Hospital, clinic merger will combine strengths

Signing on the dotted line is all that's left to finalize the acquisition of Medical Associates by Floyd Valley Hospital (FVH).

"It's the merger of our organizations," said Mike Donlin, FVH administrator. "We will take the best of both and mix them all up and have better health care services to offer."

FVH will purchase Medical Associates' assets at an appraised value of just over $1 million. That contract will be signed Wednesday.

Dr. Tom Duncan, Medical Associates' partner for 25 years, said the merger, while emotional at times will be beneficial to all involved -- especially patients.

"The practice sale and merger of our clinic to that of FVH is that it really is the first step in assuring long-term access to primary care in our community," Duncan said. "I think long range we're going to be building something bigger and better."

Donlin and Duncan pointed out similar benefits in merging the two entities with doctor recruitment being one of their top priorities.

Those graduating from residency programs to pursue family medicine have a different mindset than they did in the 1970s when Medical Associates opened, Donlin said.

"Most prefer to join as an employee rather than investing in a business opportunity," he said. "We expect this (merger) will encourage more family doctors to come here."

A shortage of $150,000 family physicians nationwide is predicted in the next decade, according to Duncan.

He said Medical Associates is one of the last independent practices in the area because of the difficulty in recruiting doctors.

"I think we represent a kind of independent spirit that is being swallowed by the bureaucracy of the government and the complicated need for advanced health systems," Duncan said.

Another benefit of the merger will mean more opportunities to improve patient care, both men said.

Donlin said FVH will also benefit thanks to Medical Associates' automation and advanced operation in its clinic.

"We will gain from the technology and efficiencies they have come to learn over the years as we operate our clinics over here," Donlin said.

He and Duncan also mentioned the opportunity for improved Medicare reimbursement programs.

As separate organizations, FVH and Medical Associates weren't eligible for some reimbursement programs, but together they will be, Donlin said.

Bringing the two entities together means changes at FVH as well.

The hospital will also hire all of the about 70 Medical Associates' employees.

Doctors Duncan, Steven Meis, Paul Parmelee and Sheila Holcomb, who currently own Medical Associates, and half-time doctors Jolene Meis and Daryl Doorenbos will become employees of Avera McKennan Hospital.

FVH has a personnel services agreement with Avera that gives FVH the services of physicians that Avera employs. The six Medical Associates' doctors will become part of that agreement, Donlin said.

"We have executed a four-year commitment from the partners, which is important," he said. "Retention of the physicians we have here was an important goal in our negotiations."

For the four partners, Duncan said, selling Medical Associates was not because of any financial hardship with the clinic, but rather a necessary step to continue to provide the best care possible to the community.

"We're very proud of what Medical Associates accomplished. We're very proud of our staff," Duncan said. "We've done a lot together (with FVH) and now it will just be a little more formalized."