The Board of Trustees of Franklin Community Health Network on Tuesday adopted a proposal for the organization to join with other members of the MaineHealth system to form a single financial and operating model, a change in governance that has been discussed for the past year as a “unification” of the healthcare system’s members.
The unification proposal is subject to a due diligence review by FCHN, MaineHealth and the other member organizations. Assuming the other members of MaineHealth give their approval in coming weeks and there are no unexpected findings in the due diligence process, FCHN and the nine other members of MaineHealth will be governed by a single Board of Trustees beginning in January 2019. FCHN is the parent organization of Franklin Memorial Hospital and its affiliated healthcare services.
“This decision gives us an opportunity to fully leverage the scale and expertise of MaineHealth,” said Clint Boothby, chair of the FCHN board. “At the same time, this proposal leaves in place a strong local board that will oversee the care we provide here in our community.”
A year ago, MaineHealth system leaders initiated a conversation with its members about changing the organization’s decentralized governance model. The proposed unification will have all 10 member organizations operating under a single financial structure overseen by a system Board of Trustees. This will allow resources to flow more freely across the system to better support care in local communities.
Currently, each MaineHealth member must financially stand on its own, generating the revenue necessary to pay for the services in that particular local community. In recent years, however, many community hospitals have come under mounting financial pressure. This has been caused in part by the migration of more complex procedures to major medical centers, which are able to leverage new technologies employed by highly specialized providers.
Across the MaineHealth system this has created uneven financial performance among member hospitals, threatening the ability of some community hospitals to continue to deliver needed care. Meanwhile, Maine Medical Center in Portland, the system’s tertiary care hospital, has seen growth in volume and in its bottom line as complex procedures have migrated there.
A unified governance model would allow resources to flow across the system, better supporting the delivery of care in local communities.
The change does mean ceding many aspects of local control to a single Board of Trustees, however, and that concern generated a good deal of discussion across FCHN’s service area and the other communities served by MaineHealth members.
“We had a number of concerns that had to be addressed before we were willing to adopt this change,” said Boothby. “We wanted to make sure the system board couldn’t take away services arbitrarily, and we wanted to know that, as a small hospital that is part of a larger system, we would continue to have a voice.”
The FCHN board conducted an extensive review of the proposal. It also proactively reached out to the community for a dialogue on the merits and concerns associated with the unification plan. This included a community forum held on June 11 that drew approximately 75 people.
In the end, the unification proposal adopted by the FCHN trustees provides a strong role for a local board. Its responsibilities will include formulating budgets and strategic plans, the credentialing of physicians and other providers as well as oversight of care quality.
The proposal also guarantees FCHN a 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 board after that time, was a compromise reached as part of the discussion among MaineHealth members.
“In the end, our board concluded that MaineHealth has been good partner since we joined the system three years ago,” said Boothby. “Joining with the other members gives us an opportunity to provide great care here in our community in partnership with an excellent healthcare system.”