At a special meeting of the St. Andrews Auxiliary in August, LincolnHealth CEO Jim Donovan presented a picture of the future of healthcare for Lincoln County by walking the group back through history to draw a timeline of changes to healthcare over the past 100 years. Donovan reminded the audience that "managed care," defined as a health care delivery system organized to manage cost, utilization, and quality, made its debut in the 1920s in reaction to employers seeking benefits for employees, care providers wanting more patient revenues and consumers demanding access to better and more affordable healthcare. In 1929 and 1939 respectively, Blue Cross and Blue Shield were launched, giving birth to the insurance industry.

The following decades saw a steady proliferation of commercial healthcare plans which, unfortunately, did not always reflect altruistic motives.

Fast forward 50 years. Collaboration among doctors, hospital board trustees and administrators has always been a hallmark of medical care in Maine and in the early 1990s, Maine's hospital CEOs met in Bethel to discuss the nationwide trend toward managed care and look at how that “wave of change” would affect the delivery of quality health care services to the rural communities of Maine. In what was described by Donovan as a "watershed moment," consultants were brought in to consider the efficacy of small independent hospitals in addressing identified gaps and wasteful excesses in services.

The outcome was the development of three umbrella organizations, MaineHealth, Eastern Maine Medical Center and Central Maine Healthcare, that would encourage the 40 or so independent hospitals of Maine to join a cooperative network that could cover the state to meet the needs of the population and allow struggling rural services to survive, as had been done in other places.

MaineHealth was born of the merger between Brighton Hospital and Maine Medical Center in 1995. St. Andrews Hospital, established in 1908, was still operating independently at that time but was managed, for better or worse, by Quorum Health Resources, a "for profit" management company. In 1996, St. Andrews Hospital made the choice to become the first organization to join the MaineHealth System and was closely followed, within six months, by Miles Memorial Hospital.

From its early beginnings as Maine Medical Center Foundation, MaineHealth evolved into a loose confederation of 12 member organizations making it the state's largest integrated health system. As such, the members are responsible for their own financial survival but benefit by the sharing of resources and ideas that have lead to better quality of care standards, a focus on best practices, and a more strategic approach to addressing the best interests of the communities they serve.

"We have watched MaineHealth evolve and have had seats at the table; we have had a part to play in their development," said Donovan. He explained that the decentralized shared model of governance has lead to many clinical and administrative improvements, including the recent integration of Epic, an electronic health record system that allows doctors and nurses to track, in real time, a patient's medical history across the spectrum of care leading to better and more efficient clinical treatment and lower operating costs. Patients can access their own record to track medications or write notes to their doctors.

Despite this forward momentum, government policy changes and the out of control insurance industry have seemingly conspired to wreak havoc on member organizations in MaineHealth and across the nation in other healthcare systems. The nature of the loose association is no longer as viable as it was two decades ago as costs are rising, the population is aging and reimbursement from government programs is in jeopardy. The payer mix ratios of Medicare, Medicaid, private insurance and self pay hurt smaller facilities as the population ages and government payments are reduced. Hospitals are placed in the position of shifting costs to private insurance carriers as charitable care increases, driving up the cost of care so that those who have a choice go elsewhere for their medical needs. In the current MaineHealth system there is no mechanism for the financial bolstering of struggling members.

To address this vicious cycle, about one year ago MaineHealth began a dialogue with its member organizations about forming a more unified system that would operate with a single board, a single set of financials and a single management structure to create more cost savings for all members and enable money to flow in either direction between smaller hospitals with limited services and larger, more specialized hospitals that are experiencing growth as surgeries and more complex procedures are funneled to them by rural community organizations.

At this juncture one might question why the largest hospital in this system, Maine Medical Center, would have an interest in helping to financially sustain smaller members situated in rural communities. Part of the answer, according to Donovan, is that MaineHealth is a values driven organization committed to the mission of "working together so our communities are the healthiest in America." (https://mainehealth.org/about/our-values) It is in the best interest of larger hospitals to maintain a close symbiotic relationship with small, rural organizations which can focus on keeping their local populations healthy so that a wider range of quality services will remain available to all in the larger, more specialized facilities.

Donovan went on to describe LincolnHealth as "the little engine that could" as the organization strategically "nips and tucks" and enhances wherever it can to continue providing quality healthcare in the face of diminishing revenues. In fact, LincolnHealth is on firm footing but over time will not be able to sustain quality care, topnotch staff and state of the art equipment and resources without a more robust profit margin.  

So, the dilemma. Unification with MaineHealth would shift the fiduciary responsibility for all the members to a single governing board allowing funds to be allocated as needed. Current discussions question what this board would ultimately look like and whether relinquishing control over local finances to a centralized system is wise, especially if you happen to be a little fish in this big sea of the unknown. Will smaller member organizations lose their voice completely? Will there be a formula for the injection of funds to members across the board or will decisions be made to close those hospitals that represent a drain on the system when they are unable to compete in the market?

Now the reality check. According to Donovan, under the legal arrangement set up all those years ago, St. Andrews and Miles technically became the "property" of MaineHealth. That said, the MaineHealth culture has always allowed and encouraged members to operate independently, but without direct financial benefit. In all probability, the proposed unification is going to happen and as with any change there will be upsides and downsides to the arrangement. What must be determined over the next 12 to 18 months of negotiations is the degree to which LincolnHealth will be able to retain its "seats at the table" within the larger corporate structure.

In the final analysis the best defense may be the building of a good offense by fostering top quality services such as robust primary care practices that support hospital services, expanded specialties access, and services that have a regional reach so that LincolnHealth remains a strong and vital member that will be strengthened by a unified structure. Community support, as always, will play a crucial role in LincolnHealth's ability to maintain its vitality no matter the direction healthcare takes in the future.

For information on what services are available through LincolnHealth check out https://mainehealth.org/lincolnhealth. To learn more about MaineHealth unification go to https://mainehealth.org/about/unification.