Community skeptical of hospital unification

By Jordan Bailey | Aug 30, 2017
Photo by: Jordan Bailey Glen Montgomery of Belfast calls the proposed unification with MaineHealth "a shotgun marriage" at a community forum Thursday, Aug. 24, at The United Farmer's Market in Belfast.

Belfast — Waldo County General Hospital staff and members of the community continue to resist the idea of unification with Portland-based MaineHealth. They aired their concerns at a community forum here Aug. 24.

Concerns about the proposed unification, which must be approved by the Coastal Healthcare Alliance governing board, revolve around loss of local control and financial independence. WCGH would have to give up $30 million to the cause, but proponents argue that the hospital would be protected from financial pressures in the long term.

Coastal Healthcare Alliance formed two years ago with the merger of WCGH and PenBay Medical Center. In October 2016, MaineHealth, with which both hospitals are affiliated, proposed an additional merger to create one entity from its network of 10 hospitals. Unification would give control of MaineHealth hospitals to a single governing board in Portland, and would combine the finances of all member hospitals in one balance sheet.

MaineHealth argues this would allow funds to be redirected from large medical centers, where lucrative surgeries and procedures are performed, to rural and community hospitals, which are predicted to face increasing financial pressure in the coming decade because they serve poor and aging populations whose care is not fully covered by Medicare and Medicaid.

Many small hospitals in the state are already feeling the strain, but Waldo County General Hospital is a major exception, and opponents are skeptical about the merger making financial sense for the hospital.

Coastal Healthcare Alliance Chairman Lee Woodward said,“Waldo beat the trend ... We have an investment account of $60 million. Pound for pound we are of the same financial strength of Maine Med.”

The board attributes the hospital’s success to former CEO Mark Biscone, who built a medical model used by hospitals across the state and made the controversial decision to obtain a critical access designation. Though the designation constrains hospital growth — it may not expand to more than 25 beds — it brings higher reimbursement rates from Medicaid, also known as MaineCare, and Medicare.

President and CEO of Coastal Healthcare Alliance Mark Fourre said the critical access designation results in WCGH making money instead of losing it. Its proximity to PenBay normally would have disqualified WCGH from the designation, but it was granted an exception.

The Coastal Healthcare Alliance board has been considering all options since MaineHealth first proposed the idea of unification, Woodward said, and has narrowed those options to two: unify or continue in their existing agreement on a decentralized basis, paying for MaineHealth services as they go.

"Loss of local control is probably the most important decision that Waldo County General Hospital, PenBay, or any hospital has addressed in the past 50 years," Woodward said.

WCGH has been affiliated with MaineHealth for the past eight years and Woodward called it “a good partnership.” But lawyers advised the partnership agreement includes many powers, over budget and major expenditures, that MaineHealth has not yet exercised, so the current arrangement could change in the future.

Another possibility — ending the partnership and joining with another network — would not be viable, he said, because technological adjustments needed to integrate with a new network would cost more than $15 million.

Through negotiations with the MaineHealth board, Woodward was able to ensure WCGH would keep $33 million of its $60 million in investment funds if it were to accept unification. MaineHealth Communications Director John Porter confirmed a restricted account containing $33 million would be designated for use only at WCGH. Woodward said the funding would cover construction of a planned new state-of-the-art emergency room, with enough left over that other capital improvement projects — including an imaging center — could be funded with interest earned on the estimated $25 million remaining in the investment account.

One aspect of the proposed agreement Woodward opposes is a five-year limit on a guaranteed seat for Coastal Healthcare Alliance on the MaineHealth board.

MaineHealth President Bill Caron said if each community in the network were represented, the board, at 25 or 26 members, would be too large. He said the board structure will be reevaluated in four years, and the future board ideally would have 15 members, with some representing rural communities.

However, community hospitals in the system would have opportunity for representation on any committee, including the budget committee. Further, he said, local boards would continue to play a role in credentialing, quality, needs assessments, fundraising, overseeing administrative staff and providing input for MaineHealth's annual budget.

During a question and answer period, the audience of more than 100 applauded for all comments opposing unification. The only person to speak in support of the proposal was Steve Ryan of Belfast, who said he worked “on the financial side” of health care for 30 years.

"It is just an overwhelming need for us to find efficiencies, to come together and to work together as a bigger health system,” he said. “You just cannot, in my mind, operate as a nice, small community hospital like it was in the old days. There are going to be major changes … I’d love the $60 million but it is much more important to look forward.”

WCGH Vice President of Medical Affairs Kent Clark, a panelist, noted that because of the hospital’s unique financial success and its ability to attract and retain qualified medical professionals, staff responding to a survey said they were concerned about the impact on workplace culture and on the hospital’s ability to provide a depth and breadth of services. Those speaking in opposition to unification shared similar concerns.

David Crofoot, a recently retired WCGH surgeon, said unification would make recruitment and retention difficult. “They’re going to feel like a cog in the great big wheel,” he said of medical staff. “The nurses and workers at the hospital feel that the imposition of orders from above from Portland for payroll or to talk about a problem is very frustrating because it’s not as familiar, it’s not as warm, it’s not as close as it used to be.”

Anna Woodcox of Morrill said, “We’re doing great, so why change it? I understand there’s $33 million at stake that will leave our community and go be distributed among other communities.”

Caron said he wanted to clarify the “misunderstanding” that millions from WCGH would be distributed to other hospitals.

"The total unrestricted cash and investment for the system is $850 million,” he said. “Others are putting in a lot more money than you are. You will have access to the $850 million, as opposed to the $30 million you have today.”

He also pointed out that WCGH would enjoy the same cross-guarantee of its debt as all other hospitals in the system.

Audience members expressed concerns about the complexity of medical billing and difficulty with Epic, the medical records systems in use by MaineHealth partners.

They also raised questions about the finances of other partner hospitals. Caron said financial information broken out by institution was available in the MaineHealth annual report on the organization's website, but The Journal could not find the information there.

When asked by email what other hospitals in the network would contribute toward unification, Porter responded, "The mechanism of unification does not call for MaineHealth members to 'contribute.' Rather, the assets and liabilities (debts) of member organizations will be combined on a single balance sheet. On that balance sheet, there will be funds that are restricted to specific purposes. For instance, charitable gifts given for a particular project will be used only for that project."

Toward the end of the two-hour forum, Belfast attorney Bill Kelley took the microphone and turned his back to the panel to address members of the Coastal Healthcare Alliance board in the crowd.

“I would like to tell you that I think the public who paid for that hospital are perfectly happy that, if you make mistakes in the future, you make those mistakes and that is fine. Make your good faith mistakes. But do not turn over the hospital to a group of folks from Portland. This is a two-step bloodless coup from my perspective … Go ahead and say no, get out of the alliance, reject unification, take what comes. If you give it up to the the state or to a large corporation you get exactly what you deserve.”

The audience erupted into enthusiastic applause.

The Coastal Healthcare Alliance board of directors will vote on whether to accept unification in October.

Comments (1)
Posted by: John E Marshall | Aug 30, 2017 10:40

The strength of WCGH through the years has been as a primary care hospital not trying to compete by acquiring expensive technologies to compete for secondary and tertiary care hospitals. It has done what ir does well. Systems are the way healthcare is going. Recruitment will not be a problem as the majority of them now work in vertically integrated systems and work on salary. I have great personal respect for all of the quoted speakers but they are being provincial and lacking in understanding of how healthcare works. Integration is the name of the survival game now. I've been involved in healthcare at all levels over the past 50 years and still do quality improvement for systems. I was comfortable getting care at WCGH when I had a heart attack but when to Portland when I needed a bypass. One of WCGH strengths has been that Mark Biscone was smart enough to integrate the free standing community health centers in Waldo County into affiliation with WCGH. Anna and Bill are blowing smoke.

If you wish to comment, please login.