our community hospitals needed to stay open. Now that money is going away.

Meanwhile, large tertiary care hospitals like Maine Medical Center are seeing growth. Indeed, by 2015, more than 70 percent of all inpatient surgeries in Maine were taking place at just five hospitals.

The net result is that local community hospitals – unable to pass more costs on to private insurers and others - are either now losing money, or can be expected to suffer losses in the near future.

Even the smallest of our members, hospitals with 25 or fewer beds designated as “Critical Access” facilities by the federal government and thus eligible to get more generous government payments, are seeing their finances erode. 

Stronger Together

However, by bringing the members into a single organization, resources can flow more easily between and among various parts of the healthcare system. That’s significant given that the MaineHealth system as a whole is financially strong, with the third best bond rating among New England healthcare systems, behind only Mass General’s Partners system and Yale New Haven Health.

Dollars have migrated from rural to urban, from small to large hospitals, but those dollars haven’t gone away. And MaineHealth is positioned, as a system, to deliver the best care in the right place at the right time for all our patients. Our goal is to provide care across a robust, integrated system that includes great primary care and world-class specialists.

The key to doing this, however, is finding a balance in support of our communities. So, starting in the fall of 2016 and culminating with final approval on Oct. 24, 2018, by MaineHealth’s Corporators (Corporators are community representatives from across the system who have an oversight role within our not-for-profit organization), our members asked themselves these questions: What can we accomplish if we were unified as one entity with a single financial structure aimed at making sure each community gets the services it needs? And, just as importantly, can we do this in a way that preserves a measure of local control and input into the care we provide locally?

This dialogue stretched for more than two years and encompassed all our stakeholders. Our local boards gathered input from physicians and others inside our organizations, and importantly, reached out to their communities. This included a dozen community forums that, taken together, drew hundreds of people from across our service area.

It wasn’t always an easy dialogue in a region where local control is highly valued. But our local boards and system-wide Board of Trustees feel they have found a good balance. Sharing resources across the system requires a single Board of Trustees overseeing a system-wide budget, so there’s no getting around the loss of at least some local authority. But, a strong role for local boards will remain. They will formulate local budgets and strategic plans, oversee the quality and safety of care and provide credentials to doctors and other providers, among other responsibilities.

The unification proposal also guarantees MaineHealth’s geographically based members at least one representative on the system board for the first five years. This was a topic of extensive discussion among MaineHealth members as leaders wrestled with the fact that providing that representation across the system creates a very large board that, over time, could prove unwieldy. The five-year guarantee, along with an ongoing commitment to maintaining geographic diversity on the system board after that time, was a compromise reached as part of the discussion among MaineHealth members.

This new system of governance leaves MaineHealth in a stronger position to put all its resources behind the care delivered in each and every community. This would not have been possible without the vision and hard work of local and system board members, and thanks to their efforts the system is better positioned to meet the needs of patients and local communities.

The final approval of the unification plan means that, as of Jan. 1, Maine Medical Center, Southern Maine Health Care, LincolnHealth, Coastal Healthcare Alliance, Western Maine Health, Franklin Community Health Network and Maine Behavioral Healthcare will all be governed by a single Board of Trustees. As noted, each local organization will retain a local board that will have a significant role in overseeing the care delivered in each community.

These local organizations oversee local health systems based in Portland, Biddeford, Norway, Farmington, Belfast, Rockland and Damariscotta as well as the Spring Harbor psychiatric hospital in Westbrook. They also include a range of physician practices and other healthcare facilities across an area serving 1.1 million people. The new, combined entity will have approximately 19,000 employees and more than $3 billion in annual revenues.

Memorial Hospital, MaineHealth’s member in North Conway, N.H., has not yet unified because regulatory issues in New Hampshire put the process there on a different timeline. Also, two other current MaineHealth members, NorDx Laboratories and MaineHealth Care at Home, will not be unifying due to the unique scope of services they provide as non-hospital members.

Still, with much of the system brought together, the MaineHealth family of local health care providers will be better able to cope with a rapidly changing environment. This positions us to deliver the best possible care as close to home as possible. That’s an important part of our mission of, “Working together so our communities are the healthiest in America.”

A New Way Forward

The changing healthcare landscape requires that members of the MaineHealth family be willing to adapt to survive.