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California-based nonprofit to purchase Central Maine Healthcare

Central Maine Medical Center is seen, Thursday, Dec. 16, 2021, in Lewiston, Maine.
Robert F. Bukaty
/
AP
Central Maine Medical Center is seen, Thursday, Dec. 16, 2021, in Lewiston, Maine.

Central Maine Healthcare has entered into an agreement to be purchased by the California-based non profit Prime Healthcare Foundation.

Under the deal, still pending regulatory review, Prime will invest $150 million in Central Maine Healthcare.

CEO Steve Littleson said the system was approached by Prime Healthcare and the non-profit Prime Healthcare Foundation more than a year ago while it was conducting a strategic review.

"That's when we came to the conclusion that we just needed to be part of a bigger system with more resources, really, to sustain our future," Littleson told reporters Wednesday afternoon.

The benefits of a partnership with Prime, he said, were clear.

"It means improved access to care, because we will have the resources to expand access," Littleson said.

CMH operates Bridgton and Rumford Hospitals, as well as Central Maine Medical Center in Lewiston. The investments from Prime will come over the next five years or so and will improve the system's facilities and technology, among other upgrades.

"[It means] expanded emergency departments at Bridgton Hospital and Rumford Hospital, expanded medical surgical bed capacity at Central Maine Medical Center," Littleson said. "[It also means] updated technology so that patients who need state of the art surgical care can get that surgery using the latest technology, like robotics."

The deal must still receive regulatory approval from the federal and state governments, which will take several months. Once the acquisition is approved and the transaction is closed, Littleson said patients shouldn't notice much of a difference.

"We'll still accept all of the insurances that we do now, provide all the services that we do now. It should be seamless for, especially, the patients," he said.

Local leadership will stay on board, as will most of the current health system staff. Littleson said employees will have to fill out a form to join the Prime Healthcare Foundation's payroll, and they'll have to pass to a background check. Their wages should stay about the same, and Littleson said the benefits are slightly better.

The biggest change, hospital officials said, will be transitioning CMH medical records to the electronic system that Prime Healthcare uses.

"Through our dedication to health equity, clinical quality and patient-centered, physician-led care, we are deeply committed to ensuring the CMH legacy continues for generations to come," Kavitha Bhatia, president and chair of the Prime Healthcare Foundation, said in a statement.

Ann Woloson, the executive director for Consumers for Affordable Healthcare, said she's cautiously optimistic about the foundation's acquisition.

"They appear to have a good record in terms of quality, which is important," she said.

But Woloson said she wants to dig more into Prime Healthcare, a for-profit company based in California that says it's the fifth-largest for-profit health system in the US. The Prime Healthcare Foundation is a nonprofit subsidiary of the for-profit system and operates 16 hospitals.

"I'm not saying that that's a problem," she said. "We just want to make sure that this transition, if it is finalized, results in continued access but also provides some relief to Mainers in terms of high hospital costs, which we hear all the time about."

In 2021, Prime Healthcare paid $33 million to settle whistleblower allegations that the company offered illegal financial incentives to physicians in return for referrals.

But the Prime Healthcare Foundation gets high ratings from Charity Navigator, which assesses non-profits.

The deal comes at a time when hospitals around the state are struggling financially.

The health system's largest hospital, Central Maine Medical Center in Lewiston, has had deficits of $19 million or more in recent years.

"I think it's safe to say if Central Maine could have remained independent, they would have," said Steven Michaud, president of the Maine Hospital Association.

Ever since the pandemic, he said, hospitals across the state have faced unprecedented financial challenges, including inflation, workforce shortages, and low reimbursements.

Michaud said hospital leaders are trying to figure out how to stay viable, so it's understandable Central Maine Healthcare entered into an agreement to be purchased by Prime Healthcare Foundation.

"They're going to invest in the facilities very substantially and invest in services," he said. "And then one needs to ask, what's the alternative?  If they don't do this, do the services and access for patients in the greater Lewiston area just devolve?"

It's also a sign that the status quo is not sustainable, Michaud said.

He's urging lawmakers to enact policies that support hospitals, which includes no further cuts to reimbursements. That could be challenging for the state, which faces a $120 million budget shortfall in Medicaid.