MaineHealth’s tentative plan to consolidate and streamline operations within the state’s largest health care network is running into opposition from health care organizations operating under its umbrella.
The proposal would merge a dozen affiliated health systems into one nonprofit MaineHealth entity. MaineHealth officials say it would be a fairer and more efficient way to manage the health systems, but critics liken it to a power grab.
The proposal – to be rolled out over the next several months – would unify 12 separate nonprofits into one 18,000-employee nonprofit organization, with one board that would make final decisions for the entire system.
“It is extremely difficult to see how something that is high-performing and operating in the black like LincolnHealth (in Boothbay Harbor) would benefit from consolidating,” said Les Fossel, a board member at LincolnHealth, part of the MaineHealth system. Fossel said losing local control of health systems could lead to poor decisions coming out of Portland.
“The culture in Portland is simply different than it is in other parts of Maine,” he said.
MaineHealth, located on Free Street in downtown Portland, is the parent company of Maine Medical Center and 11 other hospitals and health care networks, including Franklin Community Health Network, Western Maine Health, Maine Behavioral Healthcare, Memorial Hospital in New Hampshire and Southern Maine Health Care.
A group representing 42 doctors in Waldo County also expressed strong reservations in a letter released last week, according to a Dec. 1 story in The Republican Journal in Belfast.
“We are concerned that a geographically remote and diverse board cannot make the same well-informed decisions about staffing, services, finances and appointments for our hospital and community that our current local board can,” the letter said.
But Bill Caron, president of MaineHealth, said the local boards would still exist and their recommendations would be important. “We’ve always valued local input,” Caron said.
He said many health systems across the country operate with systems more centralized than what MaineHealth currently has.
To consolidate into one nonprofit would require the approval of the local health boards, and MaineHealth executives will be working over the next few months to explain the benefits of unification to board members.
“We really want everyone to come on board,” said Susannah Swihart, chair of the MaineHealth board of trustees.
Dr. Benjamin Mailloux, president of the Waldo County physicians group, said the group met with Caron recently, that the doctors still have many questions, and that MaineHealth has a lot of convincing to do.
“They need to show us they can do it as well or better than we can do,” Mailloux said. “Waldo (County General Hospital) has been in the black for 38 years, so it’s hard for us to say, ‘Oh yeah, you can do this better.’ ”
MaineHealth’s footprint stretches from Sanford to Belfast, into western Maine and Carroll County, New Hampshire. It was formed in 1997 as a decentralized system – the board overseeing each hospital or health network has much autonomy and manages separate budgets. Operating funds from one hospital cannot be transferred to another.
Each is its own nonprofit organization, despite being part of MaineHealth. If the plan becomes a reality, MaineHealth would become one nonprofit, and the boards that currently oversee outlying hospitals would recommend changes rather than have the power to make their own decisions.
The budgets would be consolidated into one $2.3 billion spending plan.
Caron said the flexibility of having one budget and being able to allocate resources where needed is crucial. He said, for instance, that it’s unfair for one hospital to undergo layoffs and wage freezes while employees at the more well-off hospitals enjoy raises.
“It doesn’t feel good to have those kinds of disparities across the system,” Caron said.
Three of the systems – Pen Bay Medical Center, Franklin Community Health Network and Southern Maine Health Care – are operating in the red, Caron said, and as it stands now it’s difficult for the parent company to help them out.
The disparity in finances has more to do with demographics and changes in the health care industry as opposed to how efficiently each hospital is run, Caron said.
For instance, patients that used to have surgeries done at outlying hospitals are instead being transferred to specialists at Maine Med – a nationwide trend of funneling patients to larger, urban hospitals for procedures that used to be done at local hospitals.
When that happens, it’s like the rural hospital is “taking money out of their hospital and transferring it to Portland,” said Bill Burke, chair of the Maine Medical Center board.
Also, as rural areas of Maine age faster than southern Maine, the patient mix is hurting the bottom line of health systems that rely on older and poorer patients. For instance, Maine Med has a higher percentage of privately insured patients than Medicare, Medicaid and free-care patients than other Maine hospitals. Private insurance reimburses hospitals at higher rates than patients with government insurance or no insurance.
MaineHealth already has consolidated some of its functions – such as human resources, IT and finance. Physicians are also being shared among some health systems, such as between Waldo County General Hospital and Pen Bay Medical Center.