A consortium of not-for-profit providers will begin negotiations to buy 73-bed Itasca Medical Center in Grand Rapids, Minn., after Itasca County abandoned talks with what would have been the state's first for-profit health system.
The providers, known as the Partners, are Allina Health System, Minneapolis; Benedictine Health System, Duluth; and Duluth Clinic.
The coalition was recruited by a group of about 50 Itasca residents who wanted to ensure local control of the hospital (May 6, p. 28). Tom Jackson, a leader of the group and a local pharmacist, will take part in the negotiations.
Itasca County is in northeastern Minnesota, about 160 miles north of the Twin Cities. Some 40,000 people live in the area. The medical center earned $122,600 on total revenues of $11.1 million in the first six months of 1996.
An agreement allowing 90 days' negotiation between Itasca County and the Partners is being drafted. County commissioners voted 5-0 last week to pursue the sale.
Negotiations with Champion Healthcare Corp., a for-profit chain based in Houston (See related story, p. 21), were terminated after two months on a 3-1 vote by commissioners in July. Residents of the county had protested a sale to an out-of-state, for-profit provider.
A Champion executive didn't return telephone calls requesting comment.
The decision to pursue a deal with the Partners means less money for the county. McGladrey & Pullen, a Minneapolis accounting firm working with the county, valued the Champion proposal at $21.2 million. The Partners proposal is worth about $20 million. That includes a pledge to replace county facilities with a new $12 million hospital owned by the Partners.
"We hope we're going to see a model rural healthcare system here," Jackson said. "We really do."