The International Falls Economic Development Authority Commission is asking the Rainy Lake Medical Center Board to renew integration talks with Essential Health representatives.
EDA President Gail Rognerud and Commissioners Pete Kalar and Cynthia Jaksa voted in favor of the action, which includes a request the board consider a mediation process if needed to move toward integrating the hospital into Essentia’s system.
Commissioner Bob Anderson was absent from a portion of the discussion and the vote, citing a conflict of interest as a member of the RLMC Board, and Commissioner Paul Eklund abstained from the vote, saying as a hospital employee he is too close to the issue. The EDA Commission is made up of the International Falls City Council.
The EDA Commission heard from its advisory board concern negotiations leading from affiliation toward full integration between the board and Duluth-based Essentia Health have been mutually ended in August.
Rognerud, a member of the board, told the commission board members have voiced concern about the lack of an integrated hospital and are also hearing concerns about the issue from members of the community.
Kalar said he, too, has heard concern from residents and said a full-service hospital is an important asset for a community seeking economic development opportunities.
Before leaving the meeting, Anderson asked if the advisory board had been told full integration of the hospital with Essentia had the potential to see up to 26 jobs lost locally to Duluth.
Other commissioners said they had never been told that, and said because of confidentiality agreements cited by board members, little — other than media reports — is known about what was discussed behind closed doors during integration talks.
Rognerud cited an August news report in which Dan Nikcevich, president of Essentia Health East, said Essentia offered an employment guarantee for all jobs for two years.
Anderson asked what would happen after two years. He told The Journal Tuesday he believed when the job loss might begin was “something negotiable.”
Anderson said the potential number of local job loss was estimated by Bob Haley, RLMC interim CEO of the hospital, in preparation for a meeting about one year ago with the Koochiching County Board and International Falls City Council. He said the number of potential job cuts was not a part of the integration negotiation talks that have now ended.
Nikcevich said Tuesday he had no idea where Anderson got the number.
“In fact,” he told The Journal, “because of the concerns we heard about the potential for job loss, we put in place the employment guarantees. What would happen after two years? I don’t know that. No one knows that.”
He said Essentia has proposed no loss of employment and tried to “provide some stability and eliminate the message about job loss and, in fact, focus the message the best we can with integrated care for the patients of the International Falls community.”
In 2009, Essentia Health and Falls Memorial Hospital entered into three agreements: an affiliation agreement and management services and professional services agreements. As part of the new relationship, Falls Memorial Hospital and Essentia Health-International Falls Clinic became know as Rainy Lake Medical Center, with hospital and clinic campuses. Half of the RLMC Board are appointed by Essentia, a majority of whom live in the Falls area. The other half are appointed by the prior Falls Memorial Board, of which board members may continue to appoint themselves for subsequent terms or can name their replacements. These members refer to themselves as Falls Memorial trustees.
Meanwhile, Anderson, a Falls Memorial trustee, told The Journal RLMC Board members Tuesday received copies of the confidentiality agreement between Essentia and RLMC Board. He said three attorneys — one each representing RLMC and Essentia, and one representing the RLMC Board of Trustees, are working on the dissolution of affiliation and other agreements, referred to as “unwinding.”
“Until this thing is completely unwound, we’re just trying to have folks understand that we’re going back to where we were prior to 2009 (when affiliation began),” said Anderson. “Affiliation has not worked out for whatever reason. No one is pointing fingers at one side or the other. It just did not work out and full integration is not something the Falls Memorial trustees were interest in giving up their hospital (to).”
Anderson said he understands the change in direction is unsettling to some members of the community and said both RLMC and Essentia are making plans for moving forward. He said he hoped the community would be patient during the unwinding.
“Service will be there both at the clinic and hospital, just as it has been for years,” he said. “We have good physicians at the clinic. Many of us have been patients of those physicians and specialists with St. Mary’s Duluth, now Essentia, in the past and will continue into the future.”
Anderson also said the RLMC Board is not seeking full integration with any other entity. “We are talking to other entities about what services they might bring to International Falls — to an independent hospital.”
Prior to action Monday, EDA commissioners wondered if action requesting details of the negotiations would have a polarizing effect on the board. Rejecting that idea, they instead agreed to urge the board to reconvene talks.
EDA Director Shawn Mason said more information about the negotiations may help the community better understand the decision to end the talks.
She pointed to an expanded kitchen and laundry built into to the new facility of Good Samaritan Society — International Falls to accommodate a new hospital anticipated by the community.
Steve Shermoen, a member of the EDA Advisory Board, told the commission the last sentence of an editorial published by The Journal in August — “We urge both sides to consider coming back to the table in an effort toward compromise in the best interests of this community.”- summed up the intentions of board members in bringing the issue to the EDA Commission.
“We’re not looking to assign blame,” he said, “but to jump start the process and get people back to the table to work out their differences.”
Mason told the board in April she had asked Nikcevich via email to consider consolidating future growth in processing, coding and claims at Essentia’s 58 centers in the Midwest in International Falls. She said the centers had 87 job openings at that time in those kinds of positions. She said the cool climate of International Falls would be beneficial for a data processing and storage center because of the low energy costs compared to warmer climates.
