A single corporate structure for 10 of 12 members of the MaineHealth Systems Network and four affiliates takes effect Jan. 1, 2019. MaineHealth System began in 1997 when Saint Andrews Hospital in Boothbay Harbor became the first member. Six months later, Miles Memorial Hospital in Damariscotta became the second. In 2016, the network sought a more structured format with a single board of trustees.

In recent months,LincolnHealth officials have explained the rationale for a more centralized approach. They have met with seven or eight municipal select boards around the county, according to LincolnHealth CEO James Donovan. On Oct. 24, the day the unification became official, LincolnHealth met with Boothbay selectmen. Donovan explained the unification creates more financial flexibility. He explained larger hospitals like Maine Medical Center in Portland and smaller ones like Miles are “holding their own," but mid-sized hospitals like Pen Bay Medical Center in Rockport are “struggling.”

“The whole idea is providing a single board of trustees who will oversee a new system. This gives us an opportunity to look at all the pieces and move them around supporting care locally,” he said. “It’s all about flexibility and making us more responsive to changes in Medicare going forward.”

Donovan also reported how MaineHealth Network members are paid. He reported 65 percent of network payments came through Medicare or MaineCare payments which cover only a portion of costs. Donovan said 28 percent of  payments came through private insurers such as Anthem or Aetna. This results in hospitals shifting medical costs to insured customers because government pays a set fee. “We start out every day at  a loss with two-thirds of our business not meeting our costs,” Donovan said. “We struggle the rest of the year trying to make it up which results in cost shifting to insured patients,” he said.

The new structure includes Maine Medical Center, Southern Maine Health Care, LincolnHealth, Coastal Healthcare Alliance, Western Maine Health, Franklin Community Health Network and Maine Behavioral Healthcare. A single board will govern them all; each retains a local board with a significant role in overseeing health care in each community.

The new structure includes a variety of medical practices and health care facilities throughout the state. It will have nearly 19,000 employees and generate $3 billion in yearly revenues, according to MaineHealth officials.

The local organizations will be based in Belfast, Biddeford, Farmington,  Damariscotta, Rockport, Portland,  Norway and at a Westbrook psychiatric hospital. They also include a range of physician practices and other healthcare facilities serving 1.1 million people.

Two current MaineHealth members, NorDx Laboratories and MaineHealth Care at Home, will not join the unification. Memorial Hospital, a MaineHealth member in North Conway, New Hampshire, will not continue in the new arrangement due to New Hampshire regulations.