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Paynesville Area Health Care System studying options for restructuring

PAYNESVILLE -- Directors of the Paynesville Area Health Care System's Hospital Board will be exploring restructuring options to continue to provide a sustainable health care system.

Following the recommendations from a recent strategic planning meeting, financial and organizational studies, along with an internal senior housing collaborative committee, the board took no formal action on Oct. 27, but asked for more information to help make responsible decisions for the future of PAHCS.

Driven by the financial need to make significant capital improvements to many of its buildings and meet the current and future expectations of patients and residents, the board asked the executive council to gather the following information:

- Release a request for proposal to see if prospective buyers are interested in purchasing the Hilltop Care Center or all senior housing entities.

- Transition 700 Stearns Place from independent senior living to an assisted living facility.

- Investigate the option of retaining ownership and operation under a separate corporation.

- Conduct a feasibility study to build a new hospital/clinic.

This task will take several months and patients, residents, families, employees, and members of the hospital district will be informed throughout this process, said Bobbe Teigen, chief executive officer.

Teigen said small, rural health care organizations rely heavily on state and federal reimbursements and are facing significant challenges with health care cuts and legislative changes.

"The practical value of strategic restructuring is a way to respond to both challenges and opportunities while continuing our commitment as an independent health system,'' said Teigen.

"It is very clear through our board of directors that our focus remains on our mission of delivering quality care to our patients and residents. We are dedicated to remaining an independent health care system and meeting the future health care needs of our communities," Teigen said.

Unfortunately, there are several financial disadvantages to having long-term care facilities as part of a critical access hospital structure, said Kirk Johnson, chief financial officer.

"The amount of additional debt necessary to renovate our facilities to meet our patient and resident needs is beyond our financial capabilities. We need to look at ways in which we can grow and continue to provide multi-specialty services and yet remain financially sound,'' he said.

Teigen said questions, concerns and comments are welcome.

Staff reports