Public weighs in on CRMC conversion plan

CROSBY--Speakers at Wednesday night's meeting to consider Cuyuna Regional Medical Center's future praised the facility and spoke passionately about its history, but differed on the path toward the future and how quickly a change should be made.

Attorney Daniel McInerney Jr. (right) answers a question during the Cuyuna Regional Medical Center’s public meeting concerning changing from a public hospital into a 501(c)3 tax-exempt nonprofit corporation held Wednesday at the Heartwood Conference Room in Crosby. (Kelly Humphrey, Brainerd Dispatch - Gallery and Video)
Attorney Daniel McInerney Jr. (right) answers a question during the Cuyuna Regional Medical Center’s public meeting concerning changing from a public hospital into a 501(c)3 tax-exempt nonprofit corporation held Wednesday at the Heartwood Conference Room in Crosby. (Kelly Humphrey, Brainerd Dispatch - Gallery and Video)

CROSBY-Speakers at Wednesday night's meeting to consider Cuyuna Regional Medical Center's future praised the facility and spoke passionately about its history, but differed on the path toward the future and how quickly a change should be made.

More than 120 people filled chairs and stood along the edges of the large meeting room at Heartwood Senior Living Center for at least three-and-a-half hours. The meeting was civil with perhaps more testimonials than questions from the public.

Richard Schiller, CRMC Governing Board chairman, said everyone was at the public meeting because they cared about the medical center. Schiller said the proposal for a change in how CRMC is governed is being made deliberately and carefully. The CRMC Governing Board is considering making a change from its history as a public hospital with elected board members overseeing operations to a nonprofit. The change would effectively end the elected board's oversight of the medical center's operations. Instead, CRMC's governing board would lease the medical facility and its operations to a nonprofit corporation for a term of 30 years. The elected district board would remain, but a newly established nine-member board would oversee the medical center's operations. It would consist of two members of the district board, two physicians, the medical center's CEO and four community members who would be picked to serve by the board. The nine new board members would serve three-year terms and could serve three terms.

The physicians at the medical center expressed a strong desire to have a presence on the board of directors and couldn't do so in its current makeup without running for office. When the hospital and clinic integrated, the board agreed to look at a move to a 501(c)3 and in the interim a leadership council was established to give the physicians a means for input to the hospital district.

Several physicians and medical staff members said making this change was the best option to grow robustly and remain independent and not part of a larger multi-hospital medical system, which some said would reduce CRMC to minor surgeries and urgent care. Others from the public, retired and former employees questioned the speed with which the change is being proposed, and asked for more time and more meetings to better understand the proposal and what it could mean.


A repeated concern from the public related to the future of the Care Center, the nursing home attached to and financially subsidized by the medical center. The proposed conversion comes with a promise to continue the Care Center operations for at least five years, with a one-year notice if the Care Center operations were to be discontinued.

A long-term lease includes a purchase option but it couldn't be exercised for 10 years after the lease began and then the district could decide to dissolve. Any affiliation with a multi-hospital system would require the district board's consent. There are options to dissolve the lease agreement if, for example, the nonprofit organization wasn't paying the rent, went bankrupt or dissolved.

Lorry Massa, COO of the Minnesota Hospital Association, was invited to speak, saying in Minnesota in the last decade 15 public hospitals have converted to private not-for-profit status.

Of the 143 hospitals in the state, 26 remain as public-owned, Massa said. Eight are district hospitals, six are county hospitals and the other 12 are city or city/county hospitals.

Mary McMillan Aulie asked about compensation for the board and the CEO under the new structure. Schiller said those have yet to be determined. McMillan Aulie said some would be more comfortable with the change if they knew issues with employees would be dealt with, saying after a conversion, employees would no longer have an elected board for protection. When other questions came up about CEO John Solheim and who would do his job evaluation, Schiller said the discussion was on the conversion not CEO evaluation.

Jackie Cluff asked why the board wouldn't allow the public, who formed the hospital, to vote in November. Others asked about a public vote on a referendum and there were also those who said they voted so the board members in office now could make that decision for them. Some asked why they hadn't heard or read more about this process. Schiller said they've worked on the proposal the past several months and it was made public through the process at some point.

Attorney Daniel McInerney Jr. of the law firm of Stinson Leonard Street represented the board saying a conversion to a nonprofit would allow the board to recruit members with particular skills in finance or marketing and could represent a larger geographic area, just as patients are coming from outside the hospital's district. Other positives listed for making the conversion came from an ability of nonprofits to invest and have higher rates of return that are not open to public hospitals. McInerney said with CRMC's budget open to the public, it makes it harder to compete in the marketplace with other nonprofits as competitors. No changes were expected for employees and they would in effect be hired by the nonprofit entity.

Sharon Roy, Deerwood, a nurse for 30 years and now in Crosby said this is the third time she's been through this conversion. Her first hospital didn't do it and was swallowed by another system. The second one, Roy said, was Hennepin County Medical Center and it made the organization more solvent, able to make quick changes and provide better pay.


"From a business standpoint this makes sense to me. I just want to make sure I can live in a community I have really fallen in love with," Roy said.

Erik Severson, orthopedic surgeon, said it was important to do the conversion. He said he understood the paranoia of this coming after a difficult last year with concerns raised by employees, former employees and those with loved ones in the Care Center. Some of those concerns included a hostile work environment and staffing issues to provide proper care at the Care Center. Severson said how some people feel about the CEO isn't the issue, instead he said it's about stability.

Jon Wittnebel, Wolford Township, who has been a regular attendee at CRMC board meetings, said more thorough understanding is needed. He said right comes first and fast comes second. Several echoed that concern. Bob Hoeft, Deerwood Township, said there has been a lack of information and few opportunities for such question and answer sessions. He suggested more sessions to do that and focus groups.

Hoeft said this move to go from public to nonprofit came out in the midst of a lot of acrimony over personnel issues so there are trust issues.

"Trust issues are big so it makes it really difficult for us in the community to say just go ahead and jump right in," Hoeft said. "Trust is a big issue."

Janie Stanton, Perry Lake Township, said physicians made it seem as though those who did speak out about issues were doing something wrong. Stanton asked if the elected board representatives considered how the public feels about the conversion and why don't they put it to a public vote. She said they want the board of directors to listen and she isn't against the nonprofit but feels it is coming too fast.

Deerwood Mayor Mike Aulie spoke in favor of the conversion, saying it's a different issue than the concerns the employees and others expressed earlier. Aulie pointed to CRMC's growth saying no one anticipated what it would become. He said questioning things is good, but they needed to trust the district board and take the faces and personalities out of the equation.

Andrew Hook, echoed sentiments of CRMC being a treasure for the area, saying it's been this successful because it is well run.


"I believe this is such an important decision for our community that we should understand exactly what is going on," Hook said, adding it shouldn't be passed on by slight of hand because once it is done, the community control will be taken away.

"When you switch it over it is not going to be accountable to us," Hook said. "We won't have this kind of meeting."

Hook said more discussion is needed because once this change is made they won't be able to turn it back. Charles Hagbert was another who was concerned about the Care Center and told the audience they were losing their voice to vote.

Throughout the night and talks partisan applause rose after speakers. The room grew quiet when Gene Bordwell rose to speak, noting he's had two heart attacks and a stroke that left him less able to move than he would like in public.

"We cannot. We cannot. I don't care if we have to walk around with baskets asking for donations we don't want to lose that Care Center," Bordwell said, adding people need to get involved.

Gordon McArthur, Breezy Point, a nurse who recently came to the community said the data is there that nonprofits work. And while change is hard, McArthur said more is risked by not doing this than doing it.

Dr. Brad Peterson, Deerwood Township and medical director at the Baxter Clinic spoke of the advantage CRMC would have in recruiting. He advocated embracing change and making forward progress necessary for growth.

Dr. Howard McCollister, CRMC chief of surgery, said this move was about remaining independent and he said if the medical center were to sell out to a Sanford or Essentia it wouldn't be the same institution and the nursing home would be gone because it is a financial drag. He said CRMC can't be the rural hospital it once was, not if it wants to survive. Challenges are greater, harder and come faster, he said. McCollister said they'll be forever grateful to those who started the hospital and kept it going but it has moved beyond that point. There are now too many pitfalls, minefields and challenges to remain independent.


Dr. Fawn Atchison tore up her prepared remarks, saying it was a tough crowd. She said CRMC was a special place created by community dreamers. Times have changed, she said and CRMC needs to change to keep up with those times and survive.

She said a new 501(c)3 board is crucial for that survival. A new board, she said, would be independent from this public pressure and this coercion from cameras and the press and free of this type of disruption. It's a new dream, Atchison said.

The board has a strategic marketing retreat planned at 3 p.m. May 12 at the Earl Bedard Room at the medical center. McInerney said the board will be meeting in a closed session in order to digest what members heard at the public meeting. He said the closed meeting will be based on a legal option the board has to meet in closed session to discuss marketing because the move to a 501(c)3 represents a contract.

Richard Schiller, CRMC Governing Board chairman, said a board vote on whether to convert from a public hospital to a private nonprofit 501(c)3 could be soon. The board's next regular meeting is the third Monday in May.

RENEE RICHARDSON, associate editor, may be reached at 218-855-5852 or . Follow on Twitter at .

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