Seeking financial stability, York Hospital in talks to join MaineHealth

entrance portico to large yellow three-story building

File Photo / Courtesy York Hospital York Hospital is looking to join MaineHealth, Maine’s largest health care system.

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More hospital restructuring could be underway if York Hospital succeeds in its bid to join MaineHealth, Maine’s largest health care system.

A merger would offset growing financial strain.

“As efficient and agile as we are, we can no longer navigate the challenging health care landscape on our own,” said Dr. Patrick Taylor, York Hospital’s CEO

On Thursday, the organizations jointly announced the start of a multi-step process that could continue for more than a year.

A letter of intent has been signed by both parties, which are in the due diligence phase. The process will require state regulatory approval, including an application for a certificate of need and a separate review by the Maine attorney general. Day-to-day operations will be unaffected by the pending transaction, according to a news release.

York Hospital said it is pursuing the consolidation to ensure stability.

“We have turned to MaineHealth multiple times over the past year to assist with clinical needs and support services,” said Taylor. “Now, we are looking to join the MaineHealth family to ensure that our community continues to have local access to top-quality health care close to home, for generations to come.”

Rising costs

Like many hospitals, rising labor costs, escalating pharmaceutical and supply expenses and increasing payer denials have forced York to review its options regarding its future. The hospital said that, unlike many of its peers, York doesn’t qualify for federal safety-net programs, including critical access hospital designation or 340B drug pricing, a program that requires drug manufacturers to sell certain drugs at reduced prices to eligible health care organizations.

The exclusions create a structural disadvantage, limiting access to resources that help many hospitals offset growing financial strain, the hospital said.

York Hospital is one of a handful of independent hospitals remaining in Maine. Officials say that as market challenges continue to intensify, a partnership with MaineHealth will ensure financial stability and continuity of care.

“York Hospital is a vital part of our overall health care system in Maine, as well as an important institution in the community it serves,” said Dr. Andrew Mueller, MaineHealth’s CEO.

In 2023, York closed its inpatient birthing unit, citing staff shortages and falling birth rates.

But earlier this year, York completed a $6.4 million upgrade of its cardiac catheterization laboratory, funded by the hospital’s capital campaign, which raised more than $6 million for the project.

In general, Maine hospitals are struggling with crippling costs, plummeting revenues and aging infrastructure, resulting in reduced services, delayed critical investments and stretched resources. But there’s also been a growing suite of training programs and facilities and a fair bit of new construction and upgrades.

Consolidation

The process would include consolidation of non-clinical staff. York said it will continue to operate until a decision has been made.

York Hospital and MaineHealth officials said they intend to maintain inpatient care for the foreseeable future, invest in and strengthen local primary care, increase access to specialty care and preserve continuity for patients, families, providers and vendors.

York Hospital is an independent, nonprofit dating to 1906. Licensed for 79 beds, over 275 physicians on the medical staff serve the main hospital campus in York, along with 10 community sites in southern Maine and New Hampshire.

MaineHealth is a not-for-profit health system that includes a Level 1 trauma medical center, eight additional licensed hospitals, comprehensive pediatric care services, an extensive behavioral health care network, diagnostic services as well as home health, hospice and senior care services. With more than 2,000 employed providers and approximately 23,000 care team members, MaineHealth provides preventive care, diagnosis and treatment to 1.1 million residents in Maine and New Hampshire.