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Business North - The Daily Briefing - Business Newspaper Online
Grand Itasca is major economic engine in Grand Rapids
PHOTO: MIKE YOUSO
Grand Itasca Clinic and Hospital will face a number of challenges in the coming years, CEO Mike Youso told an audience of Grand Rapids Area Chamber of Commerce members on Monday.
Reimbursements based on patient outcomes, the impact of implementing the Affordable Care Act, a patient mix that includes a higher-than-average (65 percent) dependence on government reimbursements (IMCare and Medicare) and rising costs due to unhealthy lifestyle choices by patients are among the challenges that all healthcare organizations face.
Grand Itasca executives also are concerned about the arrival of Essentia in the Grand Rapids healthcare market, Youso said.
Last month, Essentia withdrew a rezoning request to the city of Grand Rapids following a public hearing where opponents showed up in force. Essentia had sought to build a new clinic on a parcel having incompatible zoning. While Essentia subsequently withdrew its request, the Duluth-based healthcare system still plans to build a new Grand Rapids clinic at a different location. Executives hope to begin construction next year, although a site has yet to be selected.
Countering comments that competition in healthcare is good, Youso said it’s a unique industry having finite demand.
“We are not a free enterprise,” he said, adding that the clinic and hospital can’t turn people away because of inability to pay. The net result is $8 million annually in uncompensated care.
Combined with the unusually high mix of government-pay patients, the uncompensated or partially compensated care results in a need to make up revenues through volume. If Essentia plays a larger role in Grand Rapids, it could impact the ability of Grand Itasca to cover its expenses, the CEO said.
While challenges are on the horizon, the clinic and hospital has experienced growth in recent years. It’s now the largest employer in the city of Grand Rapids with more than 600 on the payroll. That growth has also led to a larger role in the local economy.
Youso highlighted the numbers:
• Grand Itasca has annual revenues of about $78 million.
• The clinic and hospital employs approximately 625 persons, 66 of whom are providers.
• There are 95,000 clinic visits, 14,555 emergency care visits, 2,350 surgeries and 310 deliveries each year.
• With a $48 million annual payroll, the state of Minnesota estimates the clinic and hospital has an $80 million annual impact on the local economy.
Youso is optimistic about the community-owned nonprofit’s place in the local community.
Grand Itasca has been more successful than most rural healthcare organizations in recruiting physicians, which has resulted in the ability to add a number of healthcare specialties, he said.
“We have been very successful recruiting doctors here, and that’s not normal for rural Minnesota,” Youso said, adding that local amenities make Grand Rapids a more attractive sell.
Today, the clinic and hospital has 50 licensed beds and has added services such as the immediate care Rapid Clinic to address the general shift from inpatient to outpatient care. Grand Itasca also plans to open a retail pharmacy and, last year, began an initiative to improve patient health.
Through grant dollars, Grand Rapids was one of 13 communities in Minnesota and Wisconsin selected to participate in the Healthy Communities Partnership. Last year, with $500,000 in grant funding, the clinic and hospital focused efforts internally. This year, the program will reach out to the larger community and aim to encourage healthy lifestyle choices.
With 70 percent of the nation’s healthcare demand stemming from lifestyle choices, such as smoking and obesity, Youso said that increasing accountability will be the way of the future.
“During the next decade, we’re going to see patients having a greater financial responsibility,” he said, paying higher insurance rates if they have unhealthy habits or traits.
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