Hennepin County Board approves HCMC merger

  • Article by: KEVIN DUCHSCHERE , Star Tribune
  • Updated: November 29, 2011 - 9:35 PM

The hospital will now employ its own doctors, a move expected to save money and improve health care.

After 30 years as separate organizations, Hennepin County Medical Center and its doctors soon will be working under the same operational umbrella, a move expected to save millions of dollars.

The Hennepin County Board on Tuesday approved a complicated merger of HCMC and Hennepin Faculty Associates, the independent physicians' group, that will cut costs and pave the way for a new focus on preventive care.

The merger, said Commissioner Jan Callison, will "further health reform, improve health care outcomes, keep county costs down."

As of Jan. 1, Hennepin Faculty Associates (HFA) will be absorbed into Hennepin Healthcare System Inc., the public subsidiary that operates HCMC's trauma and academic centers in downtown Minneapolis as well as private clinics around the Twin Cities.

HFA has about 1,000 employees, including about 340 physicians. Roughly 30 jobs will be eliminated to avoid duplicative positions in billing, collections and human resources. The merger includes the Minneapolis Medical Research Foundation, an HFA subsidiary.

Patients shouldn't notice any changes, other than having to pay only one bill.

Most health systems today have doctors on their payroll, including Park Nicollet and the Mayo Clinic in Rochester. Officials have been working on the merger for at least 18 months and visited integrated operations as distant as Denver and Richmond, Va.

The merger is expected to save $9 million a year for each of the first two years, not counting one-time expenses of $5 million that will be shared by HCMC and HFA. The doctors' group will eventually disappear. HCMC's annual budget is $600 million, and HFA's is $150 million.

Commissioner Randy Johnson noted the irony that the hospital and the doctors split about 30 years ago for many of the same reasons now cited for bringing them together: the marketplace's changing economics and to better meet patients' needs. The models must change with the times, he said.

"This was a tough slog to get done, and it is a very significant move in the development of Hennepin County Medical Center," he said.

Staff writer Jackie Crosby contributed to this report.

Kevin Duchschere • 612-673-4455

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