You may have seen news accounts or heard from people connected with your local hospital that the member organizations of MaineHealth are talking about something called “unification.” 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 conversation now ongoing about how our member healthcare organizations that make up our system govern themselves.
Right now, members of the MaineHealth family are joined by agreements that leave each organization as a free-standing entity, with many decisions shared by our local boards and a system-wide Board of Trustees.
Across our system, important decisions like creating a budget, hiring a member chief executive and setting a long-term strategic plan must meet with the approval of both the local board and our system board.
The advantage of this arrangement is that it allows local board members a great deal of control over their community health systems.
The disadvantage is, in order for our member boards to have this degree of control, each local healthcare network must be set up as a free-standing entity. This limits how resources can be shared and deployed across the system and requires MaineHealth to operate through at least 10 different budgets.
Why change now?
Up until now, our members have felt that this 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 our organizations are committed to providing care regardless of ability to pay, and with Maine rejecting Medicaid expansion, that means we must provide more charitable care.
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. In fact, in 2015, 20 Maine hospitals – including four MaineHealth members – performed fewer than two inpatient surgeries per day.
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 employed 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” by the federal government and thus eligible to get more generous government payments, are seeing their finances erode. Last year, four of our seven local healthcare networks lost money. A fifth fell well short of budget.
It’s not all bad news
As a system, we met our budgeted operating margin last year, largely on the strength of Maine Medical Center, which is seeing growing inpatient volume and more complexity in its cases. Our healthcare system rewards these trends but does little for community hospitals as they shift to the important missions of primary and secondary care as well as community health.
The good news is, as a system, MaineHealth is in strong financial shape. 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.
The challenge, however, is how do we move those resources back to local healthcare networks in real time? Under our current structure, members can save some money through things like shared purchasing, but in each community, services must pay for themselves. And where we want to link care in system-wide efforts, as with our AMI Perfuse program or our Tele-stroke Program, we have to create a complex set of agreements and billing procedures.
Finding a balance in support of our communities
So our members have started to ask themselves these questions: What can we accomplish if we were unified as one entity with a single budget 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?
That is the essence of our unification conversation, but it’s not an easy dialogue in a region where local control is highly valued. Together, we are trying to find the right 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 we are hopeful this can be accomplished while retaining the local identity of each of our member organizations.
In coming weeks and months, we will be going out into our communities for a series of forums on our unification dialogue. We invite you to share your thoughts. Remember, you are an important part of our MaineHealth mission of “Working together so our communities are the healthiest in America.”