ELLSWORTH, Maine — Maine Coast Memorial Hospital is considering joining Eastern Maine Healthcare Systems, a move that would mark the end of the Ellsworth hospital’s nearly 60 years as an independent organization.
Maine Coast Memorial and Brewer-based EMHS, the state’s second-largest health system, signed a letter of intent Monday, according to a joint news release the organizations issued Tuesday. The letter binds EMHS and Maine Coast to exclusive negotiations but remains the first step in reaching a final deal.
“It opens up the door to allow us to discuss what this next relationship will look like,” Suzanne Spruce, a spokeswoman for EMHS, said.
The 64-bed facility, opened in 1956, would become the ninth hospital in the EMHS system, which also includes nearby Blue Hill Memorial Hospital as a member.
Terms of the deal have not been disclosed. Discussions began about a year ago, Spruce said.
Finances were one factor in the hospital’s decision to explore joining EMHS, according to Patricia Patterson King, a spokeswoman for Maine Coast. Costly health care infrastructure, including electronic health records, has become increasingly difficult for small, independent hospitals to afford and maintain, she said.
Maine Coast expects to post an operating loss this fiscal year, which will total “substantially more” than the $375,470 in red ink it recorded last year, she said.
Beyond the potential financial benefits, Maine Coast also expects to adopt EMHS’ system for electronic health records and its remote-care services, such as telemedicine. EMHS has made clear it plans to expand access to high-quality care in Hancock and Washington counties, King said.
“While we are financially sound, this is an investment in our future,” she said.
If finalized, the deal is not expected to affect staffing at Maine Coast, King said.
“Change is occurring at every hospital in the nation,” Adin Tooker, chair of the Maine Coast Memorial Hospital Board of Trustees, said in the release. “Looking ahead, it will be harder than ever for Maine Coast Memorial Hospital to thrive without a partner. We made this strategic decision now while we are able to evaluate our choices from a position of strength and have the time to conduct a thoughtful and thorough review on our own terms.”
Maine Coast already has a relationship with EMHS, including shared oncology staff with Eastern Maine Medical Center, the system’s flagship hospital in Bangor. The Ellsworth hospital also participates in EMHS’ “accountable care organization,” a health care model outlined under the Affordable Care Act that rewards hospitals financially for keeping patients healthy at less cost.
Both organizations described a potential merger as a “natural next step.”
“The EMHS model is to provide access to high-quality services close to home for the
populations we serve, making Maine Coast a perfect fit,” M. Michelle Hood, president and CEO of EMHS, said in the release. “The two organizations have long enjoyed a great working relationship and I personally have high regard for Maine Coast, its leadership, and quality of care delivery.”
As an EMHS member, the Ellsworth hospital also would step up collaboration with Blue Hill Memorial, Spruce said. Already, mothers who see midwives and caregivers at Blue Hill deliver their babies at Maine Coast, she said.
“EMHS remains strongly committed to Blue Hill and to Blue Hill Memorial Hospital,” Spruce said.
Integrating the Ellsworth hospital would allow the organizations to better plan a strategy to meet the health needs of the region, Spruce said. EMHS, Maine Coast and Blue Hill could expand partnerships among the medical staffs and caregivers, recruit additional physicians and strengthen services throughout the area, the news release stated.
“Working together with EMHS, more patients from Hancock and western Washington counties can access and receive care in their own communities than is possible
today,” Charlie Therrien, president and CEO of Maine Coast, said in the release.
In Maine and throughout the country, independent hospitals struggle to access the capital and resources they need to survive, said Andrew Coburn, a rural health expert and chairman of the master of public health program at the Muskie School of Public Service at the University of Southern Maine. Along with expensive electronic health records systems, hospitals need funds to update and improve their facilities, he said. Many are turning to big health systems for help.
“It’s certainly a trend, which frankly reflects the financial challenges and uncertainties that independent hospitals face,” he said.
A deal with Maine Coast would mark the second acquisition for EMHS in the last year. In October, the system added Portland’s Mercy Health System of Maine as a member.
Such mergers raise questions about the benefits to the acquiring systems and their surrounding communities, Coburn said.
“What’s the advantage to EMHS of this kind of arrangement?” he said. “Why are these systems acquiring, in many cases, hospitals that are in distress?”
As health systems pursue more regionalized approaches to inpatient and outpatient care, many are grappling with what services to maintain and at which hospitals, he said.
“There’s way too much duplication of services across the [health care] system, which is costing a lot of money,” he said.
Confidentiality agreements associated with the letter of intent prevent EMHS and Maine Coast from further comment, the release stated.
EMHS and Maine Coast will enter exclusive discussions over the next 60 to 90 days, in the hope of reaching a definitive agreement. A state and federal regulatory approval process, expected to take at least six to nine months, would then follow.
Correction: This story has been updated to correct an erroneous figure provided by Maine Coast Memorial Hospital for its operating loss last fiscal year. The loss totaled $375,470, not $1.4 million, as the hospital previously reported.