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How a local effort for a new hospital is improving health care in Renville County

Date Published: 03/15/2017

Author: Chuck Brown

Chuck Brown is a Minnesota writer and the retired manager of a manufacturing company who served 12 years on the Olivia City Council.   He is a Growth & Justice Policy Fellow advising on rural issues.

Health care has dominated American politics and policy debate for years now and will surely continue to do so for years to come. Policy advocates populate a wide spectrum, ranging from those wanting a government operated single-payer system to the other extreme where government would be banned completely, leaving health care to the exclusive work of free markets. As with most policy debates, I find myself landing somewhere near the middle, though it’s not the intention here to argue precisely where along the spectrum the sweet spot is to be found. Rather, it is to present a clear picture of health care today in a single, rural Minnesota county with the hope that it will be a useful contribution to the overall debate. It’s further hoped that it might shed some light on another current Minnesota issue: the urban/rural divide.

Renville County, the county in question, is located in southwestern Minnesota and is dominated by agriculture. It has no city large enough to be considered a regional center. The county has owned and operated a hospital in its county seat, the city of Olivia, for many years. The hospital’s nursing staff, x-ray and lab technicians, housekeeping, kitchen, and maintenance staffs have always been county employees. Physician services at the hospital were supplied by self-employed doctors from privately owned clinics scattered about the county. Specialists from larger hospitals in Willmar, St. Cloud and the Twin Cities provided outreach services, and when needs exceeded local capabilities patients were transported via ambulance or helicopter to one of those hospitals. This model served the county well for many years.

Then some years back the county questioned whether they wanted to be in the hospital business at all, whether county residents might be served as well by spinning the hospital off as a private nonprofit. That didn’t fly. The numbers didn’t work. And to the county’s credit, having recommitted to running a hospital, they commenced plans to build a new one with vastly expanded capabilities. Indeed, in 2015 a new state-of-the-art medical complex opened in Olivia, including a hospital with significant surgical and obstetric upgrades and added diagnostics such as MRI. The complex also houses a shiny new clinic and a therapy center. Then in 2016 a St. Cloud clinic opened a kidney dialysis center in an old clinic building.

The county financed the new hospital with a bond issue. The federal government, through the USDA, bought a significant portion of the bonds, thereby enabling the county to obtain a very favorable rate. The principal and interest on the bonds are now serviced completely by hospital generated revenue. The taxpayers of Renville County are not expected to subsidize the hospital. (The City of Olivia did foot some related infrastructure costs, but the benefits the city reaps from hosting the new hospital far exceed those costs.)

At about the same time as the planning and construction of the new complex was taking place a number of the county’s doctors were nearing retirement age. New docs were needed to provide the hospital’s expanded services, docs who would hopefully buy into the clinics as well. That didn’t fly either. Doctors were willing to come, but they weren’t interested in the old business model involving clinic ownership. They just wanted to practice medicine. The solution: the county bought the clinics. It now owns three: the new one in the hospital and one each in the cities of Renville and Hector. And the doctors? They’re now county employees too.

The health care debate will surely be with us into the foreseeable future and it’s hard to know just where it will lead, but two things are known in Renville County. First, county residents are enjoying significant advances in local health care. And second, if it wasn’t for government involvement there wouldn’t be health care in Renville County.

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