Thursday, December 5, 2013
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Mercy Hospital executives deny that they misled a Massachusetts company in negotiations to sell the hospital.
Eastern Maine Healthcare Systems has nearly 8,000 employees and operates seven hospitals in central, northern and coastal Maine, including Eastern Maine Medical Center in Bangor. It also operates a variety of ambulance companies, home health agencies, physician practices, long-term care and assisted-living facilities.
Eastern's pending takeover of Mercy has sparked widespread speculation about the potential impact on health care across Maine, which has 39 hospitals.
Some are relieved that Mercy ended negotiations with a for-profit company and is now negotiating with a nonprofit.
"Overall, I'd say the reaction has been pleasant surprise," said Gordon Smith, executive vice president of the Maine Medical Association, which represents 3,500 physicians, medical students and residents in training.
"It's basically a case of better the devil you know," Smith said. "To have an in-state solution to the financial situation at Mercy seems better than an out-of-state solution. Most people are more comfortable with the idea of health care being a nonprofit venture. It makes a difference when the operational margins are rolled back into the mission of the facility."
Mercy Health System of Maine started a strategic review more than a year ago, faced with a weak economy and pending health care reform.
It has made several rounds of layoffs in recent years, while the negative balance between revenues and expenses rose from $1.3 million in 2008 to $5 million in 2009 to $16.6 million in 2010, according to federal tax-exemption forms.
Joe Ditre, executive director of Consumers for Affordable Health Care in Maine, met with Mercy executives shortly after they announced the pending sale to Steward.
Ditre said Mercy officials shared his concerns about maintaining the cost, quality and mission to provide the personalized health care for which Mercy is known.
"That the sale didn't go through tells me that one of those things didn't measure up," Ditre said.
Before Murphy's memo came to light, Andy Coburn questioned whether Steward executives saw something they didn't like in Mercy's financials. Coburn is an associate dean and research professor at the Muskie School of Public Service at the University of Southern Maine.
"There's a long way to go for Eastern Maine Healthcare Systems to consider what it will mean for Mercy to become part of its organization," Coburn said.
Coburn also wondered whether Eastern, facing limited options for growth in northern Maine, has decided to grow into southern Maine and compete directly with Maine Medical Center in Portland, the largest hospital in the state and the largest member of the MaineHealth hospital group.
Maine Med executives are watching Mercy's actions, too, knowing that any developments might affect the delivery of health care in Greater Portland and across the state, said Richard Petersen, Maine Med's president and chief executive officer.
"We were surprised by this new development on the sale of Mercy Hospital to Eastern Maine Healthcare Systems," Petersen said in a written statement. "However, we suspected that Steward and Mercy would have challenges in reaching an agreement."
CORRECTION: This story was updated at 2:40 p.m. on Dec. 12, 2012, to reflect that the reporter mistakenly called and got no response from the spokesperson for Eastern Maine Medical Center, rather than the spokesperson for Eastern Maine Health Systems.
Staff Writer Kelley Bouchard can be contacted at 791-6328 or at: email@example.com