After months of discussions, plans have been approved for Redwood Area Hospital to join the new regional health system, Carris Health, a subsidiary of CentraCare Health. Both Redwood Area Hospital’s commission and the Redwood Falls city council have voted to approve a legally binding transfer agreement. The business transaction is anticipated to be completed by January 1, 2019.
“Carris Health is a new entity that values rural healthcare collaboration to share expertise and resources and to ultimately keep patient care local,” explains Bryan Lydick, Redwood Area Hospital CEO. “We are excited to take this next step together to strengthen healthcare for the Redwood community.”
Initial discussions examining a potential partnership with Carris Health began in April through an affiliation steering committee with representatives from Redwood Area Hospital, hospital commission, local physicians, Redwood Falls City Council, Carris Health and CentraCare Health. In addition to strategy meetings, two listening sessions were held to for community members to learn more about the affiliation and provide input.
The approved transfer agreement outlines the transfer of ownership of Redwood Area Hospital to Carris Health, with the health system committing to invest $60 million over the next 10 years. That investment includes building a new health campus, bringing both the hospital and Redwood Falls clinic together in one building. A site for the new campus has not yet been selected.
Through the transfer agreement, Redwood Area Hospital operations, including employment, equipment, furniture and fixtures, will transfer to Carris Health on January 1.
In regards to properties, Carris Health will make lease payments to the City of Redwood Falls for the current hospital building until the new campus is complete. That lease payment will total $1.2 million. The Redwood Area Hospital Health Pavilion will be deeded to Carris Health, and the health system will lease Season’s house for $1 per year and will continue to provide end-of-life care in that residential location. The remaining houses along Veda Drive will remain property of the City of Redwood Falls.
Consistent with the letter of intent, the transfer agreement provides strong financial stability for taxpayers with a payment in lieu of taxes for an additional 10 years and opportunity for additional payments to the City of Redwood Falls up to $6 million based on hospital performance.