Hospital officials say finances not a motive behind proposed Parkview takeover

Posted Sept. 23, 2012, at 5:05 p.m.

BRUNSWICK, Maine — Financial turbulence at Parkview Adventist Medical Center in recent years has nothing to do with a bid by Central Maine Healthcare to take the Brunswick hospital over, according to officials on both sides of the proposed acquisition.

In nonprofit 990 tax forms posted online, Parkview, with expenses of around $40 million, reported a loss of $2 million in 2009 and $840,000 in 2010, according to the most recent records available. In addition, Parkview Interim President Randee Reynolds said Parkview borrowed $5.6 million from CMHC four years ago when Parkview was “insolvent, basically.”

But Reynolds said Parkview posted a $1 million revenue surplus in 2011 — and he said in-the-black operations have continued so far this year — and is current on its loan payments to CMHC. Chuck Gill, vice president for public affairs for CMHC, confirmed both of those assertions.

“We have had losses in the last few years,” said Reynolds. “We’ve really turned the picture around.”

Reynolds said a major factor in the return to profitability was a recent electronic medical records project which has reduced costs and resulted in anticipated refunds from the state of almost $3 million, the second payment of which is due in November. He said the positive ledger stance was despite about $5 million the Maine Department of Health and Human Services owes Parkview from unpaid Medicaid claims that have accumulated at Parkview and other hospitals in Maine since 2009. Reynolds said Parkview still owes CMHC about $5.4 million of the $5.6 million loan and that the proposed merger between the two organizations would not erase the debt.

The merger between Parkview and CMHC, which is the parent organization of Central Maine Medical Center in Lewiston as well as Rumford and Bridgton hospitals, was approved unanimously by Parkview’s and CMHC’s board and is the subject of a state-level review known as a certificate of need application. Mid Coast Hospital, which like Parkview is also located in Brunswick, filed a competing certificate of need application last week that seeks to absorb all of Parkview’s operations into its Cooks Corner campus.

Mid Coast’s application argues that control over medical facilities in Brunswick should remain in Brunswick — not in Lewiston — and that its takeover plan would save the Brunswick area $24 million per year by eliminating redundancies in operations, staffing, administration and facilities overhead. Mid Coast President and CEO Lois Skillings has said that any reduction in jobs in Mid Coast’s plan could be accomplished through long-term attrition.

Reynolds said he and members of Parkview’s board have met with Skillings and considered Mid Coast’s proposal, but believe CMHC’s plan is better.

“Mid Coast Hospital has supplied us with their vision for health care in the Brunswick area,” said Reynolds. “We looked at Central Maine Healthcare and saw what they’ve done with Bridgton and Rumford. We want to be a part of that group.”

In an opinion letter published by the Bangor Daily News on Sunday, two Mid Coast Hospital physicians argued that a merger between Parkview and Mid Coast is best for the community. Jay Mullen, chief of emergency medicine and president of Mid Coast’s medical staff, and Jamie Rines, Mid Coast’s vice president of the medical staff, wrote that the Brunswick area is the smallest community in the northeastern United States supporting two acute-care hospitals.

“Together, by incorporating the major elements of both of their missions and cultures, Mid Coast and Parkview could find a new way together,” the letter says. “In doing so, they could eliminate the costly duplication of many systems, facilities and expensive technology.”

Tory Ryden, director of communications for Parkview, said Sunday that the doctors’ letter had some inaccuracies, including two points about finances: the amount of money Parkview borrowed from CMHC and the letter’s statement that Parkview is still operating at a loss.

“If Mid Coast is believing that there are millions of dollars in savings, why don’t they find the savings at their own hospital?” said Ryden, who reiterated that Parkview’s interest in CMHC has a lot to do with what that organization has done with the hospitals in Rumford and Bridgton.

Rumford Hospital had a revenue shortage of about $1 million in 2009, according to its nonprofit 990 filings, but was $4.6 million in the black in 2010. Bridgton Hospital performed well in 2009 and 2010, according to its 990s, with profits of $3.1 million and $7.6 million, respectively.

Mid Coast Hospital’s 990s showed revenue surpluses of $4.1 million in 2008 and $3.2 million in 2009 with operating expenses exceeding $100 million, in the two most recent years for which records were available at the website GuideStar.org. Central Maine Healthcare Corp. posted combined profits approaching $9 million in 2009 and 2010. Central Maine Medical Center, which is another CMHC subsidiary, had revenue shortages of $4.5 million in 2009 and $9.2 million in 2010 with expenses in excess of $300 million.

Gill said part of the reason for the merger proposal between Parkview and CMHC is that the two entities have had a relationship for several years in which CMHC provides administrative and medical services.

“We’ve gone quite a ways with the administrative services agreement so the next step is for them to be a full member of our system, we believe and the Parkview board believes,” said Gill. “That’s the next step, just as it’s happened all over the state of Maine. The trend is for hospitals to join larger health systems.”

Reynolds said one result of Parkview merging with either Mid Coast or CMHC is that Parkview Adventist Medical Center will lose its affiliation with the Adventist Church. Under the CMHC proposal the facility would become “Parkview Hospital,” with a local board of directors answering to CMHC’s board. Under Mid Coast’s, Parkview would cease to exist as a separate entity.

According to an Aug. 27 article in a publication called Adventist Today, Parkview’s affiliation with the Northern New England Conference of the Seventh-day Adventist Church is “the last Adventist hospital in this part of the world to stand alone without being affiliated with one of five Adventist healthcare systems in the country.”

Reynolds said despite the loss of the affiliation with the Adventist Church — the merger with CMHC would effectively dissolve Parkview’s board of trustees, which is made up of the church’s trustees — Parkview will continue with its faith-based mission for patients who want it.

“As far as the church base goes, they’re saddened that the Adventist name will be taken off,” he said. “There are lots of different religious organizations who come here and pray with or for our patients. Central Maine Healthcare is totally on board with that.”

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