“We are here to request approval to buy a clinic,” announced Granite Falls Health (GFH) CEO Tom Kooiman at the start of his presentation to the Granite Falls City Council. Last week, the GFH Board of Directors announced an agreement with Carris Health to purchase the Carris Health Clinic - Granite Falls (formerly ACMC Health). Kooiman and other hospital representatives were present to receive formal approval from the Granite Falls City Council for the purchase agreement.
The council voiced their support for the move, and approved a resolution of support without any opposition. The final sale is pending approval by the Carris Health Board of Directors, which is scheduled to occur during their meeting on Wednesday, April 19. The Carris and CentraCare leadership are recommending acceptance of the terms.
According to Kooiman, the agreed purchase price for the clinic is $900,000, although he added that the final price “could fluctuate based on inventory that is there on the purchase day.” The bulk of the cost comes from acquiring the currently employed staff, totaling $708,000. GFH is also purchasing the furniture at an assessed cost of $131,000, although they will not purchase the current building since Carris Health rents the facility from another party.
Kooiman explained to the council that “board and medical staff feel that we would be able to better serve our community under one roof.” An official statement issued jointly by Carris and GFH echoed this sentiment, adding that “having two clinics compete results in duplication of health care services and is not the most efficient option for patients in the community.”
The Carris clinic is currently losing money, but Kooiman maintained that the downstream benefits of acquiring the clinic would more than offset these losses. He used the example of the new Granite Health Clinic, which during its first year of operations lost approximately $500,000. The expansion of services and the ‘ripple effect’ on other aspects of the hospital allowed GFH to earn an extra $1.5 million (creating a net profit of roughly $1 million).
The cost of acquiring the clinic will come from the GFH reserve fund, meaning that the hospital is purchasing the operation by borrowing money, rather than directly financing the sale. Granite council approval was required for the purchase because the GFH is municipally owned.
During his conversation with the council, Kooiman expressed how hard it was for small, rural hospitals to remain independent of larger entities. “This is a really complex business and I wish we could simplify it, but we can’t,” he said, adding that “our goal is to serve our community as best we can. This is a huge step for us.”
According to both Carris Health and GFH, the partnership is not intended to eliminate any current staff positions. The press release states that “Carris Health employees will have the opportunity to become employed through Granite Falls.” There are no guarantees, however, that the current staff structure will remain in place. Current Carris employees will have the opportunity to become employed through GFH after their current contracts expire at the end of the year.
The agreement has a proposed transition date of July 1 of this year. The council resolution won’t take effect until the city legal team approves the language of the agreement.