A church issue and a state deadline combined last week to break up merger talks among the three hospitals in Portland, Maine.
Hospital representatives had been meeting since October 1993 to construct a model for an integrated healthcare system that called for a new governing board with full power to manage the system.
But Mercy Hospital, a 200-bed Catholic facility, said it couldn't resolve key governance issues involving control of its board by an outside organization and other concerns of the Roman Catholic church, including associating with a system that allowed abortions, said Howard Buckley, Mercy's president.
Another hurdle involved guaranteeing that the state of Maine had enough oversight of the proposed merger to protect it under "state-action immunity," a legal doctrine that insulates activities from federal antitrust scrutiny.
The Maine Legislature had agreed to consider amending its Hospital Cooperation Act specifically for the Portland situation, said Donald McDowell, president of 598-bed Maine Medical Center. The third hospital participating in the talks was Brighton Medical Center, a 122-bed osteopathic facility.
But the hospitals couldn't resolve differences in time for a state legislative panel hearing set last week to consider the customized legislation, Mr. McDowell said.
Maine's pioneering hospital-cooperation legislation allows talks to take place without fear of collusion charges, but it doesn't protect mergers. With 100% of the market in Maine's largest city, the proposed merger needed to have state-action immunity, Mr. McDowell said.
If the hospitals had reached agreement on a proposal, they would have pushed for a bill that commits to law a savings of $20 million a year as a result of the consolidation, he said.
