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Otsego Memorial to explore integration with Munson Healthcare

GAYLORD – The Otsego Memorial Hospital (OMH) Board of Directors has decided to explore strengthening its relationship with Munson Healthcare.

OMH CEO Tom Lemon said the Board remains fixed on positioning the hospital for a strong and successful future, ensuring the right mix of close-to-home health care services in Gaylord and surrounding communities for years to come.

‘The OMH and Munson Healthcare Boards have approved a non-binding agreement to proceed with the development of an integration plan that would permit closer affiliation between the organizations for the Boards’ future consideration,’ he said. ‘The OMH Board strongly believes that a strategic partnership with Munson Healthcare system could provide the hospital access to the resources needed to realize its future goals.’

OMH first affiliated with the Munson Healthcare system in 2006. During the past 11 years, the organizations have worked together to strengthen cardiology and oncology services in Gaylord and throughout OMH’ growing service area. Joint planning and shared physician recruitment activities have allowed OMH and Munson Healthcare to partner, reducing costs and enhancing overall outcomes.

While the future of health care legislation remains unknown and many rural community hospitals across America are struggling to survive, OMH is in a strong position with high quality clinical services and sound financial performance, making this an ideal time to explore closer integration with the Munson Healthcare system.

OMH Board President Mary Sanders said this integration will create an efficient structure for coordination and governance, and maximize capital and operating resources not readily available to independent organizations.

‘The delivery of health care continues to change rapidly, and it is becoming critical for hospitals to be tightly integrated into a larger health system to support new accountable care models, requirements for bundled payments, demands for increased coordination of care between providers, and future responsibilities for population health management,’ she said.
Munson Healthcare President and CEO Ed Ness said exploring a closer integration makes sense at this time for both organizations.

‘Otsego Memorial Hospital is a great asset for Gaylord and consists of a fiscally strong and vibrant community hospital and medical group,’ he said. ‘Our goal is to continue to provide the Gaylord-area residents the type of care they need close to home. In these changing and challenging times, there are things we can do together to enhance services for the region.’
Otsego Memorial Hospital

The non-binding agreement allows leaders from Munson Healthcare and OMH to move into a ‘due diligence’ phase. During this phase, leaders will exchange pertinent information related to planning for full integration and identify any opportunities or challenges. This includes information about human resources, facilities, equipment, agreements and financial records. Teams will also negotiate a final agreement and seek all necessary approvals for the integration.

As OMH and Munson Healthcare leaders have discussed the potential of a fully-integrated relationship, the concept of establishing an Eastern Region of Munson Healthcare has emerged. The Eastern Region would be comprised of residents living in the communities served by both OMH and Munson Healthcare Grayling Hospital.

Coordinating health care providers and service planning through a regional approach will enable OMH and Munson Healthcare leaders to better initiate and sustain care models to serve patients in both communities more efficiently and close to home whenever possible. By combining efforts in the Eastern Region, OMH and Munson Healthcare can explore offering services that otherwise could not be delivered based on the size of each hospital’ individual community. Operating as a larger region will also help recruit and retain the best talent and will allow for expanded service offerings.

Lemon said under any agreement the OMH Foundation will continue to fundraise to benefit the hospital and its programs and services.

‘All donations will continue to be used as intended by the donor. That has always been the case and will not change,’ he said. ‘That is our commitment to the community and to our donors.’

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