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Controversy Arises Over Potential Essentia Health Acquisition in Rural Minnesota

Civic leaders of Sandstone, Minn., believe a potential buyout of the community's only hospital by Duluth, Minn.-based Essentia Health is a hostile takeover, according to a Star Tribune report.

Essentia Health has operated the Sandstone hospital for the past 15 years. However, a citizen's board owns the hospital land and building. Last fall, that board tried to "evict" Essentia Health in frustration over the system's reluctance to expand or rebuild the facility.

According to the report, Essentia then fired the hospital's two local administrators, who were, coincidentally, advocates for upgrading the hospital facility. The system then notified the Sandstone community that when its contract expires in August 2012 it plans to exercise a clause in its lease to buy the hospital for the cost of its debt — $170,000.

Civic leaders believe this move by Essentia is a hostile takeover. According to the report, they worry about their power to preserve the hospital's future.

According to the report, the drama in Sandstone is an example of the problems that arise when healthcare organizations absorb "critical-access" hospitals in rural communities.

More Articles on Rural Hospitals:

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Nearly Half of Arizona Critical Access Hospitals Running at Negative Margins
South Dakota Doles Out $200k to 15 Rural Hospitals

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