Janesville30.5°

Edgerton Hospital, SSM Health Care announce financial affiliation

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NEIL W. JOHNSON
April 15, 2010
— Along with shovel work on a new hospital, Edgerton Hospital and Health Services is breaking ground on a new partnership.

Officials announced Wednesday the hospital has formalized a major financial affiliation with SSM Health Care of Wisconsin, the same organization building a new hospital in Janesville.


The move gives SSM Health Care a 49 percent minority ownership of Edgerton Hospital, officials said Wednesday.


“SSM has a lot they’re willing to share, be it staff or resources. The result will be an increased quality of care we can provide patients,” Edgerton Hospital spokeswoman Tracey Pederson told the Gazette.


SSM Health Services, a parent of Madison St. Mary’s Hospital and the future St. Mary’s Janesville Hospital, has been negotiating an expanded partnership with Edgerton Hospital since December 2009, when the two groups formed a limited affiliation for equipment and services.


Until now, the group has had no financial stake in Edgerton Hospital.


SSM Health Care regional CEO Mary Starmann-Harrison declined to disclose the group’s holdings in Edgerton Hospital, but she said SSM is not financing construction of Edgerton’s new hospital, which started this week.


Pederson said plans for the new hospital are being downsized. The facility will have 18 beds instead of the 26 planned earlier. The existing hospital has 25 certified beds, according to UCompareHealthCare.com.


Although smaller than originally planned, the new hospital will remain a critical access facility, and hiring for the new hospital won’t be affected, Pederson said.


Financial backing for the $26 million hospital came through a Federal Housing Administration loan the hospital formalized late last week.


Pederson said the hospital securing that loan could have helped push the new partnership forward.


“I think that had a part in their decision,” Pederson said. “To remain financially viable, we needed a new building, and without (FHA/HUD) financing, that probably would not have been possible. It gave us financial stability to make a viable project.”


Starmann-Harrison said solidified plans for a new hospital helped prove that the two groups’ strategies were compatible.


“It’s very important that we have the latest technology and a high-quality building to work out of,” she said.


The new partnership and HUD financing will bring electronic patient records to Edgerton Hospital.


“That’s something new for the hospital. It’s a big safety perk for patients coming here,” Pederson said.


Pederson said patients at Edgerton Hospital won’t notice a difference in care through the new partnership.


“Our board’s focus really is to keep it a community-based hospital,” she said.


Through the partnership, Edgerton Hospital has no contractual obligation to refer its patients to other SSM Health Care facilities, Starmann-Harrison said.


“We realize patients want to stay home as much as they can. It’s our position that primary care and more simple emergencies should be delivered in local communities, to the extent possible,” she said.


The new partnership will have no immediate affect on staff or administration at Edgerton Hospital, officials said, but it will allow SSM to appoint two representatives to join Edgerton Hospital’s 11-member board of directors.


Starmann-Harrison said the group has no immediate plans to negotiate a majority ownership of Edgerton Hospital.


“We don’t have to be in 100 percent control to be a good partner,” she said. “It’s important to retain community hospitals. We think this is a good strategy for local hospitals, patients and families.”



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