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SMDC-Miller-Dwan merger close to complete

Except for a few minor details, the merger of Miller-Dwan Medical Center into the St. Mary's-Duluth Clinic Health System is complete. "I expect it to be finished in a matter of days," said William "Buzz" Palmer, president of Miller-Dwan. "We're r...

Except for a few minor details, the merger of Miller-Dwan Medical Center into the St. Mary's-Duluth Clinic Health System is complete.
"I expect it to be finished in a matter of days," said William "Buzz" Palmer, president of Miller-Dwan. "We're really close to completing the integration.
"We truly believe this is the right way to go."
He had announced the pending affiliation in January. A public hearing on the merger was held and the lengthy finalization of the transaction began.
Joining its big neighbor had seemed a logical step to hospital leaders, but the process of integrating Miller-Dwan with SMDC was a two-year effort.
On Aug. 13, the Duluth City Council gave its blessing, and the district court approved the affiliation on Aug. 27.
Palmer said Thursday that there are still a few accounting things to be done and the papers had to be filed with the state, but nothing they considered obstacles.
He acknowledged the recent months have been "grinding."
As Miller-Dwan becomes part of the St. Mary's-Duluth Clinic Health System, its original secular mission will continue. Likewise, its commitment to take care of "the worthy sick and helpless poor."
To accomplish this, the medical center's assets will take two directions. Miller-Dwan will continue operating as a separate legal entity that will function as a subsidiary of SMDC.
Its commitment to the poor will continue in the form of an entity called Generations Health Care Initiatives, which will conduct charitable programs. The new corporation will be separate from SMDC in terms of management.
Generations will also develop and provide health care services for the mentally ill, as well as for underserved and disadvantaged persons, such as the low income and disabled.
Palmer said he would be involved in helping to get Generations up and running. Under the affiliation agreement, Generations will get approximately $13 million of Miller-Dwan's charitable assets.
According to the court order approving the merger, Miller-Dwan and Generations will be required to file an annual report with the state attorney general on their administration of charitable assets.
In a memorandum to his court order, Judge Terry C. Hallenbeck addressed some others surrounding the affiliation.
He agreed that the affiliation would provide economies of scale and assist avoiding duplication of services and staffing in some areas of operation.
Hallenbeck wrote: "Affiliation will provide stability and assist in the continued viability of the Medical Center"
Palmer said that without the integration Miller-Dwan would be facing difficult times in the future with costs and the problems of reimbursements.
There were long-term reasons to accomplish this, he said.
The court found that hospital officials had appropriately evaluated the issues and alternatives in selecting affiliation with SMDC.
"The capital need far exceeded what we could see the organization being able to raise," said Tom Sailstad, chairman of the Miller-Dwan Board, in a January interview.
"We looked at a number of options, and it didn't take a brain surgeon to see that 90 percent of our patients were coming from Duluth Clinic doctors, and that's probably who we need to be affiliated with."
The court also addressed the concern that Miller-Dwan's assets be used for secular purposes as distinguished from religious ones, and concluded that the affiliation would make that possible.
The judge wrote that the court understands that under the agreement, Miller-Dwan will be permitted to provide reproductive services other than abortions.
If the medical center decides to quit providing reproductive services, it and SMDC have agreed to "ensure" that such services are provided by another facility in Duluth.
By joining SMDC, Miller-Dwan becomes part of a health care system that already includes three hospitals and 24 clinics in the Northland.
Last year, the system performed 12,350 surgeries, and treated about 1.1 million outpatients. SMDC had a total revenue of $437 million.
For its part, Miller-Dwan brings some special ingredients to the mix. Unlike other hospitals, it provides only specific services.
The six specialities are Burn/ICU, Chemical Dependency, Mental Health, Radiation Oncology, Rehabilitation and Surgical Services. These are services for which the hospital has traditionally been the sole local provider.
In addition, Miller-Dwan does not duplicate other locally available hospital services.
The medical center does not have an emergency room, obstetrics or pediatrics. It also does not have its own medical staff and gets patients on referrals. People come to Miller-Dwan to get specific treatment, explained Palmer in a past interview.
He had also described Miller-Dwan as a team-oriented, almost family-oriented hospital.
"People like the care they get here," Palmer said. "We want to sustain that."

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