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.”  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.


Previously, members of the MaineHealth family 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 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.


Up 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 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.  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.   


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 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. Our goal is to provide care across a robust system of care that includes great primary care and world-class specialists.


The challenge, however, is how do we move resources back to local healthcare networks in real time? Under the decentralized model, members have been able to save some money through things like shared purchasing, but in each community, services have had to 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 had to create a complex set of agreements and billing procedures.


Finding a balance in support of our communities

Starting in the fall of 2016 and culminating in a final decision in December 2017, 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 a year 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.


With all member organizations having approved of the proposed unification, MaineHealth and its members are working in 2018 to implement the new governance model. This includes a due diligence review among MaineHealth and its members. It also includes following a regulatory process unique to our member in New Hampshire, Memorial Hospital in North Conway, N.H. The expectation is that MaineHealth members will be joined together under a single Board of Trustees starting in January 2019.


The result, we believe, will be a healthcare system that is better able to cope with a rapidly changing environment. And the goal is to position MaineHealth and its members 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.