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Olivia hospital, clinic merger discussion to move forward

OLIVIA -- The Renville County Hospital and Prairie Family Practice medical clinic have resumed formal discussions about a proposed merger. The board of the county-owned hospital voted this week to take discussions into the next phase, which will ...

OLIVIA -- The Renville County Hospital and Prairie Family Practice medical clinic have resumed formal discussions about a proposed merger.

The board of the county-owned hospital voted this week to take discussions into the next phase, which will involve a financial analysis, financial projections and development of a proposed organizational structure and governance structure.

Previous talks about merging the two organizations stalled last year after two years of research and discussion. A task force had previously recommended integrating the hospital and the medical clinic.

This time around, the hospital's administrator, Tim Middendorf, and clinic administrator David Dunn met at length with officials from the Chippewa County-Montevideo hospital and clinic to learn more about how the two Montevideo entities completed a successful merger.

"That didn't take place previously. We have come this far because of what we have learned from exploring this last time," said Dolores Nelson, chairman of the Renville County Hospital Board.

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Said Dr. Paul Thompson, "We are committed to the process." Thompson is a physician with Prairie Family Practice.

The conceptual model that has been proposed calls for:

- Having Renville County Hospital purchase the Prairie Family Practice clinic.

- Continuing county ownership of the combined entity. Together, the hospital and clinic could further develop policies and practices that address health-specific needs, thus setting the stage for carving out the hospital and clinic's uniqueness within the county's structure. The feasibility of converting the entity to a nonprofit 501c3 would be considered and discussed within a time frame of two to four years, after the initial transition is past.

- Studying the feasibility of creating a limited liability corporation to employ the physicians. This move would protect physician privacy and give them more control over their benefit packages.

- Developing a new board structure that includes appointments by the Renville County board of Commissioners. Although the County Board would have some representation on the hospital board, the majority of the hospital board members would be drawn from the public and from the physician staff.

Officials believe that by combining the hospital and clinic, the two organizations will improve their ability to recruit medical staff and solidify their market position. It also would allow the physicians to get out of the role of clinic management and focus instead on patient care.

Key concerns that must still be addressed include how to maintain privacy about business and compensation issues when the entity continues to be county-owned. Requirements for governmental ownership could potentially slow down operational and strategic processes.

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There also is a perceived financial risk to the hospital in buying a medical clinic.

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