Marshfield Clinic Health System merging with Minnesota-based Essentia Health

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Wisconsin’s Marshfield Clinic Well being System has entered an settlement with Minnesota-based Essentia Well being to create a brand new well being care community serving elements of 4 states. The deal follows years of heavy monetary losses for the Marshfield system. 

A joint press launch from the 2 well being networks says the settlement will kind an “built-in regional well being system serving rural and mid-urban communities” in elements of northern Wisconsin, Minnesota, North Dakota and Michigan’s higher peninsula. 

“Whereas work stays to finalize our new relationship, that is one other optimistic step in our journey to outline the way forward for well being care, and to essentially remodel rural well being care in America,”stated Marshfield Clinic Well being System CEO Dr. Susan Turney, who introduced late final 12 months she’s going to step down as CEO this September.

Marshfield Clinic declined an interview request for this story. 

The assertion additionally included feedback from Essentia Well being CEO Dr. David Herman, who will function CEO of the yet-to-be-named mother or father firm of the brand new well being system.

“Every time I meet with our Marshfield colleagues, I’m excited for our future collectively and what we are able to construct and maintain to raised serve our sufferers, communities and colleagues,” Dr. Herman stated. “Occasions are undeniably difficult for rural well being care, but I’m sure we are able to meet these challenges extra efficiently collectively than we are able to individually.” 

Essentia Well being didn’t reply to an interview request for this story. 

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Tax statements from Marshfield Clinic present the challenges going through well being care organizations. From 2016 by means of 2020, the well being system had working losses of greater than $48.5 million.

Essentia Well being tax statements confirmed $4 million in losses in 2016, however remained within the black in subsequent years. 

Well being care business consulting agency Kaufman Corridor reported in April that smaller hospitals and well being techniques had already been pursuing mergers previous to the COVID-19 pandemic “to make sure their continued strategic and monetary viability” amid excessive mounted prices and growing competitors for outpatient companies. 

“As well being techniques adapt to a brand new surroundings of razor-thin — and for a lot of organizations, detrimental — working margins, we anticipate that this new wave of mergers will proceed,” the report stated. 

Throughout a June 8 listening to earlier than the U.S. Senate’s Committee on Finance, Yale College Affiliate Professor of Public Well being and Economics Zack Cooper informed lawmakers that well being system consolidations are elevating medical insurance premiums. He stated these rising prices are pushing employers to both decrease wages, sluggish hiring or lay off employees. 

“We see proof of all three occurring,” Cooper stated.

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