Mayo board vote is next step in Northern Light Health merger process
DOVER-FOXCROFT — On Wednesday night Feb. 27, following months of due diligence, planning, and gathering public input, the board that oversees Mayo Regional Hospital (Hospital Administrative District 4) plans to vote on a non-binding merger agreement with Northern Light Health, a statewide health care system. At its Feb. 19 meeting, the board’s Executive Committee decided to place the vote on the agenda for the upcoming board meeting next week, citing Mayo’s progressively worsening financial situation, and the reality that Mayo Regional Hospital needs to partner with a larger organization.
“We began these discussions several years ago and have more recently been negotiating the details of a formal merger agreement with Northern Light Health,” said Mayo Regional Hospital Executive President and CEO Marie Vienneau. “After years of discussions and seeing other small, rural hospitals facing financial struggles that are comparable to ours, we think that this is an absolutely necessary step to protect quality care for people in this region. Northern Light Health has relationships with other rural hospitals in our state, and we have all worked hard to find the best possible scenario for the people we serve. We feel that the agreement we will be voting on next week is the best possible scenario for the future of our hospital and the communities it serves.”
Similar to Northern Light Health arrangements with other hospitals, Mayo and its clinics would remain open under the merger, and providers could continue providing quality care to people living in Piscataquis County.
“Because this hospital is owned and operated in the form of a Hospital Administrative District, the board is comprised of members who are elected by the communities we serve,” Vienneau said. “The HAD is a quasi-governmental entity with taxing power and as such is the only HAD left in Maine. The effect of the merger would be to transform the HAD into a Maine charitable tax-exempt nonprofit corporation that would have a community-based board, but would not have taxing authority–in effect relieving the towns in the HAD from potential liability for the certain indebtedness of the hospital. Northern Light Health has been sensitive to the needs both of our board, and the rural health care needs of the people in this region. I am confident that people who have visited Mayo Regional Hospital in the past will continue to see the highest quality of care should the board vote to approve the merger.”
The board vote will not be the final step, as the state charter for HAD 4 will need to be changed by the Maine legislature for the merger to be permitted, like the process followed by other HADs in years past. Also, the Northern Light Health Board would need to approve the agreement, which enables further due diligence of clinical and business models in advance of any closing transaction. Finally, a state review of the merger would be required through a formal Certificate of Need application and analysis process. These multiple steps provide additional opportunities for all stakeholders to examine the proposed restructuring.
“We are seeing a real struggle nationally with rural hospitals trying to stay independent,” Vienneau said. “Locally, we have just seen it with Penobscot Valley Hospital in Lincoln declaring bankruptcy last month. The original model Mayo Regional Hospital was established under is not as sustainable as it was 40 years ago. With this potential agreement with Northern Light Health, we can feel comfortable that quality local care will stay in this area.”