A month after signing a non-binding letter of intent, Mercy Health System of Maine has signed a definitive agreement with Eastern Maine Healthcare Systems (EMHS) to integrate into EMHS.
According to a press release posted on Mercy’s and EMHS’ websites Monday, Mercy and all of its service units, including VNA Home Health & Hospice, will become part of EMHS. The release also stated that EMHS is committing to operate Mercy in accordance with the Ethical and Religious Directives for Catholic Health Care Services and Mercy will have a local board providing oversight.
“Signing the definitive agreement is another significant step toward fulfilling our bright future as a member of EMHS,” said Eileen F. Skinner, president and CEO of Mercy, in the press release.
“We are excited to be Mercy’s choice as a strong, committed partner for the long term. Adding Mercy to our system helps us continue our innovative work providing the needed infrastructure and system processes to improve the health status of the people of Maine,” M. Michelle Hood, president and CEO of EMHS added in the press release. “We will support Mercy’s Catholic healthcare mission and believe Mercy will benefit from our operational and clinical expertise and in a number of other important ways.”
Mercy’s affiliation with EMHS came at the same time Mercy’s potential acquisition by Steward Health Care System dissolved last December. At the time, neither Mercy nor Steward gave much detail as to why the deal did not move forward, but the Boston Globe reported that in a confidential memo obtained by the newspaper, Steward’s director of media relations wrote that Steward withdrew from the potential acquisition because Mercy had misrepresented its finances. Mercy denied the characterization.
[See also: Confidential memo reveals breakdown of Mercy-Steward deal and Steward plans to buy Mercy, continues path toward 'Big Med'.]
Following Monday’s announcement, Suzanne Spruce, EMHS’ community relations director, told Healthcare Finance News in an email that EMHS “has full confidence in Mercy’s financials.”
“We are satisfied that after extensive due diligence and free access to everything we asked to see, that there is nothing in Mercy's financials that will be a surprise to us,” she wrote.
She also wrote that Mercy’s leadership team will remain in place and that EMHS expects Mercy to retain its name, although there will likely be some modifications to graphics and messaging, which other EMHS member organizations also have done.
On a website created to address questions from the Bangor and Portland communities and employees of each organization, the frequently asked questions section noted that right now there will be no changes for employees, patients or providers at either organization but that once Mercy has become a part of EMHS “EMHS and Mercy will review operations to ensure that best practices and efficiencies are in place, that patient and community needs are met, and that quality care is delivered.”
While Spruce declined to disclose financial details of the agreement, she wrote that EMHS is committed to investing in capital improvements at Mercy.
The two organizations hope to receive all necessary state and federal regulatory approvals and the approval of the Vatican in six to nine months.
Mercy did not respond to a request for comment for this story.