January 20, 2020
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EMHS chief: Mercy merger not about competing for patients with MaineHealth

Troy R. Bennett | BDN
Troy R. Bennett | BDN
Mercy Health System of Maine will be absorbed by Eastern Maine Healthcare Systems.

PORTLAND, Maine — The CEO of Brewer-based Eastern Maine Healthcare System, which is entering the southern Maine market for the first time, on Friday said she’s not interested in competing for patients with MaineHealth, the parent of Portland’s Maine Medical Center.

Though industry watchers claim EMHS’ merger with Portland’s Mercy Health Systems of Maine will place it in direct competition with MaineHealth, the largest health care system in the state, M. Michelle Hood, EMHS’ CEO, said the Mercy merger is “not intended to bring patients out of Portland and take them to Bangor.

“We believe in care close to home,” Hood told the Bangor Daily News on Friday. “If it was my mom who lived in Portland and got her primary care at Mercy and needed something that Mercy didn’t have, but MaineHealth had, I’d say go to MaineHealth. They’re a quality provider. So it’s not about moving patients.”

In fact, Hood said she hopes to grow EMHS’ existing collaborative relationship with MaineHealth.

EMHS, parent of Eastern Maine Medical Center in Bangor and six other hospitals in northern and eastern Maine, announced in December it would seek to absorb Mercy Health System of Maine, parent of Mercy Hospital in Portland, into its system. The state approved the health care systems’ Certificate of Need this week, which was the last significant hurdle to cross. EMHS and Mercy held an event at Mercy’s Fore River campus on Friday to celebrate.

Regardless of intention, however, competition is a reality. When pushed on the question of whether EMHS entering the southern Maine market will increase competition with MaineHealth, Hood said: “I don’t know. We’ll see what happens. Health care today … you don’t know one day to the next what the landscape will look like, but it’s certainly not the intent.”

EMHS was not looking to move into southern Maine before Mercy approached the company about a merger, according to Hood. Currently, the most southern hospital in EMHS’ network is the 48-bed Inland Hospital in Waterville, located 74 miles from Mercy Hospital.

When Mercy, which was a member of Pennsylvania-based Catholic Health East, reached out to larger health care systems in Maine to advertise the fact it was searching for a new parent, MaineHealth was included on the list, according to Eileen Skinner, Mercy’s CEO.

“The difficulty with MaineHealth is that the antitrust aspect and the Federal Trade Commission approval of that would have been almost impossible,” Skinner told the BDN.

Mercy negotiated briefly with Steward Health Care System, a for-profit Massachusetts hospital chain, before those talks fell through in late 2012.

EHMS was attracted to the Mercy merger for two reasons, according to Hood. The two systems’ boards shared the same vision for what’s known as the “triple-aim approach” to health care, which is intended to shift the focus from illness care to wellness care by providing more coordinated care for individual patients, giving more attention to at-risk populations, and doing it all at reduced cost by driving waste out of the system, Hood said.

In addition, it adds economies of scale to the EHMS system, lowering costs for supplies and other products and services, Hood said.

Mercy has suffered some financial difficulties the last few years, beginning with the construction of the Fore River campus just before the recession began. EMHS will become the guarantor of Mercy’s $73 million debt obligations. But the financial challenges did not deter EMHS’ board, according to Hood.

Hood said the entire health care industry is facing challenges with reduced payments from Medicare and Medicaid, dropping patient volumes and the uncertain economic conditions.

“It certainly is a very difficult job these days to make these books balance,” Hood said. “So I won’t say there won’t be challenges, but they’re not challenges we shy away from. I think there have been many good investments here in the Mercy community that have the capacity to contribute very significantly not only to the quality of care, but to the financials of the organization.”

Hood also clarified that the $115 million that it has been reported that EMHS will “invest” in Mercy’s operations, including consolidating the hospital at its Fore River campus, will not come from EMHS’ coffers. Instead, it will come from the anticipated savings that Mercy expects to realize from the merger, according to Hood.

Mercy does not expect to make any layoffs as a result of the merger, according to Skinner.

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