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Rice, ACMC take final steps for anesthesia, sleep lab joint venture

A sleep therapy mask is pictured in a room at Rice Memorial Hospital’s sleep lab, where patients spend a night and their sleep patterns, breathing and heart activity are monitored and recorded. Tribune photo by Ron Adams

WILLMAR -- Final steps are being taken to incorporate anesthesiology and sleep lab services into the Willmar Medical Services joint venture between Rice Memorial Hospital and Affiliated Community Medical Centers.

Board members of the city-owned hospital voted unanimously last week to authorize hospital administrators to execute the documents for sealing the deal.

The ACMC board is scheduled to vote Wednesday.

Once it is approved, the expansion of the joint venture will take effect July 1. Each party is contributing $1.4 million in equity to the agreement.

Officials said the addition of anesthesia and sleep medicine to the Willmar Medical Services joint venture will help ACMC and Rice enhance the two services, reduce duplication and deploy local resources more efficiently.

"Administrators of both organizations believe this joint venture makes sense for all the right reasons," said Mike Schramm, chief executive of Rice Hospital.

ACMC and Rice had approved the concept several months ago, but implementation became bogged down over contract issues and the two parties ended up returning to the table for more negotiation.

The last wrinkles were finally ironed out earlier this year. "It was just a matter of having all the legalities worked out so we could get it done," said Dr. Ronald Holmgren, president of ACMC.

"We have had lots of discussions," Schramm said. "We've worked on this for at least two years."

For patients, any changes will likely be invisible, he said. "There's no difference in what the patient experiences."

The real change lies in how anesthesia and sleep lab services will be aligned and structured. Instead of being operated independently by the hospital and ACMC, the two services will be provided jointly, with each of the partners sharing 50-50 in any profits or losses.

For the first two years, certified registered nurse anesthetists and other non-physician staff will work under provider service agreements. By Jan. 1, 2016, they will become direct employees of Willmar Medical Services.

"This is consistent with how we've done all other joint ventures," Schramm said.

Layoffs of employees are unlikely, Holmgren said. "Job descriptions may change but in busy practices like we have, rarely are there any significant layoffs."

He and Schramm said the merging of the two services under the joint venture will enable both Rice and ACMC to enhance quality and use their resources more cost-effectively.

Improvements in efficiency are becoming increasingly critical for local health care, Holmgren said. "It's a trend of the future that we have to pay attention to overall costs. ... It's going to be the theme of the next five to 10 years and beyond. We just have to continue to look for opportunities in the future where both organizations benefit and patients benefit."

Combining forces to provide anesthesia and sleep medicine also will help set the stage for these two services to grow, Schramm said.

Under the Willmar Medical Services joint venture, Rice and ACMC also operate the Willmar Surgery Center, the Willmar Cancer Center, the outpatient Willmar Diabetes Center and medical imaging services. Since the joint venture was established in 2008, the two partners have built a new integrated cancer center and invested in new state-of-the-art imaging technology. Their most recent project, which began this spring, is a remodel of the medical imaging space at Rice Memorial Hospital.

Anne Polta

Anne Polta covers health care, business/economic development and general assignment. Her HealthBeat blog can be found at Follow her on Twitter at @AnnePolta.

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