Mayo officials aim to keep as many local services as possible post-merger

DEXTER — Mayo Regional Hospital officials told community members Monday night, April 1 they are working toward a goal of keeping as many medical services in the region as possible as part of a proposed merger with Northern Light Health, a statewide system comprised of hospitals across Maine.

In February directors of HAD 4, the quasi-municipal entity that owns and oversees the Dover-Foxcroft hospital, voted 15-3 to proceed toward a merger agreement. Last month Northern Light directors unanimously approved the merger. In order for the agreement to proceed state regulators must approve the deal and under the merger terms the Legislature must also agree to eliminate the HAD 4 charter.

Observer photo/Stuart Hedstrom
COMMUNITY FORUM ON FUTURE OF MAYO — Mayo Regional Hospital President & CEO Marie Vienneau opens a community forum on the proposed merger between the hospital and Northern Light Health on April 1 at the Ridge View Community School in Dexter. The session was the first of four held throughout HAD 4, with the second in Dover-Foxcroft on April 2 and others set for 5:30-7:30 p.m. on Tuesday, April 9 at the Guilford Methodist Church and Thursday, April 18 at the Penquis Valley School in Milo. At the panel with Vienneau are, from left, HAD 4 Board Chair Amanda Thomas, Mayo Inpatient and Emergency Department Director Dr. David McDermott, hospital Vice President of Finance and CFO Nancy Glidden, Northern Light Health Deputy General Counsel George Eaton and Northern Light Health Chief Physician Executive Dr. Steven Berkowitz.

About three dozen people gathered at the Ridge View Community School for the first of four public forums on the merger asked officials specific questions about possible reduction of services, including Mayo losing its obstetrics department as has happened at other rural Maine hospitals.

Mayo Inpatient and Emergency Department Medical Director Dr. David McDermott said there is a guarantee to provide obstetrics services for five years in the merger proposal, but he said nothing is guaranteed beyond a half decade.

“We believe this merger will be a way for us to maintain our viability and capacity,” he said. “Can we guarantee, absent the merger, we could continue to offer that strong service?”

Dover-Foxcroft resident John Heretakis, who works at the Dexter House of Pizza, wondered if any existing programs would be cut under the merger.

“I would have to say we have already lost some programs,” Mayo Regional Hospital President & CEO Marie Vienneau said. “I had to let a psychiatrist and a pediatrician go and we closed Guilford Medical Associates. Those have nothing to do with the merger but retaining and recruiting providers are challenges.”

“We are hopeful to keep many accesses to services here,” she added.

“Putting a network together like this only gives us the best options to keep the services we have but also to expand our possibilities,” Northern Light Health Chief Physician Executive Dr. Steven Berkowitz said. “It gives you the best shot of having more services here — my mantra is keep it at Mayo as long as it’s safe.”

“We are here to present what we believe is the most promising path forward,” Vienneau told attendees to start the forum in the school cafeteria. Hospital officials had cited Mayo’s progressively worsening financial situation as motivation for partnering with a larger organization.

HAD 4 Board Chair Amanda Thomas of Guilford said the district is the last of its kind in Maine, founded in 1974 by the Legislature with 11 member communities and now at 13 with the addition of Dexter and Milo. Thomas said the board of directors has 19 members representing each of the 13 towns and the group meets monthly with sub-committees meeting as well.

Thomas said the planning board first addressed the possibility of some kind of merger and in late 2015 requests for proposals were sent out. Two proposals came in, one from Covenant Health — which oversees St. Joseph Hospital in Bangor — and the other from Northern Light (Eastern Maine Healthcare Systems at the time). In July 2016 the directors unanimously voted to sign a letter of intent and in March 2017 they signed an interim affiliation agreement.

She said the vote to proceed with the merger was taken a month and half ago and more information is at https://mayohospitalfacts.org/.

“Most alarming to us is the closing of 102 rural hospitals [nationally] since 2010, including three in Maine,” Thomas said. “We believe in order for Mayo to continue to provide high quality care for our region we must merge with a larger organization.”

Mayo Vice President of Finance and CFO Nancy Glidden said the hospital has been experiencing operating losses since 2010 and over the last three years the deficit has averaged $1.6 million annually. “This year through February, five months, we have incurred an operating loss of $1.5 million already, obviously our goal is to reverse that,” Glidden said.

“Unusually extraordinary expenses and trying to catch up all year,” Glidden said are reasons for the operating losses. She also mentioned operating costs exceeding revenues.

“You may wonder what has changed since 2010,” she said. “One of the key things that hurts us is on the net revenue side of things.” She explained that Medicare and Medicaid do not pay the hospital the full costs of care and “insurers are fighting all the time also to improve their lot and employers for sure.

“For us as a small hospital we have very little say to negotiate that. We think in a system environment we can do better.”

Glidden said with six rural health centers part of Mayo Regional Hospital, three ambulance services and a number of providers and staffing challenges to attract applicants, the hospital has many costs. “The cost of it is high for us because really we need to attract people who really would like to go elsewhere,” she said about the rural location.

“We hope in an affiliated or merged environment Northern Light could really help us with staffing,” Glidden said. She said the hospital may still not have everything post-merger but “we feel we would have a much better shot at providing staff at affordable prices.”

“These are not one-time bad years, this is a continuous trend and we already feel we are very fragile,” Glidden said. She mentioned the possibility of a provider leaving or three employees in one department going on maternity leave as examples of potential financial hindrances.

She said at the end of 2015 Mayo had enough money in operating costs to cover 43 days of operations. In the next few years this total dropped to about 20 days and now it is at a negative number. “We are seeing a downward trend in that cash,” Glidden said.

She said cash is needed to pay for equipment and the principle of debt, about $800,000 annually with interest putting the figure over the $1 million-mark. “We have been implementing strategies but we are still where we are, we haven’t moved that needle.”

Dr. McDermott said about 15 years ago there was fear that Eastern Maine Healthcare Systems would come into the region and try to take over. He said more recently he has met with Northern Light officials and representatives from Northern Light Maine Coast Hospital in Ellsworth, the most recent addition to the healthcare system, and heard positive feedback.

Dr. McDermott said Mayo staff have been polled and “overall the vast majority of the medical staff are in support of the transition.”

He said already Mayo shares a number of services with Northern Light, including oncology, surgical podiatry, OB-GYN, radiology, and psychiatry.

Dr. McDermott said the hospital is trying to recruit a general surgeon and this could help others in the region, such as someone in Greenville suffering an acute appendicitis could come to Dover-Foxcroft for the procedure rather than traveling twice as far to Bangor. Under “shared hospitalization” the patient could come back to Mayo to recover rather than staying in Penobscot County.

“Northern Light is a non-profit, tax-exempt organization,” said group Deputy General Counsel George Eaton. “Really what we are, I would call us a regional healthcare system,” he said, mentioning most of the facilities are east of the Kennebec River.

He said about 20 years ago the system was just Eastern Maine Medical Center in Bangor but officials decided it needed to be a group of community hospitals. “If we all worked together we could sustain our healthcare system for our region,” Eaton added.

“It really is important to understand as a non-profit charitable our mission is to partner with communities to improve health and well-being throughout Central and Eastern Maine,” Eaton said. He said the mission is not to make as much money as possible but “where we will survive is keeping care as close to home as possible and be as cost-effective as possible.”

For most rural towns the hospital is among the most vital components, Eaton said. “If you lose the hospital, you lose the community,” he said. “We would not do this with any community hospital, we are discerning. The thing we like about Mayo No. 1 is the location. The other thing we like about Mayo, and I can personally vouch for this because I have been working on this for two years now, is the culture.”

Rich Pfirman of Dexter wondered about the impact of the merger on the ambulance service.

Vienneau said about a decade prior Mayo took this over from the town of Dexter. She said what is envisioned is a regional service between Mayo and current Northern Light ambulances through Northern Light Sebasticook Valley Hospital in Pittsfield and Northern Light C.A. Dean Hospital in Greenville.

“We are the best option for the ambulance service and we don’t envision Northern Light changing that,” Vienneau said.

Sangerville Selectman Mike Wark said “the charter is probably the bone of contention for most citizens I talk to.” He asked, “What is the board’s plan if you don’t get the Legislature to circumvent the current charter?,” wondering if there would be the opportunity for HAD 4 residents to vote on any plans.

Thomas said discussions are underway with legislators. “That’s the process we are working on right now,” she said.

The next question asked if the directors would tax the HAD 4 communities, a provision allowed in the charter.

“Mayo was created as HAD 4 and we have had that authority since 1973 but we have never used it,” Thomas said. “If we cannot accomplish this merger the tax payments would go out starting in 2020. We are hoping this is not necessary and the board has not voted to do that, we will be discussing that at our meeting in September.”

Each HAD 4 community would pay a percentage of $1 million-plus based on its valuation to cover hospital debt service. Dexter Town Manager Trampas King said his community’s share would add about $0.7 mills to the tax rate, corresponding to a $70 increase for a $100,000 assessed property.

Dr. McDermott asked if Northern Light has ever closed a hospital and after getting a no response he admitted he knew the answer. “We don’t want that to happen with Mayo and that’s why we are talking with you the communities,” he said.

Another question asked if HAD 4 towns could vote on any merger. Eaton said he has spent a great deal of time reviewing the charter and the document “does not talk about what rights the towns or the residents have with a merger transaction.”

He said the board is given broad authority, including authorizing a merger.

“The charter does say if the district is dissolved then this can only happen upon a special town meeting called for that purpose by each of the member towns,” Eaton said. “Each of the 13 towns would have to vote affirmatively to dissolve the HAD.”

“The Legislature created the charter, the Legislature has amended the charter on more than one occassion,” he said as the Legislature would vote on any charter amendments concerning the proposed merger.

“I agree maybe the right thing to do is have some sort of vote to see what the community wants,” Eaton said.

The second community forum is set for April 2 in Dover-Foxcroft with others to follow from 5:30-7:30 p.m. on Tuesday, April 9 at the Guilford United Methodist Church and Thursday, April 18 at the Penquis Valley School.