The governing board of Pen Bay Medical Center and Waldo County General Hospital have voted to merge their budgets and operational structures with their parent organization, MaineHealth.

The Coastal Healthcare Alliance voted for MaineHealth’s unification proposal on Tuesday night during its regular board meeting. The proposal seeks to combine MaineHealth’s member hospitals into a single $2 billion organization overseen by one governing board.

“Although not every member of our board of trustees favored moving forward with unification at this time, a clear majority of our board has voted to move forward with the reorganization of MaineHealth,” said Lee Woodward Jr., chairman of the Coastal Healthcare Alliance Board, said in a news release. “This has been a challenging and important decision for our board members and with the decision behind us, we will now move ahead together in order to best serve our communities in Knox and Waldo counties.”

Based in Portland, MaineHealth is the largest health network in Maine, overseeing Maine Medical Center in Portland, Spring Harbor Hospital in Westbrook, Franklin Memorial Hospital in Farmington, LincolnHealth in Boothbay and Damariscotta, Pen Bay Medical Center in Rockport, Waldo County General Hospital in Belfast, Southern Maine Health Care in Biddeford and Sanford, and Stephens Memorial Hospital in Norway.

The network has expanded in recent years by acquiring or affiliating with smaller medical groups.

[MaineHealth acquires Farmington hospital network]

Unifying the governing boards would also affect a number of health organizations connected to MaineHealth’s affiliated hospitals, including primary care practices, specialty physician groups and nursing homes.

MaineHealth administrators say restructuring would allow the network to move financial and clinical resources throughout its system, which would assist struggling hospitals in more rural areas. Pen Bay Medical Center is one of the MaineHealth hospitals that has struggled financially, while Waldo County General Hospital has managed to enjoy a healthy surplus, according to Coastal Healthcare Alliance Board of Trustees member JB Turner.

Currently, budgets at MaineHealth member hospitals are created by the local governing board and are then reviewed by the network board.

Under the unification proposal, local boards would still draft budgets for their hospitals and affiliated organizations, which would then move up to the MaineHealth board where a singular network-wide budget would be formed, according to MaineHealth Director for Marketing and Communication John Porter.

Since the proposal emerged last year, Porter said work has been done to ensure that under unification, local boards would still have a fair share of responsibility, including the formation of local budgets and strategic plans, as well as maintaining oversight of provider credentialing.

Staff at Pen Bay Medical Center and Waldo County General Hospital have expressed concerns about the effects of unification.

The Coastal Healthcare Alliance had a number of concerns with the first draft of the unification proposal, Woodward stated in the release. Some related to maintaining a level of local control over hospital decisions. However, he said that several modifications were made to the initial proposal, “which created a more favorable result for the smaller hospitals in the MaineHealth system.”

The two midcoast hospitals are not new to mergers. In 2015, the Waldo County General Hospital board merged with PenBay’s to form the Coastal Healthcare Alliance. The board merger was at MaineHealth’s urging which caused the sharing of more physicians and services.

Under unification, for the first five years, the MaineHealth board would include a representative from every local governing board. Coastal Healthcare Alliance would have two representatives on the board, Porter said. This initial board would include about 26 individuals, though after the five-year mark this number would be decreased to about 15 or 20 people, he said.

For the proposal to pass, six of MaineHealth’s local hospital boards must vote in favor of unification, Porter said. Coastal Healthcare Alliances’ vote Tuesday brings that number to five.

Prior to Tuesday, LincolnHealth, Maine Behavioral Health, Franklin Community Health Network and Memorial Hospital in North Conway, New Hampshire, had voted for unification.

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