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Published September 11, 2009, 12:00 AM

Hospital CEO says merger could help rural areas

A merger between North Dakota’s largest hospital and a South Dakota-based health system could create the largest rural health network in the country, the hospital’s chief executive said Thursday.

By: By Dave Kolpack / Associated Press, INFORUM

A merger between North Dakota’s largest hospital and a South Dakota-based health system could create the largest rural health network in the country, the hospital’s chief executive said Thursday.

The merger of MeritCare of Fargo and Sanford Health of Sioux Falls, S.D., is expected to be completed by the end of the year. The new health system would serve about 2 million people in North Dakota, South Dakota, Minnesota, Iowa and Nebraska.

Roger Gilbertson, the MeritCare CEO who plans to retire when the deal is finished, told legislators at a Thursday meeting on health care that the merger could help rural areas that are facing the lowest Medicare reimbursement rates in the country rates and struggling to recruit doctors.

“One of the greatest areas of growth in the next decade will be regional health care,” Gilbertson said. “Most likely, at the end of the day, we will be the largest provider in the nation of rural health care.

“This isn’t about two big cities, Sioux Falls and Fargo, it’s about delivering services to rural areas.”

Rep. Jasper Schneider, D-Fargo, said many of MeritCare’s customers are comfortable with the current system and nervous about joining with another hospital.

“I don’t know if we have all the answers on what is necessarily good for the rural parts of North Dakota,” Schneider said after the meeting. “There’s a lot to be seen with this merger, if that’s what you want to call it.”

One plan would be to develop a pool of primary care physicians who would work for a couple of weeks straight and then have a couple of weeks off, making the job more attractive, Gilbertson said. The merger also could help medical schools in North Dakota and South Dakota work together on training and residency programs to keep graduates in the area, he said.

Gilbertson said MeritCare is coming off its first year of losses in a century. The merger would give the system access to about $700 million in combined cash reserves.

“Bigger isn’t always better, but it often delivers,” Gilbertson said. “Resources are critical.”

Rep. Rick Berg, R-Fargo, said after the meeting that he wants the hospital to have the money it needs to increase services, but some people are worried the move is a takeover by Sanford and not a merger.

“Unfortunately that answer is not going to be clear for 10 years,” Berg said.

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