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Mercy Hospital Seeks Merger with Eastern Maine Healthcare Systems
12/13/2012   Reported By: Patty B. Wight

Mercy Hospital in Portland has signed a letter of intent for a merger arrangement with Bangor-based Eastern Maine Healthcare Systems. Just a few months ago, Mercy had been courting a for-profit hospital chain in Massachusetts. That deal recently fell through, and as non-profit Mercy seeks another partner, some patient advocates are raising questions about how this latest plan will affect health care both in northern and southern Maine. Patty Wight reports.

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Mercy hospital has been losing money for several years. Hospital officials say it's a result of higher quality care - healthier patients, after all, use fewer hospital services. It's also just down the street from Maine Medical Center, the largest hospital in the state of Maine. So as Mercy moves toward an accountable care model, where reimbursements are based on keeping people well, it needs help.

So says Eastern Maine Healthcare Systems spokesperson Suzanne Spruce. "You have to have mass in your population health groups, and so that's why we see this as a very, very good fit."

Not only for Mercy, but for EMHS, says Spruce. EMHS has seven hospitals in central, northern, and eastern Maine. "We see this as an expansion of service, as providing and maintaining and preserving access to quality health care for the entire state," Spruce says.

But some question why EMHS wants to spread south.

"I'm not sure what the advantage to Eastern Maine is to owning a hospital that's a couple hundred miles away from them," says Dr. Philip Caper, a corporator for EMHS - essentially, part of a volunteer citizen board.

Caper wonders if the merger will dilute EMHS's attention on the area it already serves. And he says some of the perceived benefits for Mercy patients - including equipment upgrades and increased staffing, can actually become drawbacks because it creates false demand for services in a market such as Portland.

"There's a - (chuckles) - there's an old saying in medicine, that a well person is nothing but an under-diagnosed patient," Caper says.

And unlike typical business markets, where more competitors drive costs down, Caper says multiple hospitals in a market can actually drive costs up. There's evidence behind that claim, says Joe Ditre. He's executive director of Consumers for Affordable Health Care, a patient advocacy group.

"Just think about - all this equipment, and all these services, it ultimately comes down to the patient or consumer paying, so having duplicative services and duplicative equipment often increases the prices," Ditre says.

Ditre says it all depends on the goal of the merger. Sometimes, he says, the larger entity simply wants to create a feeder system that drives patients to other facilities and drains the local system. But he thinks that's unlikely to happen in this case because Mercy has a good reputation and loyal patients in the Portland area.

"And it's a long drive to go up to Bangor," Ditre says. "So I think that the things we've seen happen in other communitites won't happen with this particular merger."

It's still very early in the process, and Ditre says he will remain a cautious observer. Meanwhile, both Ditre and Caper are breathing sighs of relief that Mercy's plan to merge with a Massachusetts for-profit hospital chain fell through. They say non-profits tend to be driven more by mission to their patients than revenue.


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