Selling the hospital

Amid all the recent news coverage of the merger between MeritCare and Sanford Health, another transaction closer to home might have gone almost unnoticed: the finalizing of the sale of Marshall’s city-owned hospital to Avera Health.

The papers for the $38.5 million sale were signed Nov. 2, the Marshall Independent reports:

A neat line of papers that covered the tops of several long and narrow tables at Avera Marshall on Monday was part of 40 documents that included the details of the sale. The deal includes $10 million for the Avera Marshall foundation, the $5 million PERA fund, $2 million to the city and other terms including the pay-off of Avera Marshall debt.

It’s the hope that by joining forces with the privately owned Avera Health of Sioux Falls, S.D., the hospital in Marshall will be able to develop a stronger regional presence. The lengthy discussion leading up to the sale was in fact initiated by Avera Marshall, not by Avera Health.

It will be interesting to see how developments unfold over the next few years. Avera Marshall has a strategic plan that includes expanding its surgery unit. The possibility of adding cancer services and a women’s and family health facility is being explored. There are plans to strengthen Marshall’s ability to recruit physicians and bring in more specialists, particularly in the areas of internal medicine, pediatrics, oncology and cardiology. I notice they’re advertising in the West Central Tribune, among other media outlets, for a trauma coordinator and a director of clinic operations.

The sale of Marshall’s hospital (those of us who have been around for awhile probably still sometimes call it by its old name, Weiner Memorial Hospital) should be noteworthy locally for a couple of reasons.

First, there’s no way this move won’t have at least some ripple effect. Although health care ultimately is local, it also has regional implications. Will Avera’s stronger regional presence in Marshall lead to some shifting in the market? What will the implications be for Affiliated Community Medical Centers, which operates two clinics in Marshall and historically has been the main force behind Marshall’s physician workforce?

Second, yet another city-owned hospital in Minnesota has now come under private ownership. Only about one-third of Minnesota’s 151 hospitals are still owned by a city, county or other public jurisdiction, and most of them tend to be in smaller rural communities – Benson, for instance, or Litchfield or Granite Falls. As one of the largest city-owned hospitals in the state, Rice Memorial Hospital in Willmar has become somewhat of a rarity.

It would be natural to wonder whether Willmar might some day follow Marshall’s example and sell the hospital or convert it to a 501(c)3 private entity. It has been tried before, back in the late 1980s at a time of significant change and upheaval in the hospital industry. Voters resoundingly turned it down, however, and when the discussion was revived in the mid-1990s, it didn’t take long for the concept to once again be abandoned.

Under the Willmar city charter, a referendum by the voters is required before any change in the ownership of Rice Hospital can take place. There seems to be a strong sense of local investment in the hospital; when officials sought approval in 2002 to issue city-backed bonds to finance more than $50 million worth of new construction and renovation at Rice, the measure passed by a margin of 4 to 1. At the moment, it’s hard to imagine any circumstance that would alter this public tide of support. Not to say that it might not happen some day, given the right combination of events, but for now it appears to be extremely unlikely.

All communities, after all, have their own local politics and dynamics. Perhaps this was the best move for Marshall’s hospital, and one that will help strengthen the fabric of health care services in southwestern Minnesota. We wish them the best in the months ahead.

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