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New health care chapter to open with Carris Health

Erica Dischino / Tribune Michael Schramm, Rice Hospital chief executive officer, left, and Cindy Firkins Smith, Affiliated Community Medical Centers chief executive officer, wait Wednesday to sign the Carris Health partnership agreement. The signing to create the new subsidiary was conducted at the Affiliated Community Medical Centers in Willmar.1 / 8
Erica Dischino / Tribune Marv Calvin, Mayor of Willmar, from left, Michael Schramm, Rice Hospital chief executive officer, and Cindy Firkins Smith, Affiliated Community Medical Centers chief executive officer, wait to sign the Carris Health partnership agreement Wednesday at the Affiliated Community Medical Centers in Willmar.2 / 8
Erica Dischino / Tribune Health care leaders who are part of the new Carris Health partnership chat at a ceremony Wednesday at the Affiliated Community Medical Centers in Willmar. Carris Health is the new health care entity that partners Affiliated Community Medical Centers and Rice Memorial Hospital as a subsidiary of CentraCare Health.3 / 8
Erica Dischino / Tribune Health care leaders who are a part of the new Carris Health partnership sign the agreement at a ceremony Wednesday at the Affiliated Community Medical Centers in Willmar. 4 / 8
Erica Dischino / Tribune Health care leaders who are part of the new Carris Health partnership chat at a ceremony Wednesday at the Affiliated Community Medical Centers in Willmar. Carris Health is the new health care entity that partners Affiliated Community Medical Centers and Rice Memorial Hospital as a subsidiary of CentraCare Health. 5 / 8
Erica Dischino / Tribune Willmar City Council member Audrey Nelsen, right, speaks with Kathy Dillon of Rice Memorial Hospital at the Carris Health signing ceremony Wednesday at the Affiliated Community Medical Centers in Willmar.6 / 8
Erica Dischino / Tribune Willmar City Council member Audrey Nelsen, from left, greets Mayor Marv Calvin along with Dr. Deb Peterson of Affiliated Community Medical Centers at the Carris Health signing ceremony Wednesday at the Affiliated Community Medical Centers in Willmar.7 / 8
Erica Dischino / Tribune Health care leaders Michael Schramm of Rice Memorial Hospital, from left, Doug Allen of Rice Memorial Hospital, Willmar Mayor Marv Calvin, Cindy Firkins Smith of Affiliated Community Medical Centers and Kenneth Holmen of CentraCare sign the agreement at a ceremony Wednesday at the Affiliated Community Medical Centers in Willmar.8 / 8

WILLMAR — At the stroke of midnight Sunday, Carris Health will officially come into being, launching a new chapter in local health care.

The new entity merges Affiliated Community Medical Centers and Rice Memorial Hospital into a nonprofit subsidiary of CentraCare Health.

Leaders from the three organizations, Willmar Mayor Marv Calvin and representatives of the Willmar City Council and Rice Memorial Hospital board gathered Wednesday for a signing ceremony to mark the occasion. Against a backdrop printed with the Carris Health name in blue and green, they posed for official photos and shook hands.

"To think we'd get all of this work done in a year, and with this complexity, is frankly amazing," said Dr. Cindy Smith, president of ACMC. "It's been with the dedication and a lot of hard work by all the teams."

Staff at ACMC and Rice are ready to move forward Jan. 1, said Smith and Mike Schramm, Rice Hospital chief executive.

"I see real excitement," Schramm said.

Patients are unlikely to see anything immediately different, said Smith and Schramm, who will serve as co-CEOs of Carris Health.

But over time, changes will start to emerge. Some will be visible: new signs, new email addresses, new logos. A new senior leadership team is expected to be announced in mid-January.

Other changes will happen more slowly.

With the start of the new year, work will begin on developing a long-term strategic plan and priorities, Schramm said. A culture-building initiative was launched this year and will continue into 2018. By mid-2019, Carris Health will be on the same electronic health record platform as CentraCare.

The organization will continue to be challenged by change, Smith said. "We'll just have to work through that. The staff understands that we're creating something new and promising for the future of health care delivery in west central Minnesota."

The intent of the three organizations to pursue an affiliation agreement was announced back in May. Negotiations were finalized late this fall with approvals by ACMC physician shareholders and by the Willmar City Council on behalf of the city-owned hospital.

Carris Health brings together three of the area's largest health care organizations, with a goal of establishing a regional hub for delivering health care services. Rice is one of the largest independent city-owned hospitals in the state, while ACMC is among the largest independent physician-owned medical groups.

It's the latest in an ongoing national trend of hospital mergers, physician practice buyouts and the development of regional systems that provide health care across the spectrum, from hospital inpatient care to outpatient medical care, specialty care and senior services.

By joining CentraCare, Rice and ACMC are becoming part of the ninth-largest health system in Minnesota, with a combined workforce of 12,600 serving a population of half a million rural Minnesotans.

Leaders of the three organizations said it will better position them to preserve local access, maintain a qualified workforce, invest in capital improvements and remain financially viable while delivering high-quality care.

"We're going to be in a much better position to adapt," Schramm said. "I really don't see any downside. It's the right thing to do for the community."

Achieving sustainability in the face of increasing pressures on the health care industry was at the forefront throughout the talks with CentraCare, which began more than two years ago as informal exploratory conversations.

"Delivering health care the way we have in the past is not sustainable anymore," Smith said. Without a new business partnership, ACMC would eventually "have ceased to exist," she said.

ACMC and Rice could have sought other partners, but CentraCare has the values, philosophy and regional presence that made it the best fit, Smith and Schramm said.

"We were in the position to pick our partner. We believe we have the right partner," Schramm said.

"The sum of the parts is greater than the whole" is how Ken Holmen, chief executive of CentraCare Health, describes the addition of Carris Health to the system.

"I think everybody's very energized by it," he said.

He commended the City Council, the hospital board and the ACMC board for their work on the partnership agreement.

"We are now in the same family. We have a shared sense of destiny," he said.

Anne Polta

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

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