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The future of healthcare in International Falls
Falls Memorial Hospital & SMDC Health System explore merger
A Q&A for employees of Falls Memorial Hospital and Duluth Clinic-International Falls from:
Bob Anderson, Chairman Sheila Hart, Administrator
Falls Memorial Hospital Duluth Clinic-International Falls
Why have hospital and clinic officials been talking about a possible merger?
We believe that by merging, we can create a stronger organization that is better positioned to meet the long-term healthcare needs of our community. This includes our ability to offer expanded services and improved access to patients as well as a shared electronic medical record. A merger also has the potential to enhance our ability to recruit much-needed healthcare providers and provide greater financial stability.
What are the potential financial benefits of merging?
While there are many financial benefits that can be gained through a merger, perhaps the greatest is our ability to capture enhanced reimbursement from Medicare that is preliminarily estimated at more than half a million dollars annually. Because the federal government understands the value of having clinics and hospitals work closely together, Medicare rewards healthcare providers who collaborate by reimbursing them at higher rate than those who don’t. By merging together, we are eligible to apply for this special designation called hospital-based status.
What’s the status of these merger talks?
Both organizations signed an official letter of intent expressing their mutual interest in exploring a possible merger. Talks have been ongoing and productive; and at the end December, the Board of Trustees for Falls Memorial Hospital will vote on whether to proceed further. Likewise, the Board of Directors for SMDC Health System will take a similar vote in early January.
If both Boards vote to proceed, what happens next?
In order to merge, a new joint board of directors would need to be formed. Because any changes to the Falls Memorial board structure must be approved by hospital shareholders, the next step would be to inform shareholders of proposed changes to the hospital bylaws. Then shareholders would be asked to vote.
Will the merger result in employee layoffs?
One of the goals of merging is to expand our services, so we may actually need more employees eventually. Another goal is to increase the efficiency of our existing operations. This could involve retraining workers for new jobs. It also could mean that we would not replace employees who leave the organization through natural attrition (i.e. retirements or new job opportunities.)
How do these talks affect the search for a new hospital CEO?
The hospital has an experienced leader in Bonnie Erickson, who took over as interim CEO in November. Bonnie is not new to FMH; she served in this same role three years ago and was a member of the hospital board for more than a year. Having Bonnie in this leadership role provides stability during these merger talks and means the hospital board doesn’t have to rush the search for a new CEO. An active search will begin after SMDC and the hospital make a decision on whether or not to pursue a new level of partnership.
If the clinic and hospital merge, will current and future charitable donations to the healthcare organization stay local?
Yes. The wishes of current and future donors will always be respected, and donors always have the option of designating their gift to a specific program, service or cause.
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