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Paynesville Press - March 29, 2006

PAHCS considering clinic in Spicer

By Michael Jacobson

The Paynesville Area Hospital District Board of Directors took the following actions at their meeting on Wednesday, March 22.

•The board approved their financial statements for February, which showed a profit of $165,750. Thru five months of their 2006 fiscal year, the Paynesville Area Health Care System - the operating name for the hospital district - has earned a profit of $484,000, which is slightly ($23,000) above budget.

•The board approved these medical staff appointments. Rebecca Hafner-Fogarty, M.D. (family practice), and Orleen Hoffman, M.D. (pulmonology), were appointed to the consulting staff. Hafner-Fogarty will work two days per week at the Richmond Medical Clinic, while Hoffman will work in the specialty clinic, which is adding pulmonology. Daniel Truax, P.A.-C, was added to the ancillary staff; he is a physician's assistant who works with the neurosurgeon at PAHCS. Zane Craig, D.O. (OB/GYN), was appointed to the active staff, having completed his provisional period.

•The board was informed that construction of the new chapel, or meditation room, the first project for the PAHCS Foundation, should start within the next couple of weeks.

•The board was informed that its building and grounds committee does plan to work on a master site plan, addressing space issues, parking issues, and entrances for PAHCS's main campus in Paynesville.

•The board was informed that Joint Conference Committees - between the board and the Paynesville Medical Group - would now be held semi-annually (in April and October) instead of quarterly.

•The board approved a recommendation from its long-term care task force to reduce the number of beds at the Koronis Manor and Hilltop Care Center, both skilled nursing homes. The Koronis Manor in Paynesville would be reduced from 64 beds (63 used currently) to 57 beds, a reduction of seven, while the Hilltop Care Center in Watkins would be reduced from 60 beds currently to 55 beds, with a further later reduction to 50 beds. PAHCS currently loses approximately $500,000 per year in operating these two facilities, and the bed closures would hopefully reduce that loss by $200,000 per year. Full story

•The board was informed that 700 Stearns Place had been licensed with the state in order to provide supplementary services - bathing, dressing, etc. - with PAHCS staff. This senior housing previously did not have a license, so these services could only be offered through home health.

•The board approved pursuing opening a clinic in Spicer and authorized administration to negotiate and sign a lease. Administration told the board that the city of Spicer had approached PAHCS about opening a clinic in that city; they recommended the move as part of the system's focus on expansion on the Highway 23 growth corridor.

The city of Spicer is offering PAHCS a $200,000 loan from its economic development authority at one percent interest over five years. City officials are eager to work with PAHCS on the clinic, CEO Steve Moburg told the board.

Spicer does not have a medical clinic currently, with other providers operating a clinic in New London and clinics in Willmar. The board discussed this competition, and Spicer's closeness to Willmar before agreeing to pursue it.

PAHCS opened a medical clinic in Cold Spring in November 2005, which is 19 miles from Paynesville, but roughly equadistant from the Paynesville Area Hospital and the St. Cloud Hospital. Spicer, board member Ross Amundson of Eden Lake Township noted, is roughly twice as far from Paynesville (18 miles) as it is from Rice Hospital in Willmar (nine miles).

Moburg told the board that administration had considered the risks of a new clinic but also considered the added population as a great asset to the stability of the district. PAHCS understands that there is competition in this market and is planning a full-service clinic.

One advantage the Spicer proposal enjoys is a location near the pharmacy in the Green Lake Mall. The lack of a local pharmacy can drive patients to go for medical care out of town, said clinic manager Dorothy Winkelman and chief of staff Dr. Allen Solum, since patients figure they will have to drive anyway to get their prescription.

The costs of this clinic would be less than the clinic in Cold Spring, with the proposed lease at roughly half the rate. The new clinic could be funded by the $200,000 loan and from operations, said CFO Kirk Johnson.

The key to proceeding with the clinic in Spicer is the ability to recruit new doctors to staff it, said Moburg. PAHCS was hoping to hear from one potential physician interested in coming here last week and has two more scheduled to come this week. Moburg was confident that PAHCS would be able to recruit a new physician in the six months it would take to get the clinic ready to open but called recruiting the one possible stumbling block in establishing a clinic in Spicer.

Moburg also told the board that PAHCS would not close any existing satellite clinics to open one in Spicer. Winkelman added that it would not make sense to move an established physician into a new territory as their existing patients would likely follow them. Moburg added that any decisions about the other satellite clinics would need to be made independently, meaning their statuses would depend on their individual performances.

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