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CEOs say health merger means lower cost, better care

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HealthPartners President and CEO Mary Brainerd will be the CEO of the new nonprofit formed by the merger of HealthPartners and Park Nicollet Health Services.
MPR Photo/Lorna Benson

The CEOs for two Twin Cities major health care systems say their proposed merger will mean better quality health care for patients at a more affordable cost.

Bloomington-based HealthPartners and St. Louis Park-based Park Nicollet will combine operations Jan. 1 if regulators approve. Merging the two non-profits would create a massive health organization with annual revenues of about $5 billion.

The pursuit of high-quality care for patients while reining in costs is a common goal among health care organizations these days. That's partly due to changes enacted under the federal Affordable Care Act, but also has to do with economic realities than politics. Health care costs have been skyrocketing and most experts agree that those costs can't be sustained long-term. So, medical centers have collaborated to share expertise and resources. The latest combines HealthPartners, which is also an insurer, and Park Nicollet Health Services.

  "The two organizations are very focused on great care, great experiences and affordable cost. And this will give us more capability for that," said Dr. David Abelson, Park Nicollet CEO.

"It was a sense that we share the same mission and vision and we could do better together; we could do more for the community," he said.

The combined operations will include Park Nicollet Methodist Hospital in St. Louis Park, four HealthPartners hospitals: Regions Hospital in St. Paul, Lakeview Hospital in Stillwater, Hudson Hospital in Hudson, Wis., and Westfields Hospital in New Richmond, Wis. Officials say patients shouldn't notice any interruption and can expect to use their clinics and health plans as before.

HealthPartners' CEO Mary Brainerd says the two organizations are already using their individual experience to share best practices.

"We were doing some things at Regions that Park Nicollet was learning and vice versa, and so we're accelerating that progress together," Brainerd said. "That's a quick example of something that's already been going on and intend to build on."

The joint effort includes doing more to coordinate follow-up care to prevent costly hospital readmissions; using electronic medical records to track patient tests to avoid duplication; and reducing the number of infections that patients acquire in hospitals.

Merging the two non-profits would create an organization of more than 20,000 employees. But mergers often lead to layoffs. Brainerd said the growth of both organizations is expected to continue.

"We have no plans for workforce reductions or layoffs.  And in fact, we're looking forward to taking advantage of all of the talents of the people in the combined organization," Brainerd said.

There could be potential turbulence down the road. Nurses are unionized at Park Nicollet, but not at some HealthPartners hospitals such as Regions in St. Paul. Brainerd doesn't foresee potential problems, because the hospitals are separate employers. She said the hospitals that have union representation will continue to have it; those that aren't unionized will remain that way.

University of Minnesota health care management professor Dan Zismer said the merger is not surprising. Park Nicollet and HealthPartners share similar cultures. He said the merger has advantages for both organizations — HealthPartners can take advantage of Park Nicollet's strong presence in the Twin Cities' western suburbs. And Zismer said HealthPartners' role as an insurer is attractive to Park Nicollet at a time when the health care law is aligning the financial interests of care providers and insurers.

"I know they've been carefully considering over the last few years how they were to be in that business. So you put them together and it makes sense all the way around," Zismer said.

Regulators must still have to review the merger for potential anti-trust laws.