Hospital mergers: Is it worth losing the local character?

Doing nothing to deal with the financially-strapped Virginia Regional Medical Center can’t be an option, Virginia Mayor Steve Peterson said last Friday during an online forum on the future of the hospital – and rural health care in general.

“This is really a difficult situation,” Peterson said in the forum sponsored by Minnesota Public Radio News and the Iron Range’s Hometown Focus. “If we as city leaders do nothing, what is the outcome? I fear a lot worse for all.”

Peterson was joined by administrators at the hospital, including the hospital CEO, Bill Smith. We also invited those who could speak about rural health care in a broader sense, such as Al Vogt, chairman of the Minnesota Wilderness Health Care Coalition, a consortium of hospitals in northeast Minnesota.

Vogt said that when asked what it means for an independent hospital, like the city-owned Virginia facility, to merge with a larger system, he said:

“(T)hat’s kind of asking what ‘change’ should look like. I do believe that a number of our members are looking at thier mission to their communities and doing what they can.”

The conversation continued with Jeff Tucker, president of Integrity Health Network, an organization based in Duluth that is working to keep hospitals like VRMC independent.

Tucker:”(Merger) has meant different things to different types of organizations. Where there’s been duplication of services, it has meant consolidation or even elimination of positions. That’s been more pronounced in clinic acquisitions. It has meant the elimination of competition in some markets which concerns us.”

Mayor Steve Peterson: “Mr Tucker hit right on, A merger of our facility, could mean a duplication of some services and that doesnt always work out.”

But Peterson feels as though Virginia city leaders have no choice but to explore merger options. That’s why the city is soliciting offers. This worries employees of the hospital. Sue (who didn’t give a last name) said she’s worked at the Virginia hospital for several years and said this it is “a community hospital, not a big business.”

The mayor then responded:

Steve Peterson: Sue, we are trying to save our facility, but it may have a different look at the end of the day

Michael Caputo (MPR): These big changes… do they mean – more corporate?

Steve Peterson: Good question Michael, that could well be what happens.

I bit later in the online forum, a commentator named Charles asked Peterson:

“Mayor, when you say it will have a different look at the end of the day, can you be more specific? Can you tell us the direction that you and the City Council have decided on?

Steve Peterson: “Charles, some of the things we are trying to determine is: What is our capacity? What can we do well and what can we offer to the community on a consistant basis? Who out there sees the value in us and how can we put it together?”

VRMC CEO Bill Smith: “We will do anything that makes economic sense–no options are off the table. But the focus needs to remain on servicing the community with a financially secure facility. (The bidding) process will hopefully help us figure out how to do that.”

Others in the online forum tried to address the fears of a hospital losing its community connection when it merges with a bigger system.

LeAnn Anderson: “I worked for Hibbing General Hospital back in the day, then for the University when they bought it and then eventually for Fairview. All the transitions were difficult, but in the end the hospital survived. Our jobs survived, and the hospital in Hibbing is still there.”

Nancy Barnes, laboratory manager at VRMC: “I was at Allina Health System when we went through the Health Span, Health One, Allina mergers. Many people feared for their jobs, yet in reality, most job changes occurred through attrition. We saw many departments consolidate, but it improved quality and lowered cost. It was not a negative experience from my point of view.”

And still, people in the Virginia area needed assurances, like Anne (no last name given):

“If VRMC is taken over by a larger institution they could close VRMC, which would leave our community without a hospital at all. Unacceptable.

Mayor Steve Peterson: “Not on my watch, Anne”

Let’s explore this question of whether the community needs will get tossed aside if an independent hospital merges. What’s your point of view?

  • Karen

    I work at a small hospital that was purchased by Heatlh Partners a few years ago. In the past year they have let several people go, froze wages,greatly reduced employee benefits, and pretty much quit advertising. They have also changed the phone number to the hospital which has proven to be quite confusing to our largest base of patients, the elderly. Since our hospital has been purchased, Health Partners has purchased 2 nearby hospitals in larger communities. I feel like that are setting this small community hospital up for failure. In genral the managers and staff are stressed and crabby as the future at this point feels very uncertain.