BIDDEFORD, Maine — Southern Maine Medical Center and Goodall Hospital have completed their merger and are now known as Southern Maine Health Care.

The merger took effect on Jan. 1. The system has two acute care medical centers; the former SMMC in Biddeford, which is licensed for 150 beds, and the former Goodall Hospital in Sanford, which is licensed for 58 beds.

“This merger marks a huge step forward for health care in York County,” Ed McGeachey, the system’s president and CEO, said in a statement. “For nearly two years we have been working toward the launch of Southern Maine Health Care. By bringing together two great organizations, we have created a dynamic new health care system, ensuring that we will continue to provide high quality care to our communities for generations to come.”

The merger is another example of the consolidation going on in the health care industry. As hospitals face financial challenges — shrinking reimbursements from Medicare and MaineCare and increases in the amount of free care they provide — they’ve been seeking mergers like this one to save through efficiencies in purchasing.

McGeachey said in fiscal year 2014 payments to SMHC will be lowered by more than $4 million while SMHC will pay $33 million for free care and bad debt.

Southern Maine Health Care is a member of the large MaineHealth system, which is the parent of Maine Medical Center in Portland.

“SMHC’s larger scale and membership in MaineHealth enables us to achieve important cost savings so we can continue to provide excellent care, decrease the cost of providing care and sustain critical services,” McGeachey said.

SMHC has a medical staff of more than 200 people and provides care from more than 20 offices located in Biddeford, Kennebunk, Old Orchard Beach, Saco, Sanford and Waterboro.

Whit Richardson

Whit Richardson is Business Editor at the Bangor Daily News. He blogs about Maine business, entrepreneurs and the economy.