Beaver Dam to join Marshfield Clinic

Agreement continues rural health care efforts

Aligning itself with a health system that focuses on providing care in rural areas, Beaver Dam Community Hospitals has agreed to become part of Marshfield Clinic Health System.

The agreement continues Marshfield Clinic’s push to add hospitals to its network of clinics, ambulatory surgical centers and other services throughout north-central and northern Wisconsin.

Less than a year ago, Marshfield Clinic owned one community hospital — Lakeview Medical Center in Rice Lake. It also shared ownership with Ascension Wisconsin of a small rural hospital — Flambeau Hospital in Park Falls.

It now is on track to have six hospitals, including the former St. Joseph’s Hospital in Marshfield, by the end of this year. And it plans to build a small hospital with 12 beds in Minocqua.

Beaver Dam Community Hospitals approached Marshfield Clinic about becoming part of its system, said Kim

Miller, president and chief executive officer of the small health system.

“They are working to provide care to people where they need it — which is close to home,” Miller said. “And that’s exactly what we have done.”

Beaver Dam, with a population of 16,500, is a community in Dodge County about 70 miles northwest of Milwaukee.

Beaver Dam Community Hospitals — the name comes from the merging of two hospitals in 1972 — employs 850 people and had revenue of $101.2 million in its fiscal year ended June 30, 2017.

Its operations include a relatively new hospital, opened in 2006, with 40 staffed beds and five clinics that provide primary and specialty care.

It also provides home and hospice care. And it has a pain management clinic through a joint venture with Advanced Pain Management, a large physician practice based in Milwaukee with clinics throughout eastern and southern Wisconsin.

Beaver Dam Community Hospitals also includes a nursing home, two assisted living centers and two apartment complexes, one for seniors and one used largely for staff who move to the area and medical students who do rotations at the hospital and clinics. It also has a child care center.

The small health system — like many of its counterparts in rural areas throughout the country — now operates in the red.

It reported an operating loss of $3.8 million for its fiscal year ended June 30, according to its audited financial statement. And for the first nine months of its current fiscal year, it has reported an unaudited loss of $2.8 million.

Becoming part of a large health system will provide more financial stability and potentially lower operating costs.

Under Miller, who became chief executive 11 years ago, Beaver Dam Community Hospitals opened the regional clinics and now employs 12 physicians and nine nurse practitioners and physician assistants.

Becoming part of Marshfield Clinic could bring more specialty care to the area.

“That is something we see Marshfield as being exceptional in,” Miller said.

Other health systems, such as UW Health and Aspirus, probably would have welcomed a chance to add Beaver Dam Community Hospitals to their systems.

“This was a very deliberate strategic planning process with our board,” Miller said.

The health system is expected to become part of Marshfield Clinic by the end of this year.

Susan Turney, a physician and chief executive officer of Marshfield Clinic Health System, said Beaver Dam Community Hospitals is a good fit, given its focus on providing care in rural areas.

“We can certainly provide rural hospitals with added stability and expertise in areas,” said Turney, who grew up in Mellen, a community in Ashland County that now has a population of about 700 people.

Marshfield Clinic, for example, can provide expertise in data management, electronic health records and analytics.

It also knows the challenges of providing care in rural areas, where patients tend to be older, sicker and poorer.

“Our challenges in part are related to our demographics,” Turney said.

Marshfield Clinic, founded in 1916 by six physicians, employs about 10,000 people, including more than 1,300 physicians, nurse practitioners, physician assistants and other clinicians.

It had net income of $59.9 million on revenue of $2.2 billion in its fiscal year ending Sept. 30. That includes net income of $31.8 million on revenue of $1.2 billion from Security Health Plan.

Competitive industry

Marshfield Clinic’s largest competitors are Ascension Wisconsin, based in Milwaukee and the second-largest health system in the state, and Aspirus, based in Wausau. It also competes with Mayo Health System and Hospital Sisters Health System in Eau Claire.

Marshfield Clinic’s move to own and operate hospitals stems partly from its wanting more control over the quality and cost of care where its physicians practice.

Last June, Marshfield Clinic bought St. Joseph’s Hospital, now the Marshfield Medical Center, from Ascension Wisconsin for $324.4 million.

Physicians at Marshfield Clinic staffed the hospital, and the sale was forced by Marshfield Clinic’s threat to build its own hospital in the city of less than 20,000 people.

It also has built a $175 million hospital in Eau Claire — a city that already has two hospitals — that is set to open next month.

Two small rural hospitals — Memorial Medical Center in Neillsville and Rusk County Memorial Hospital in Ladysmith — also have agreed to become part of the Marshfield Clinic Health System. The two hospitals combined had on average fewer than six patients a day in 2016, according to information filed with the Wisconsin Hospital Association.

Memorial Medical Center had net income of $409,286 on revenue of $26.3 million in 2016. Rusk County Memorial Hospital had a net loss of $150,590 on revenue of $23.3 million that year.

Other opportunities for adding hospitals to Marshfield Clinic’s system may come up, Turney said. But she added, “We have a lot on our plate now and we want to make sure that we execute well.”