December 19, 2013

Franklin Community Health Network announces merger with Portland-based MaineHealth

The Farmington-based health network plans to join with the larger health system by the end of 2014.

By Kaitlin Schroeder kschroeder@centralmaine.com
Staff Writer

FARMINGTON — Franklin Community Health Network, home to one of the few remaining independent hospitals in the state, announced Thursday it will join Portland-based MaineHealth.

click image to enlarge

Rebecca Arsenault

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CHANGES: President and CEO of Franklin Memorial Hospital/Franklin Community Health Network, Rebecca Arsenault, in February.

Staff file photo by David Leaming

The network’s board of directors unanimously approved the decision this week to join the larger system after six months of research.

The Farmington-based health network said in a press release that the decision was made to protect the delivery and quality of healthcare in the area.

The merger will have no immediate impact on the network’s 607 employees, said spokeswoman Jill Gray, and it won’t be clear what any eventual effect would be until further along in the process.

“We’ve got a lot of steps to go through before its going to be complete,” she said.

President and CEO of Franklin Community Health Network Rebecca Arsenault said in a statement that many small hospitals are merging with larger networks because of decreased government reimbursement, increased costs to health care, increased regulation and a need to improve the quality of care.

In September, she said the board of directors would be weighing the benefits of a merger, because of ongoing financial losses it had during the previous fiscal year.

The two organizations are still in the merger process, and need to prepare a state certificate of need application and request an antitrust review. The merger is expected to be completed by late 2014.

Franklin Memorial Hospital has a history of working with other members and affiliates of the MaineHealth system, including collaborating with Maine Medical Center for cardiology and cardiovascular care, neonatal care at the Barbara Bush Children’s Hospital at Maine Medical Center and MaineGeneral Health for oncology services.

The network ended the fiscal year ending July 1 with $76.9 million in revenue, $85.34 million in operating expenses and $1.17 million in non-operating gains, resulting in a total $7.28 million loss for the year.

It was the first time the hospital operated at a loss in more than a decade, Arseneault said in September at the hospital system’s annual business meeting.

The network also reported charity care provided by the hospital has increased by $2 million during the past few years, while the state Legislature this session increased the taxes on hospitals and reduced the amount of money it is paid for providing for outpatient services for MaineCare, the state’s Medicaid programs.

Hospital officials said the $15.4 million repaid in MaineCare by the state earlier this year brought relief to the hospital, but did not change the bottom line because it was not new money but rather paying back patient services already billed.

In the last fiscal year, the hospital eliminated the equivalent of 52 full-time positions and cut $6 million in expenses.

Arsenault said in September that the board made the cuts so it wouldn’t continue to operate at a loss year after year.

Kaitlin Schroeder — 861-9252kschroeder@centralmaine.com
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