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HAMC, Johnson Clinic plan merger

By Staff | Sep 17, 2009

The Good Samaritan Hospital/Heart of America Medical Center and Johnson Clinic for decades have operated independently, yet together in providing quality health care to residents in Rugby and the surrounding region.

Some time next year the two facilities will merge into one organization.

Leadership from both the hospital and clinic last week announced in a press release – it has begun formal discussions on integration.

The decision is intended to provide more operating efficiencies in health care delivery systems for Rugby and other community sites in the area. It will also allow for more sustainable physician recruitment and enable more favorable federal reimbursement for hospital services.

For years the HAMC has struggled to meet its costs to deliver health care services because of lower federal Medicare-Medicaid reimbursements. Eventually, the HAMC changed its designation from a Prospective Payment Hospital to a Critical Access one in 2007. That provided some additional reimbursements. Integrating the clinic and hospital will produce an even better arrangement in reimbursement.

Currently, both facilities have conducted physician recruitment. Also, limited federal reimbursement made it quite challenging for the medical center to recoup costs for health care services.

With the added financial responsibility for health care costs, increasing patient access is central to this effort.

Consolidating the two medical facilities has been a concept discussed albeit informally for several years. Since 2008, the Minneapolis consulting and accounting firm – Wiplflii LLP – has advised hospital and clinic leaders on possible integration.

Leadership from both the hospital and clinic see great potential in the future for providing and delivering health care in the region. “It’s a real step in the right direction,’ said Wes Black, chairman of the Good Samaritan Hospital Association.

Dr. Brian Selland, president of the clinic board, said they look forward to the challenges of integrating the two facilities into one for the benefit of the patients it serves in the community and region.

The announcement comes about a month after the GSHA hired Jeff Lingerfelt to become CEO of the HAMC. Lingerfelt, who presently is completing his administrative duties in a health care facility in Creigton, Nebraska, has experience in working in an integrated clinic-hospital. Not only in his current job, but also at a facility in Montana. He will begin work in Rugby in November.

Black said the government reimbursement plan has really forced the hand of smaller, rural medical into the integrated model.

Consolidation is a complex process to ensure it follows federal regulations. The goal is for the integration to be completed by April of 2010.

The idea of consolidating the hospital and clinic is not a new one. Hettinger, located in southwestern part of the state, has operated successfully with that arrangement for years.

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