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News from the week of November 19, 2003

Health-care planning reaches crossroads

By Seth Schmidt

Item: Citizens from the Slayton, Westbrook, and Tracy areas meet at Lake Shetek to talk about an "action plan" for health-care needs and opportunities in their communities.

Item: Accountants and planners from two Twin Cities consulting firms and top Sioux Valley Hospital administrators meet with community leaders in Tracy to discuss trends and choices that could shape the delivery of area health-care services.

Item: Board members representing Murray County Memorial Hospital in Slayton, the Westbrook Health Care Center in Westbrook, and Tracy Area Medical Services in Tracy gather at Shetek Lutheran Ministries. The group attempts to reach a consensus about how—and to what extent—collaborative efforts among the three medical communities should continue.

What does it all mean?

The short answer is easy. No one knows for sure.

"We don't know for sure what direction this is going to take us," admits Dan Reiner, chief executive officer for the three hospitals.

Says David Schuh, a financial analyst for the Twin Cities planning firm Larson-Allen, "It's complex. We want to understand the pieces. We just don't know how to put them together yet."

But the choices are coming crystallized.

• Each community could attempt to continue to operate their own clinic and hospital, sharing some resources as they do now. Efforts could be made to raise the necessary financing to improve existing facilities in each town to provide specialty services and growing outpatient needs. Efforts could be made to recruit the needed medical specialists to serve the facilities in each community.

• A centrally-located diagnostic clinic could be built to serve the entire Shetek area, with the goal of attracting specialty medical providers to the clinic. The construction of a central hospital could someday follow the establishment of a combined, specialty clinic. Primary-care clinics would continue to operate in each community.

The community-based vs. centralized-facility issue has many variables. Each choice has trade-offs.

In coming weeks and months, hospital and community leaders are expected to sort out the risks and opportunities of all options and select a path to follow.

Is specialty clinic the Rx for healthy area medical system?

Continued collaborative efforts—perhaps to the point of building a central specialty clinic and hospital with other communities—hold significant promise for improving local health-care services, Tracy community leaders were told last week.

Tracy City Council members, Tracy Area Medical Services board representatives, and local hospital administrators met with representatives from two Twin Cities consulting firms for 3 1/2 hours last Wednesday. Representatives from Sioux Valley Hospitals, Sioux Falls, S.D., and several Tracy hospital staff members also attended the meeting.

The cooperative health-care effort would involve Tracy Area Medical Services, Westbrook Health Care Center, and Murray County Memorial Hospital. One collaborative model envisions the construction of a centrally located diagnostic clinic. Full-time general surgery, oncology, orthopedics, pulmonology, urology, cardiology, and pediatrics programs are envisioned for the clinic. Primary-care medical clinics in Tracy, Westbrook, and Slayton would continue to serve non-specialty health needs.

Besides offering specialty services that are either not now available locally, or available only on an periodic basis, the combined diagnostic clinic would offer these advantages, according to the Larson-Allen report

• Lower operating costs.

• Improved ability to recruit medical specialists.

• Improved capacity to attract needed capital and handle debt service.

• High-quality care, and an improved public perception about the facilities and services offered.

The proposed diagnostic clinic would be between 8,000 to 12,000 square feet in size and cost an estimated $1.3 and $2 million.

"This is one way to look at the world," said David Schuh, an analyst for Larson-Allen. He said that Larson-Allen has run more than 150 financial models in trying to determine what options the three hospitals should pursue.

"The three of you (Tracy, Westbrook, Murray County) have a better chance of pulling it off collectively rather than individually."

Tracy could try to continue to operations on its own by improving its own outreach facility and attempting to recruit medical providers, Schuh said. However, he said, Tracy's ability to handle debt would be much lower, A Tracy "stand alone" strategy would also face the hurdles of limited financial resources to maintain cash flow and recruit the needed medical specialists.

"It is not that you don't have options. The issue is the risk of continuing to be a stand-alone facility compared to combining. (Tracy's) cash position is an issue. Tracy is too poor to grow."

Critical Access designation sparked big financial swing

Leaders worried what happens if benefits are lost

Three years ago, Tracy became one of the first Critical Access Hospitals in Minnesota.

The federal designation significantly boosted the hospital's finances. As a Critical Access Hospital, Tracy has been able to get higher government payments for services delivered to Medicare patients. Medicare patients account for about 80% of hospital business.

Because Critical Access payments are based on costs, not a set fee, Tracy Hospital has been able to help pay for facility improvements and equipment, as well as increased wages to retain and recruit employees.

"The numbers are huge," said David Schuh, an analyst for Larson-Allen, told a gathering of community and hospital leaders last week. "If you didn't have critical access, you might not be here now."

In Tracy Area Medical Services' 1999-2000 fiscal year, combined clinic and hospital losses totaled $580,804. The following year, in TAMS's first year with the Critical Access designation, the losses fell to $140,409. In the 2001-02 fiscal year, the combined loss fell further to $61,496.

In the fiscal year that ended April 30, 2003, TAMS showed a $99,724 profit. This year, through the end of October, TAMS is in the black by just over $1,000.

"When we became a critical access facility, it made a $400,000 to $500,000 difference (annually) in cash," said Dan Reiner, chief executive officer for the three hospitals. "It's been a huge infusion of cash."

But Reiner is worried about what will happen to TAMS finances if critical access reimbursement rules tighten. Both Reiner and Schuh say that they consider it all but certain that the critical access lifeline is gradually going to be reduced because of cost-containment pressures in the health-care industry.

"It makes me nervous to be so dependent on critical access," Reiner said. "We are riding a one-legged horse. If someone shot that out from underneath us, we'd go down."

Schuh said that growth, through providing services that consumers are now obtaining elsewhere, is the most logical strategy for TAMS to pursue, to counter the expected decline in critical access funding.

Three-community task force to study area health options

A task force will be formed to study possible collaborative efforts involving Tracy Medical Services, Murray County Memorial Hospital, and the Westbrook Health Care Center.

The decision to form the study group was made at a Tuesday night "planning retreat" at Shetek Lutheran Ministries involving board members from all three hospitals. The panel is to include two people from each hospital board and one "at large" representative from each community. Besides exploring cooperative health-care ventures among the three hospitals, the task force is also to consider possible links with other area hospital systems. The task force is to make a recommendation to each hospital board.

The Tuesday meeting was attended also by Ed Weiland, president of Sioux Valley Regional Health Services; David Link vice president of the Sioux Valley Health System; and David Schuh and Mel Verly, of the Twin Cities planning firm, Larson-Allen.

Link said that the challenges confronting the three hospitals are similar to those faced by rural health-care facilities across the country. "What is unique is that you have three communities sitting in this room talking about it."

The Sioux Valley vice president indicated that the "regionalization" effort being studied for the Shetek hospitals could also include other area medical systems.

Weiland said that Weiner Memorial in Marshall has sounded out Sioux Valley and two other health systems about possible areas of cooperation, and Sioux Valley had responded. A relationship with Weiner, he said, could be "a win-win" situation

"We don't see Marshall as a threat to this model (proposed Shetek collaboration) at all," Link said. Working with Marshall, he said, could fit in with Sioux Valley's overall philosophy of providing quality health care services as close to home and as efficiently as possible.

Link said that the community leaders should not feel rushed into making decisions about future changes.

"I would give you the luxury of time," he said. Even if everyone in the room agreed on a course of action, it would still take time to build community support for any given course of action, he said.

Weiland stressed that any expansion plan developed by the Shetek hospitals must be financially self-supporting for Sioux Valley to back it.

Pilot, professor to be honored

The late Robert “Bud” Stone and Dr. Dale E. Miller will become the latest inductees into the Tracy Area High School “Wall of Fame” Thursday. Both will be honored at District 417's American Education Week banquet, set to begin at 6:30 p.m. at the Mediterranean Restaurant.

The 2003 inductees took widely disparate paths following high school. Stone, a 1939 grad, left college to become a World War II fighter pilot. He served in the United State Army and Air Force Air Corps for 37 years before retiring with the rank of colonel.

Dr. Miller, who was graduated from Tracy High School in 1954, is a professor at Purdue University. Over the past five decades the educator has been involved in many college and professional theatre productions, both as an actor and director.

Other banquet awards will honor students, teachers, and school staff members.

Robert Stone attended Tracy High School during the Depression years, graduating from high school only three months before World War II broke out in Europe. He was known as an outstanding prep athlete, lettering in football and basketball, the only sports then offered at the school.

He enrolled in Hamline University, but left college to train as a fighter pilot after the Japanese attack on Pearl Harbor, Dec. 7, 1941. Initially, he volunteered for the Royal Canadian Air Force because as a married man, he was ineligible for the U.S. Army Air Corps. Just before he was scheduled to depart for Canada, Uncle Sam dropped the prohibition against married pilots and Stone joined the American military. He completed his Air Corps training in March of 1944 and was assigned to the 318th Fighter Group based on Saipan.

There's no need for Dr. Dale E. Miller to brush up on his Shakespeare. The bard of Stratford-on-Avon is well known to the Tracy native, whose theatre arts career began with school plays at Tracy High School. His acting career includes roles in Shakespeare's Othello and Hamlet, and he has directed The Tempest.

After earning a bachelor's degree from Augustana College in Sioux Falls, Dr. Miller earned a master's degree from North Dakota State University in Fargo. He earned his doctorate from Northwestern University in Evanston, Illinois. In 1994, the Indiana Theatre Association honored Dr. Miller as its outstanding university college educator.

Prior to joining the faculty at Purdue, Dr. Miller taught at Huron College, Stephens College, Barat College, and Northwestern University.

Grand opening set Saturday at Northern Needle, Tracy Technology

By Val Scherbart Quist

Husband and wife business owners Kevin and Wendy (Salmon) Haney are celebrating the grand opening of the Tracy Technology Center and Northern Needle this weekend. Both businesses are located in the former Enderson's building in downtown Tracy.

The grand opening will take place Saturday, Nov. 22 from 9 a.m. to 5 p.m. and Saturday, Nov. 23 from 11 a.m. to 4 p.m.

Northern Needle isn't a new business, but it is new to Tracy. The cross-stitch and hardanger supply store started in 1998 as an e-commerce business. The business was shut down in 2002 when it became too much in addition to the Haneys' full-time jobs.

“It got to be too much because it was going so well,” said Kevin.

That same year, the Haneys began thinking about moving to Tracy. They wanted to find a storefront for the business, and get the e-commerce site back online.

“I've always wanted my own store ... it just kept itching at me,” Wendy said. “It wasn't just about having my own store, it was about having my own store in Tracy.”

“Opening up a store in rural Minnesota had a certain appeal to it,” Kevin said, adding that there aren't any cross-stitch and hardanger stores in the area that carry a full line of products.

It wasn't the first time the couple had made a big move, and they were—and are—determined to make it work.

“Once we made the decision, we said, `Okay, now how can we make this a success.”

• • •

Northern Needle has a variety of specialty threads and fabric, hundreds of charts, OTT lights, and other specialty items for needlework enthusiasts. For people who have walked in off the street, it's often a surprise when they see what's offered, Wendy said. She's enjoying the customer interaction, which she didn't have before.

Northern Needle also carries a selection of frame designs from East Side Moldings, for customers who do their own framing.

Wendy also plans to start classes on beginning cross-stitch, beginning stitching on linen, and possibly a project class in January. Local customers are welcome to place their orders online and pick them up when it's convenient, Wendy said.

• • •

The move also presented the opportunity for Kevin to open his own business. He opened the Tracy Technology Center in July.

“I wanted to provide basic technology needs for rural Minnesota,” Kevin said of his vision for the store.

Tracy Technology Center has several specialties. Kevin offers computer services, such as networking, fixing PCs, and installing computer software and hardware. He also does VCR to DVD transfers. In addition, Tracy Technology Center has two-way radios, telephones, networking equipment, and a full line of weather equipment.

As a trained weather spotter, Kevin makes daily reports and keeps up a website with weather information for Tracy. The site,, includes real-time weather for the city, including wind speed, precipitation, current watches or warnings, lightning strikes, and radar images.