The following is a second installment of an article derived from a September 27 interview with MaineHealth CEO Bill Caron. The intent of the interview was to obtain Caron’s responses to some of the questions that have been raised since the St. Andrews Hospital decision and as such, it is presented mostly in his words. Click here to read Part 1.

On governance and MaineHealth control

Caron said local boards initiate decisions and MaineHealth has final approval of “big decisions,” such as the planned clinical changes.

“Decisions come from the bottom up. MaineHealth has no power to reach down into the board,” he said.  Caron said boards nominate new board members who have particular skills that would be helpful to the board. MaineHealth approves nominees but does not nominate.

Caron is an ex-officio member of all MaineHealth member boards, including St. Andrews. He said he never votes on board issues but admits he is influential.

“I don’t vote but I won’t deny that I have a lot of influence. It’s my job to know what’s going on. In this case, in no way did MaineHealth say to Lincoln County Healthcare, “This what you need to do on the Boothbay peninsula.” I wasn’t active in that process. Did I know about it? Yes, but I wasn’t active, nor was anyone from MaineHealth. We supported their planning process,” Caron said.

On sale and transfer of property

The short answer is the St, Andrews Hospital property could be sold but proceeds from its sale are unlikely to end up in Lincoln County Healthcare or MaineHealth’s coffers. Sale of charitable assets is governed under state law and the disposition of proceeds from the sale of a charitable asset would most likely be determined by the Attorney General.

For the St. Andrews property to be sold, the decision would have to originate at the local board level and then be approved by MaineHealth. Unlike St. Andrews or Lincoln County HealthCare boards, the Mainehealth Board has 650 corporators in 11 counties, who would also have to approve the sale of assets, Caron said. Caron said the sale of St. Andrews is actually more difficult under the MaineHealth structure than when St. Andrews was stand-alone, but some would say without MaineHealth there would be no incentive to dispose of St. Andrews.

Caron thinks the discussion is not relevant. “We’re not going to turn over our assets. We’re committed to using our assets to develop the best healthcare system we can in the community,” he said.

The task force and some community members have alleged that donations made to St. Andrews have been transferred to Miles Memorial Hospital. Caron said this is not true. “It’s not allowed under state law. No donor-specified assets have been transferred from St. Andrews to Miles.”

On executive compensation

MaineHealth is a $1.6 billion organization and Caron is, at last report, the highest paid healthcare CEO in Maine, with an annual total compensation package over $1 million. Some have suggested that high executive compensation is part of the fiscal problem for Maine’s healthcare organizations, but Caron would probably not agree.

Caron described MaineHealth and Lincoln County Healthcare’s system for determining executive compensation. Each board contracts with a consulting firm that profiles positions and compares them to comparable positions across the state and country. The consultants determine pay levels at the 40, 50 and 75th percentiles for the position and the Board use those data to set pay.

“Philosophically, if we want the best, we need to pay more than the 50th percentile level, but as a system, we have concluded that Maine is at best a 50th percentile state (relative to wage scale),” he said. Caron said MaineHealth executive compensation levels are on average at the 50th percentile for the nation.

On community “takeover” of hospital

(This discussion occurred when Rep. Bruce MacDonald planned to submit a bill to establish a community hospital district for the peninsula. Although not a hundred percent on target, it is still relevant.)

““The bottom line is communities and hospitals that don’t want to be in our system, we aren’t going to force them to be in our system. You only want members who want to part of the organization, who share the vision,” Caron said.

“We have a group saying that they know better what the needs are in this community. If it played out that way, the community hospital group would be arguing for an independent free-standing hospital and we would be arguing why that’s not the best course. It would set up that debate and that would be unfortunate. It’s a lot of energy wasted.”

“What you want is people getting educated and agreeing that those 20 volunteers (on the board) were right. That it’s time to reshape what happens in Boothbay. Make it different but make it better. And let’s get on with that task. It’s hard enough to do on its own,” Caron said.

On the financial viability of an independent St. Andrews Hospital, Caron doesn’t mince words, “It will fail. I’ve been at this for 35 years. A hospital that small isn’t going to make it. We kept it alive for 7-8 years with an average daily census of 1.6 acute patients. The discussion shouldn’t be about maintaining the hospital, it should be about what is the appropriate healthcare system for the community.”

On palliative care and swing beds

“If that’s important to the community, we will figure how to provide that service going forward,” Caron said.

On the future of healthcare in Midcoast

Technology has revolutionized medicine and procedures that would have meant a long hospital stay 15 years ago are now routinely done as outpatient. Caron thinks the inpatient to outpatient trend will continue and that it is positive for both patient outcomes and costs.

The challenge of providing rural healthcare will remain and more collaboration among healthcare facilities will be needed to provide services, he said.

“There’s a bigger conversation going on. We’re asking our members in Knox, Lincoln and Waldo county to do regional planning. If you put those three counties together, you’ve got 100,000 people and you can deliver specialized services that you can’t deliver to 25,000 people.” Caron said.

“The alternative is to let it all go to Portland or Bangor. We argued 10 years ago that Lincoln County needed to come together. Now, we’re saying that Lincoln, Knox and Waldo better start coming together on specialties or they won’t be able to support them,” Caron.

“We need to make sure that our system evolves so we can provide the best care as close as we can,” he said.

Sue Mello can be reached at 207-844-4629 or sumello@boothbayregister.com.