Park Nicollet to close Hopkins clinic and lay off 240 workers

In response to a sagging economy, Park Nicollet Health Services said Tuesday it would shut down a clinic in Hopkins and consolidate some mental health services - moves that will result in 240 employees losing their jobs.

By JANET MOORE, Star Tribune

Last update: May 13, 2009 - 9:52 AM

The recession in Twin Cities health care claimed another victim Tuesday when Park Nicollet Health Services announced that it will close a clinic in Hopkins, consolidate mental health services and lay off 240 employees.

Park Nicollet, which owns Methodist Hospital in St. Louis Park and a chain of medical clinics, already has eliminated more than 490 positions in the past six months, a result of its diminished investment portfolio and a decline in the number of patients because of the recession.

Like other hospital systems in the Twin Cities and nationwide, Park Nicollet is dealing with more unpaid medical bills from patients who have lost their jobs and or have high-deductible health insurance coverage. Reduced payments from government programs have also contributed to the squeeze.

Other local health care organizations have cut employees in the past year because of the recession, including Fairview Health Services, Allina Hospitals and Clinics and North Memorial Health Care.

Park Nicollet CEO David Wessner said in a statement that Tuesday's announcement completes the system's plan to consolidate services and reduce costs. "We're confident that Park Nicollet will continue to be a local and national leader in providing high-quality health care," he said.

Allan Baumgarten, a Twin Cities-based independent health care analyst, said the latest efficiencies could be enough to get Park Nicollet through the current slump.

"I'm feeling optimistic about them,'' Baumgarten said. "If they make it through next two quarters, then maybe the economy will pick up, they'll get some benefit from the [federal] stimulus package, some federal expansion of health insurance coverage, and, hopefully, investments will come around. When the cost of credit comes back to more reasonable levels, that will help too, because I think they've extended themselves quite a bit.''

The latest round of consolidation includes closing the Hopkins clinic this fall, a move that will cause 29 employees, including nine clinicians, to be transferred to other jobs.

In addition, mental health services at Park Nicollet's Minneapolis, Bloomington and Prairie Center clinics will be consolidated into clinics in Eden Prairie and St. Louis Park. The St. Louis Park clinic will add more evening and Saturday hours for mental health services.

The recently opened $29 million Park Nicollet Melrose Institute for Eating Disorders in St. Louis Park is not affected by Tuesday's announcement.

Prior to the reductions announced Tuesday, Park Nicollet employed 8,140 people.

Janet Moore • 612-673-7752

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