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February 22, 2019

Mayo Regional Hospital’s board to vote on merger with Northern Light Health

Courtesy / Mayo Regional Hospital Mayo Regional Hospital Executive Director Marie Vienneau describes a proposed merger with Northern Light Health as "the best possible scenario for the people we serve."

The board that oversees Mayo Regional Hospital in Dover-Foxcroft plans to vote Wednesday on a non-binding merger agreement with Northern Light Health, a statewide health care system based in Brewer that has nine member hospitals in Maine.

The board’s executive committee at a meeting Tuesday night decided to place the vote on the agenda for the board meeting next week, citing in a news release “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 Director 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, according to the Mayo Regional Hospital news release.

Northern Light Health’s member hospitals are: AR Gould Hospital in Presque Isle; CA Dean Hospital in Greenville; Acadia Hospital (psychiatric) in Bangor; Blue Hill Hospital in Blue Hill; Eastern Maine Medical Center in Bangor; Inland Hospital in Waterville; Maine Coast Hospital in Ellsworth; Sebasticook Valley Hospital in Pittsfield; and Mercy Hospital in Portland.

Vienneau said that because Mayo Regional Hospital is owned and operated in the form of a “hospital administrative district,” the board’s members are elected by the 13 communities served by the hospital. Formed in 1974, Hospital Administrative District 4 is a quasi-governmental entity with tax power and the only one remaining in Maine.

Vienneau said the effect of the merger would be to transform Hospital Administrative District 4 into a Maine charitable tax-exempt nonprofit corporation that would have a community-based board, but would not have taxing authority. In effect, she said, the merger would relieve the towns in the hospital administrative district 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,” Vienneau said. “ 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.”

Next steps

The board vote next week will not be the final step, as the state charter for Hospital Administrative District 4 will need to be changed by the Maine Legislature for the merger to be permitted, similar to the process followed by other hospital administrative districts in years past. Also, Northern Light Health’s 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.

The Hospital Administrative District 4 executive committee said in its news release that those 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,” said Vienneau. “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.”

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