New River Medical Center, an independent 25-bed hospital in Monticello, Minn., has decided to merge with CentraCare Health System.
The decision comes as reform efforts prompt a fresh wave of consolidation across the health care industry, as doctors' practices, clinics and even large hospital systems fear they won't have the resources to compete in the years ahead.
New River Hospital already shares operations at its cancer clinic and a primary care clinic with St. Cloud-based CentraCare. During a months-long evaluation, New River also considered partnerships with Fairview Health Services, as well as Allina Health and North Memorial, spokeswoman Joni Pawelk said.
CentraCare will host a joint meeting of its three boards of directors on Thursday to vote on whether to proceed.
In an e-mail sent after the New River board's decision Monday evening, CEO Marshall Smith noted CentraCare's willingness and ability to address the hospital's "must-haves," which included guaranteeing a $16 million bond debt which was used for a recent expansion and remodeling.
New River Medical Center sits about halfway between St. Cloud and the Twin Cities metropolitan area. Affiliating with a large health system allows New River to improve access to physicians, grow market share, improve availability of financial resources and prepare for health reform, according to a news release.
The nonprofit hospital has considered opportunities to merge a number of times. In 2006, the board voted to remain independent and decided to form joint ventures instead. It brought on CentraCare and North Memorial to help operate its hospital cancer center, and also joined with CentraCare at its Big Lake clinic, where CentraCare operates a dialysis center.
CentraCare Health System operates hospitals in St. Cloud, Long Prairie and Melrose. It will add a fourth in Sauk Centre on Dec. 1. With 7,000 employees, it is central Minnesota's largest employer.
Should CentraCare decide to proceed, the process is expected to be complete by the end of 2013, Pawelk said. CentraCare spokeswoman Jeanine Nistler said the process will determine the governance and management structure of the affiliation.
Jackie Crosby • 612-673-7335