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04/18/18 - Redwood Area Hospital takes steps towards joining regional health system Carris Health with plans for new hospital campus

Redwood Area Hospital together with the City of Redwood Falls announced today that they have taken initial steps toward joining the new regional health system, Carris Health, a subsidiary of CentraCare Health. Redwood Falls city council voted on Tuesday night to take this action through a Letter of Intent.

Redwood Area Hospital is a vital healthcare resource for the region. This partnership brings together the shared geography, shared values and shared goals of the hospital and Carris Health system for the benefit of our patients throughout the region," said Dr. Cindy Firkins Smith, Co-CEO and President of Carris Health.

Carris Health was formed to ensure patients in Southwest and West Central Minnesota have access to comprehensive and affordable care – close to home. By partnering together, Rice Memorial Hospital, ACMC and CentraCare Health established the innovative health care delivery model in January 2018.

Redwood Area Hospital and the City of Redwood Falls have spent the past 4 months examining a potential partnership with Carris Health through an affiliation steering committee with representatives from the hospital, hospital commission, local physicians, City Council, Carris Health and CentraCare Health.

"As conversations evolved, it was exciting to see the synergies and common mission for our organizations," Explained Bryan Lydick, Redwood Area Hospital CEO. "We recognize the need for local healthcare to adapt to the future and it is clear that we are stronger together."

New Health Campus

Joining Carris Health will allow Redwood Area Hospital to create strong regional healthcare delivery for area residents. The Letter of Intent outlines a transfer of ownership to Carris Health with the health system committing to invest $60 million over the next 10 years, including a new health campus bringing both the hospital and Redwood Falls clinic together.

Goals for the new health campus are to provide a comprehensive care model, making local care less complicated, and allowing patients coordinated care with needed services and improved access to specialty care locally. The hospital and clinic also plan to transition to the same electronic medical record system, improving patient safety.

"This is an exciting time for healthcare in our community," said local physician Dr. Greg McCallum, who served on the affiliation steering committee. "Together we have potential to create a care approach that best fits with the future direction of health care for our community for generations to come."

Value to Taxpayers

The Letter of intent outlines strong financial stability for taxpayers with a payment in lieu of taxes for an additional 10 years and opportunity for additional payments based on hospital performance. Carris Health will also make lease payments for the current hospital building over the next 2 years that will offset costs for disposition of the building upon completion of the new health campus.

"In a highly volatile healthcare industry, risk and instability of healthcare finance will no longer fall on taxpayers, and the community can feel confident about the future availability of high quality healthcare through the significant financial investment CentraCare and Carris Health will make in our community," explained Keith Muetzel, Redwood Falls City Administrator. "The Redwood Falls City Council has also considered the importance of local governance and feels confident that a high degree of local control over hospital operations still exists through this transition."

In the coming months definitive agreements will be outlined for approval in June with an anticipated closing date of December 31, 2018.

Planning for the new health campus will continue in the 2nd half of the year.  Patients can continue to receive exceptional care from their local physicians and hospital throughout this transition.