Duluth-based Essentia Health is investing $14 million to expand its clinic in Grand Rapids and become partial owner of a surgery center that has operated in the northern Minnesota city for roughly a decade.
The moves come less than a year after Minneapolis-based Fairview Health Services took over the hospital in Grand Rapids through a merger agreement designed to preserve and expand health care services in the community.
With a population of about 11,000 people, Grand Rapids is emerging as another example of how health care in greater Minnesota increasingly is being shaped by competition among big regional networks of hospitals and clinics.
"Essentia, which is already present in that part of north-central Minnesota, has determined that it's in its interest to expand that presence — no doubt motivated in part by the new competition from Fairview," said Allan Baumgarten, an independent health care analyst in St. Louis Park.
Large health systems are willing to make the investments, Baumgarten said, so that patients from smaller towns travel to the system's large regional hospitals for specialized care.
"You would rather have them come into your system," he added, "than go to your competitor."
Essentia Health operates 15 hospitals, 75 clinics and seven long-term care facilities across northern Minnesota and portions of North Dakota, Wisconsin and Idaho. The system operates the largest hospital in Duluth, and employs about 15,000 people.
Fairview is one of the state's largest operators of hospitals and clinics, including the University of Minnesota Medical Center in Minneapolis and a recently completed merger with the St. Paul-based HealthEast system. Fairview also runs four clinics in northern Minnesota plus a hospital in Hibbing.
