DULUTH – Essentia Health is partnering with Moose Lake's Mercy Hospital in a move that would expand the Duluth-based provider's regional footprint and shore up the rural hospital's finances.
"It's a scary time for small hospitals," said Dr. Jon Pryor, Essentia's president of operations in northeast Minnesota and northwest Wisconsin. "There's safety in numbers."
Mercy's board voted to join forces with Essentia on Monday after requesting partner proposals earlier this fall. While details of the arrangement won't be finalized until next year, Pryor said Mercy would be "totally integrated" with Essentia, and the partnership would do away with the $500,000 regional tax levy supporting the 56-year-old hospital.
Mercy Hospital CEO Mike Youso said in a statement that "a strong partner who shares our mission and values is critical to the hospital's future success."
Board members felt Essentia could help recruit doctors and other needed employees; Mercy Hospital is Carlton County's fourth-largest employer.
The partnership joins a trend toward consolidation among rural hospitals across the country, and today a majority of Minnesota hospitals are in some way affiliated with a larger organization, said Wendy Burt, spokeswoman for the Minnesota Hospital Association.
Mercy Hospital is one of the state's 32 hospitals in financial distress, according to the Department of Health, meaning it had operating losses for much of the past decade.
"In greater Minnesota, the concerns about financial pressures are magnified," Burt said. "And they have additional challenges in recruiting and sustaining a workforce."
Registered nurse Marisa Beck said staff are concerned about what might happen to benefits, retirement, contracts and job security as details of the partnership are decided.
"We all take pride in what we do, and we want to be able to continue to offer those services and hopefully grow them with Essentia," said Beck, co-chair of the Minnesota Nurses Association unit at Mercy Hospital. "It's the uncertainty of it all — we're having to sit back and see how things unfold, and hopefully it will be for the best."
Pryor said Essentia doesn't intend to slim down its new affiliate.
"We have to be respectful of the fact that whenever there's a change like this it makes people nervous," he said. "We also have to remind everyone there is a worker shortage. We don't want anyone to lose their jobs — we want the opposite to happen."
Essentia now provides services in more than 60 cities across northern Minnesota and Wisconsin, eastern North Dakota and in Idaho, though its expansion hasn't always gone smoothly.
In 2012, when Essentia bought the hospital in Sandstone, Minn., that it had long managed, the community hospital's board saw it as a hostile takeover.
This time, Mercy's board is asking for the partnership.
"Both sides are excited about formalizing this," Pryor said. "We think it's a win-win."