A move by Eastern Maine Healthcare Systems to plant stakes for the first time in southern Maine through a merger with Mercy Health System is raising questions about how the deal will affect patients.
Mercy has signed a letter of intent to merge with Brewer-based EMHS after a planned deal with Steward Health Care System, a for-profit Massachusetts hospital chain, fell through.
Neither Mercy nor Steward commented publicly about why the deal collapsed, but a Steward spokesman accused Mercy of misrepresenting its financial health in a confidential memo obtained Monday by The Boston Globe.
Mercy, which runs the 230-bed Mercy Hospital in Portland, had been trying since August to reach a deal with Steward.
The move sparked curiosity about why EMHS, parent organization to Bangor’s Eastern Maine Medical Center, wants to expand its reach beyond its territory of northern, central and eastern Maine. The merger also would bring EMHS into the backyard of MaineHealth, parent of Maine Medical Center, Mercy’s main competitor in Portland.
“What purpose does it serve, other than to help Eastern Maine grow, and is that in itself a good thing for the people they’re supposed to be serving?” said Philip Caper, a Brooklin physician who serves as one of roughly 200 EMHS “corporators” on a volunteer board.
The parties have remained largely mum.
“We’ve got a confidentiality agreement associated with the joint nonbinding letter of intent, so we’re going to honor that and look forward to speaking publicly on the status of things as soon as we can,” said Susan Rouillard, Mercy’s chief development and communications officer, who didn’t indicate when that might occur.
The letter of intent allows Mercy and EMHS to negotiate exclusively with each other, but doesn’t commit them to finishing a deal.
EMHS also largely declined to comment, except to reiterate that Mercy would maintain its Catholic identity. If the deal goes through, Mercy would be the only Catholic hospital organization in Maine to become a member of a secular hospital organization.
“We have agreed that, should this be successful, we would respect their ethical and religious doctrine and understand their need to remain a Catholic hospital,” said Suzanne Spruce, director of community relations for EMHS. “We welcome that, we can work with that.”
Catholic hospitals operate under ethical and religious directives issued by the U.S. Conference of Catholic Bishops. The directives outline wider missions such as caring for the poor and vulnerable, as well as controversial prohibitions against abortion under any circumstances, contraception, vasectomies and tubal ligations, and many infertility treatments.
Nationally, in some cases, deals between religious and secular health organizations have led to a loss of those services, said Lois Uttley, director of MergerWatch, a New York City nonprofit that monitors such deals and advocates for policies that support patients’ beliefs.
“We have seen in the past situations in which even when the Catholic hospital is in the weaker position financially, it still demands certain things from a non-Catholic acquirer,” she said. “Promising never to do abortions, restricting other reproductive health services, contraception, sterilization.”
While mergers between Catholic and secular health organizations have become increasingly common, acquiring organizations are under no obligation to deliver services any differently, said Philip Boyle, vice president of mission and ethics for Catholic Health East, Mercy’s parent organization, which is itself in merger talks with a Michigan health system.
“Fundamentally, the [secular organization] doesn’t have to change, that’s the long and the short of it,” he said. “Unless by agreement they decide to do that. We don’t see that as an issue in the Maine talks at all.”
Pennsylvania-based Catholic Health East operates 35 acute care hospitals across the Eastern Seaboard.
It remains to be seen how the deal would affect Mercy’s charitable mission and the level of free care the hospital grants to patients who can’t afford treatment, said Joe Ditre, executive director of Consumers for Affordable Health Care, an advocacy group.
Merging with EMHS, a larger organization, could allow Mercy to invest in upgrades, such as staffing and expanded emergency room hours, Ditre said.
Mercy has lost money for the last three years.
“On the other hand, in many cases, hospital consolidations in Maine have led to higher prices and not much better care,” he said. “So, we are hopeful — and watchful.”
Many patients prefer to get their care at Mercy because they feel it is more individualized and sensitive to their needs, Ditre said.
Caper said he was relieved that the Steward deal fell through because he didn’t want to see Mercy become a for-profit operation. But, like Ditre, he also expressed concern that EMHS competing directly with MaineHealth could duplicate health services in the Portland area and lead to higher health care costs.
“When you get these two gargantuan health care systems, MaineHealth and Eastern Maine, fighting over turf, the way they have done that in the past is to conduct an arms war,” he said. “They both try to acquire the best doctors, the best technology.”
Caper wondered how the Mercy merger fit into EMHS’ mission and how the potential impact on the community would be taken into account.
“Are they looking at Mercy as a way to feed into the Eastern Maine system or are they willing to refer people just as quickly and easily to MaineHealth?” he said.
Caper is a columnist for the Bangor Daily News and a founding board member of Maine AllCare, a nonprofit group committed to universal, affordable health care.
Had the Steward deal been inked, Mercy would have become the first acute-care hospital in Maine to be owned by a for-profit company. Both EMHS and Mercy are nonprofit organizations.
EMHS is the parent company of seven hospitals in Maine and also operates several nursing homes and hospice organizations.
The Mercy system operates two hospital campuses on State Street and Fore River Parkway in Portland, as well as VNA Home Health Hospice in South Portland, an addiction treatment center in Westbrook, and primary and urgent care centers.
The next step for the two organizations is to reach a definitive agreement, followed by winning state regulatory approval. The deal also would need the green light from the Vatican.
Both parties hope to reach a definitive deal by the end of the year, according to Spruce.