Shrinking Revenue Caused by Fall in Patient Numbers
After years of decreased patient volume, Parkview Adventist Medical Center of Brunswick, Maine filed for Chapter 11 bankruptcy protection on June 16, 2015. Parkview Adventist Medical Center plans on merging with their longtime competition, Mid Coast Health Services, another Brunswick hospital.
By filing for Chapter 11 bankruptcy protection, Parkview Adventist Medical Center will be able to restructure their debt and find new a new source of revenue in their merger with Mid Coast.
Two Hospitals Competed for Local Patients
For years prior to Parkview Adventist Medical Center filing for Chapter 11 bankruptcy protection, Parkview and Mid Coast Health Services were considered the two hospitals that residents of Brunswick and the neighboring towns of Bath and Topsham would patronize for health care. Each hospital tried their best to attract more customers than the other and gain the title as the area’s most popular choice for health care. In the end Mid Coast was more successful in getting a larger volume of patients.
Mid Coast was formed in 1991 from a merger of two smaller hospitals which put them at 92 beds, far more than the smaller Parkview Adventist Medical Center which only contained 55 beds. Overall Mid Coast was able to handle more patients than Parkview. Decreased patient volume in Parkview Adventist Medical Center is being viewed as the primary reason for the significant dip in revenue for the hospital. Parkview feels that was the leading cause in them filing for bankruptcy protection.
If the merger between the company goes forward, all employees of Parkview Adventist Medical Center will retain their jobs.
Mergers are a Growing Trend in Maine
Parkview Adventist Medical Center is not alone in the state in finding itself in a struggling situation. Other Maine hospitals have in recent years filed for bankruptcy protection or merged with other hospitals and healthcare systems. Outside of Maine, the problem is also spreading, with many hospitals struggling to stay open.
“It’s happening nationally at a rapid pace, just because of the strains that are going on,” said Steven Michaud, President of the Maine Hospital Association. “Unfortunately, it will most certainly continue.”
Last year Mercy Hospital merged with Eastern Maine Healthcare Systems in Brewer after Mercy encountered financial issues. This is one of several examples of hospital mergers that took place in Maine in the last few years.
“Hospitals in Maine and nationwide are going through a wave of mergers due to financial constraints,” added Michaud. “This includes declining state and federal reimbursement rates, a growing number of charity cases and rising costs.”
Future of Parkview Adventist Medical Center
The patients at Parkview will continue to receive medical care throughout the bankruptcy proceedings and after the proposed merger goes through.