What Unification Means for Memorial Hospital

A Letter from Board Chair Laura Jawitz and President & CEO Scott McKinnon 

The member organizations of MaineHealth have adopted a proposal to join together under a single Board of Trustees that will oversee a unified financial and operating model for Northern New England’s largest healthcare system.

This FAQ page was developed to help answer questions our community members might have on unification and next steps.

Q. What is unification?
A. “Unification” is a term being used by Memorial Hospital and other members of MaineHealth to describe a proposed change to the governance structure of the healthcare system. Memorial and the nine other members of MaineHealth have previously been joined together through agreements that leave each member as a free-standing entity. Under these agreements, local boards and the Board of Trustees of MaineHealth share decisions, with each member standing on its own financially. Under the proposed unification – which was approved by all the members of MaineHealth in late 2017 - the system’s members will no longer stand alone financially, but instead will all be under a unified financial and operating model overseen by a system-wide Board of Trustees. This will allow resources to flow more freely across the system to pay for care in local communities.

Q. Does this mean Memorial will no longer have a local board?
A. Our local board will continue to participate in the development of local budgets and strategic plans, and we’ll oversee care quality and safety and the provision of credentials to medical staff. We will do this jointly with our partners at MaineHealth, which like Memorial is a nonprofit organization.

Q. But under unification a system-wide Board of Trustees would have ultimate governing authority over Memorial and the other MaineHealth members, right?
A. Yes. That is why Memorial Trustees spent many months researching this proposal and did extensive outreach into the community, including a community forum on Oct. 11, 2017, that drew more than 170 people. Along with other MaineHealth members, Memorial Trustees worked for more than a year to create a governance model that safeguards local care and gives us input on many decisions.  But there are still additional steps to be taken to ensure the protection of the hospital’s mission. That’s why the New Hampshire Charitable Trust division of the state Attorney General’s Office will review our proposal to unify with MaineHealth. 

Q. What does the review by the Attorney General’s office entail?
A. That review, lasting 120 days will include a local public hearing and will commence in early 2018. It will take place after our board has crafted and voted on detailed language to make sure our charitable mission here in the Valley will continue to be supported.  That is another unique step that our board has taken as we continue to advocate for our local community.

Q. When is unification expected to take effect?
A. The goal is to bring the 10 member organizations of MaineHealth under a single, system-wide Board of Trustees by Jan. 1, 2019.

Q. Why make this governance change now?
A. Health care is in a state of rapid change, and many community hospitals and local healthcare systems are struggling as a result. One significant trend is the migration of complex procedures to major medical centers, which are better able to leverage new technologies employed by highly specialized providers. Traditionally, these more complex procedures have provided much of the revenue local hospitals needed to survive, and now that revenue is going away. Meanwhile, tertiary care centers like Maine Medical Center are seeing growth in the number of complex procedures they undertake and in their bottom lines. Unification allows MaineHealth to direct resources to where they are needed to maintain services in local communities.

Q. But isn’t Memorial Hospital doing ok financially? Why would it need more support from MaineHealth?
A. Memorial Hospital and other MaineHealth members designated as “Critical Access” by the federal government, do get more favorable government reimbursements, and as a result these smaller organizations are under somewhat less pressure than other community hospitals. Nonetheless, over time these hospitals are expected to see their finances under increasing pressure. Unification will allow Memorial and other MaineHealth members to better stay ahead of troublesome trends.

Q. But still, given the importance of local control, why stick with a Maine healthcare system? Why not try to find a New Hampshire partner instead?
A. It is important to remember that our hospital has been a part of the MaineHealth System since 2013. In the period leading up to the signing of that agreement, the board researched options for hospital system affiliations, culminating with the selection of MaineHealth as the best and most logical partner for this relationship. Notably, they considered potential affiliations with Dartmouth Hitchcock Hospital, other Maine hospital systems and the smaller group of hospitals that today comprise North Country Health Consortium. They concluded that being a part of MaineHealth and enhancing our access to its Portland flagship, Maine Medical Center, would provide the best care for our patients. 

Those conclusions were reaffirmed when reviewing unification. And now that all other MaineHealth members have voted to unify, it is clear that, had Memorial chosen not to do so, it would have been an outlier in the system. In the end, the Memorial Board of Trustees decided that staying with MaineHealth was best for patients, and it also concluded that, on a practical basis, staying with MaineHealth meant supporting this new governance model.

Q. Can’t Memorial just go back to being an independent hospital?
A. Memorial Hospital is in a binding membership agreement with MaineHealth. Still, it could open discussions to leave MaineHealth entirely and go back to being an independent entity. The problem there is that the world that once supported local, independent hospitals no longer exists. One need only look across the hospital landscape in New Hampshire to see that – few if any non-affiliated hospitals remain. Pulling out of MaineHealth would have profound financial implications for Memorial Hospital, affecting everything from our purchasing power to our bond rating. 

Q. There have been reports in the newspaper and comments on social media suggesting that many members of Memorial Hospital’s medical staff are opposed to, or at least highly skeptical of, the idea of unification. If the providers are skeptical, why move forward?
A. Health care is changing at a rapid pace and this change has proven unsettling to many of our stakeholders, notably our medical staff on the front lines. It is fair to say that the idea of changing our governance model on top of everything else that is changing hasn’t sat well with some. And when patients see their own providers frustrated and concerned, it is frustrating and concerning to them as well. That is an understandable reaction. Still, the Memorial Board of Trustees has an obligation to stay ahead of trends that could threaten the organization’s ability to provide the best care as close to home as possible. After carefully considering all the options, the Board concluded that remaining a full partner in a world-class healthcare system was the best way to do that.

Q. Ok, but how do we know the Board of Trustees has the interests of the local community in mind?
A. Memorial’s nonprofit board is made up of men and women who have a substantial stake in what is best for the people living in the Valley. Many of our trustees have lived, worked, and raised families here for decades. Four trustees are providers at Memorial, three practicing, one a long-time family practitioner now in an administrative role. Some are local business owners and entrepreneurs. Others are retirees who are volunteering their time and expertise in the interest of supporting their new hometown hospital.  They live in local towns including Albany, Bartlett, Conway, Glen, Intervale, Jackson, Madison and North Conway. Our board members are committed volunteers and board members for other Valley organizations including the MWV Economic Council, OLLI at Granite State College, White Mountain Community Health Center, MWV Chamber of Commerce, Habitat for Humanity, the New England Ski Museum, local churches and many others. MaineHealth President Bill Caron, who sits on the boards of all member organizations, is the only non-local trustee, and he did not vote on the adoption of unification.

Q. What will happen to local foundation funds?
A. All local foundation monies that have accumulated at Memorial Hospital will be spent on priorities here in our community. The majority of those funds will be expended prior to unification taking full effect.

A New Way Forward

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

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