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JDA to purchase clinic properties

By Staff | Apr 23, 2010

Negotiations continue between the Heart of America Medical Center (HAMC) and Johnson Clinic concerning transfer of ownership, and recently the Rugby Area Job Development Authority (JDA) has stepped in to play a role in the integration process between the two medical service providers.

The JDA board recently approved purchasing clinic buildings in Rugby, Dunseith and Towner which then will be leased to the HAMC over a 15-year period.

Dr. Brian Selland, president of the Johnson Clinic, said the JDA would in essence own the bricks and mortar while the hospital would own the clinic practice.

The HAMC Board of Directors had been exploring options to purchase the clinic properties and it was determined the most beneficial and financially feasible way to do so was to ask a public entity, the Rugby JDA, to purchase the properties and lease them back to the hospital.

Jeff Lingerfelt, HAMC CEO, said this arrangement means a higher level of Medicare reimbursement and a minimum of an additional $83,000 in positive cash flow per year.

Brenda Foster, JDA executive director, said the final details on the purchase agreement are being worked out. The JDA did recently secure a $50,000 grant from the CONAC REAP Zone toward the purchase. There are also some community facilities loans that could be tapped into to help cover the cost.

Foster said purchasing the clinic property and leasing it back to the hospital was a key step to the long-term financial stability of the medical center, the largest employer in the community.

The hospital sees this arrangement as an opportunity to retain 374 jobs collectively and improve the ability to recruit doctors, mid-level and other medical care providers in the future.

Clinic officials are happy the properties will be under local ownership, Selland said.

There has been some confusion, however, as to the future status of the clinic in Maddock. Johnson Clinic provides services there, but does not own the building it occupies. The intent is to keep that satellite office going, but arrangements would have to be made between the hospital and the current building owner, Selland points out.

Just when the integration will be complete is not yet known.

“It’s a process that just can’t really be rushed,’ Selland said. “We want to make sure everything falls into place.”

Selland said meetings between the clinic and hospital representatives have been positive throughout the integration process.

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