New River Medical Center affiliation update offered at forums

New River Medical Center’s affiliation task force will spend the first half of November wrapping up a second round of prospective partner presentations.
The task force will further evaluate Fairview Health Services and CentraCare Health Systems and make a recommendation to New River’s non-profit board.
In turn, the non-profit board is scheduled to make its final affiliation recommendation to the hospital district’s board of directors at a Dec. 13 board meeting.
If the district board is supportive of the task force’s recommendation, a memorandum of understanding will be signed and a due diligence process would begin.
A hospital affiliation update was presented earlier this week at two forums hosted by New River Medical Center administrators and task force members.
Citizens joined city and township representatives Monday night at the first forum in the New River Medical Center boardroom. The hour-and-a-half meeting featured a presentation by CEO Marshall Smith. Task force member Steve Health presented similar information Tuesday night during a community forum.
Recently, the task force process has included visits to corporate offices of Fairview Health Services and CentraCare Health Systems and affiliated hospitals.
The task force formed by the New River Medical Center’s non-profit board of directors recently narrowed the hospital affiliation partner field from four to two.
Fairview Health Services and CentraCare Health Systems were announced as affiliation finalists Thursday, Oct. 11, during a board of directors presentation.
The task force has been exploring the pros and cons of affiliating with a larger system for a number of months. Its members include Ervin Danielowski, hospital board chairman, Candace Benoit, board member, Steve Heath, community member, Bob Esse, community member, Dr. Mark Bonneville, M.D., Dr. Troy Ivey, as well as seven non-voting and advisory board members from New River Medical Clinic: CEO Marshall Smith, Nancy Friesen, chief financial officer; Lynn Wieczorek, chief compliance officer; Dr. Mark Dietz, chief medical officer, Euretta Sorenson, chief nursing officer and Karen Lindgren, executive assistant.
Smith said additional local physicians have been asked to participate in the task force during the Phase 2 presentations, which are scheduled to end Nov. 15.
The task force reached out to a number of systems including Allina, CentraCare, Fairview, Mayo, North and Sanford. New River Medical Clinic’s non-profit task force received interest from Allina, CentraCare, Fairview and North.  Those systems visited with the Affiliation Task Force during the month of September and early October. Based on the systems’ initial presentations, Fairview and CentraCare were selected. “Each of the systems did an excellent job,” Smith said.
CentraCare’s network includes the St. Cloud Hospital, Long Prairie Hospital, Melrose Hospital, CentraCare Heart and Vascular, Coborn Cancer Center, Big Lake Clinic and Monticello Cancer Center. Fairview Health Services includes the Maple Grove Hospital, Fairview Ridges, Fairview Southdale, Fairview Lakes, the University of Minnesota Medical Center, Fairview Northland and Ebenezer Homes. The selected hospital affiliation partner will operate under a long-term lease.
­New River Medical Center’s affiliating with a larger health care system would likely involve adopting a governance structure that would range from loose to tight.
According to Smith, affiliating with another, larger system could involve a joint operating agreement, management agreement, governance merger or full merger.
The hospital district board is not interested in selling its facilities, Smith said Monday. Ownership will remain with the hospital, but operations would be leased.
The task force included a specific set of “must haves” and “wants” when it sent out requests for proposals to prospective health care systems, Smith said.
Recruiting and retaining primary care and specialty providers who support local health care was a “must have” for an affiliate partner, along with a willingness to invest in New River’s existing facility, capital and technological advances to help them remain state-of-the-art, Smith said. Prospective affiliate partners needed to disclose and share all past and current relationships and real or potential conflicts of interest. An affiliate partner also needed to ensure the hospital district’s financial viability by guaranteeing $16 million in current bond debt as well as guarantee existence of a local governing board and community representatives.
Task force members scored each system’s presentation and supporting documentation on established criteria and discussed each system’s pros and cons.
According to Smith, CentraCare’s positives include long-term care experience as well as critical access hospital and electronic medical record experience.
“They are very eager to partner with New River Medical Center,” he said. However, CentraCare is not a market-share leader in New River’s service area, Smith said. Also listed as a task force negative was CentraCare’s lack of a strong community health focus. Its brand loyalty isn’t as strong in New River’s market.
Fairview’s positives included high brand recognition associated with the University of Minnesota Medical Center, long-term care experience, strong local board authority and a collaborative culture that’s willing to work with other heath care organizations. Fairview has an existing purchasing agreement with New River, has embraced the concept of electronic medical records and is currently a partner in the Maple Grove Hospital. A lack of critical access hospital experience, distance to its main hospital, no Fairview clinics in New River Medical Center’s immediate area and turnover in top management were listed as other negatives.
Smith said CentraCare is adding Paynesville and Sauk Center to its system list. Fairview has a 25 percent ownership stake in the Maple Grove Hospital.
During Monday night’s forum, Monticello City Adminstrator Jeff O’Neill asked about affiliation finalist scoring. Ivey said that the third-place finisher during the first round of interviews was within 5 points of a second-place finish. Smith said a three to six month due diligence process would include a deep look at finances, liabilities and assets, contracts, human resources and regulatory, accreditation and compliance issues “We had four suitors,” Health said. “[Now there are two]. We’re going to get the best possible [affilation] deal that we can for our patients, taxpayers and people who have supported this hospital.”

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