December 05, 2019
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7 towns approve Dover-Foxcroft hospital’s proposed merger with Northern Light Health

Stuart Hedstrom | Piscataquis Observer
Stuart Hedstrom | Piscataquis Observer
Mayo Regional Hospital in Dover-Foxcroft.

More than halfway through the process, seven of eight communities in Hospital Administrative District 4 have given approval to the proposed merger between Mayo Regional Hospital and Northern Light Health, a statewide system composed of hospitals across Maine.

The non-binding town meeting votes on the plan have been scheduled across a dozen HAD 4 communities from April 20 to 30 to help area legislators make a decision on submitting a bill to amend the hospital district charter to pave the way for a merger.

Residents of Dover-Foxcroft and Willimantic became the latest towns to approve the plan. As part of the annual town meeting on Saturday, residents in Dover-Foxcroft approved the plan via a count of 136-7 at the annual town meeting and that same day a similar question passed 11-8 at a Willimantic special town meeting.

A majority of residents in Abbot and Monson approved the proposal via respective special town meeting votes of 23-13 and 20-6 Thursday evening.

[Dover-Foxcroft hospital officials say Northern Light merger is crucial for survival]

The Dexter Town Council unanimously approved the plan April 11. In Bradford, the tallies were 20 residents in favor and one opposed April 22.The next night the measure passed 25-0 in Milo.

Cambridge is the lone community to reject the merger plan in a 22-12 vote at the first of 12 special town meetings April 20.

In February, directors of HAD 4, the quasi-municipal entity that owns and oversees the hospital, voted 15-3 to proceed toward a merger agreement. Last month, Northern Light directors unanimously approved the merger. Those involved have cited finances and a continuation of services — such as primary care, inpatient, OB, ER, ambulance and oncology — as key reasons for pursuing the merger.

At several public forums earlier in the month, Mayo Vice President of Finance and CFO Nancy Glidden said the hospital has been experiencing operating losses since 2010, and over the past three years the deficit has averaged $1.6 million annually. She said the hospital has incurred an operating loss of about $1.5 million through the first five months of the fiscal year, and this could project to about $4 million by year’s end.

During the Thursday night meeting at Abbot’s town hall, Rep. Norm Higgins, I-Dover-Foxcroft, explained he; Reps. Paul Stearns, R-Guilford, and Steven Foster, R-Dexter; and Sen. Paul Davis, R-Sangerville, started meeting with Mayo Regional Hospital officials in November as well as meeting with other legislators in Augusta.

Higgins said the merger proposal calls for a five-year agreement between Mayo Regional Hospital and Northern Light Health, including a continuation of clinical services for the next half decade.

“It’s not a guarantee but it gives us some assurances core services will be here for a five-year period, after that — like anything with health care — who knows,” he said.

[Northern Light board approves merger with Dover-Foxcroft hospital]

He said the HAD 4 charter describes the process for dissolving the district but there is not language for a merger. Higgins said he was involved in the formation of what is today Mayo Regional Hospital more than four decades ago, and “they never envisioned a merger at the time; I know I didn’t envision a merger at the time.”

When asked, Higgins said the final decision on a charter amendment to allow the merger to happen would be made in Augusta. “It will eventually be the Legislature and it would take a bill to go through the committee process with a public hearing,” he said. Higgins said should the bill proceed out of committee it would go to a vote in the House and Senate.

Not everyone favors the merger.

“I can tell you HAD 4 is pulling the wool over our eyes,” Cambridge Select Chair Michael R. Watson said several days after the Somerset County community’s 22-12 vote against the merger plan. “They have $26,411,877 in liquid assets, and they are trying to say they are millions of dollars in debt.”

[Dover-Foxcroft hospital needs legislation to merge with Northern Light without towns’ votes]

Watson said the $26 million could enable the hospital to finance itself for at least six years before there is a need to levy any taxes on the 13 member communities to pay for debt.

“It’s a mess. The board of directors tried to sidestep the charter that brought HAD 4 into existence; they are trying to change without talking to us,” he said. He added that after pressure there were the public forums, but the closest session to Cambridge was held in Guilford.

“If the citizens of the district wake up and read the facts they will see they are being hoodwinked,” Watson said. “It’s hard for citizens to get the facts; they are getting an opinion.”

Watson said should the merger proceed, the $26 million in liquid assets and about $51 million in hospital real estate would be handed over from the HAD 4 member towns to Northern Light Health.

“That’s a lot of money to these little communities,” he said. “We need to hold on to our assets.”

Mayo Vice President of Finance and CFO Nancy Glidden disputed Watson’s statements, saying she and others at the hospital would never specify financials in terms of liquid assets, but if this term was used then the only current liquid assets are about $10 million in liability. She said the hospital has about $9 million in long-term debt through the end of March in addition to accounts payable and accrued payroll. Glidden also disagreed with Watson’s figure of $51 million in hospital real estate, saying this would be the purchase value and does not include depreciation which puts the book value at approximately $16 million.

 

Correction: An earlier version of this report misspelled Cambridge Select Chair Michael R. Watson’s last name.


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