October 28, 2013; Argus Leader
Kennebec is a town of only 200 people, despite serving as the county seat for Lyman County, South Dakota. In 2012, Sioux Falls-based Sanford Health closed the clinic it had operated in the town since 1981, citing low patient volumes and escalating costs. Since the clinic was operated from a trailer, when the clinic closed, all that was left was an empty lot.
In a separate interview with Sanford Health executives, the system had tried unsuccessfully to find alternatives to closing the clinic, which was seeing as few as two patients a week. Sanford even tried to find a midlevel practitioner willing to relocate to keep the clinic open.
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Faced with the prospect of travelling out of town to access medical care, residents held a town meeting to assess options. Attendees pledged $65,000 that night in an effort to attract medical care to the community. Ultimately, more than $100,000 was raised to purchase a small house built by state prison inmates and transport it to the vacant land left by Sanford. (Town officials were quick to praise Sanford for giving them the land after closing the clinic.) Sioux Falls-based Avera Health, Sanford’s main competitor, was convinced by the town’s efforts to locate a clinic in the town-provided building.
It is unknown what would have happened had the town offered financial incentives to keep their previous clinic provider. No incentives or subsidies were offered by the town, according to Sanford, and Sanford executives were unaware whether Sanford clinic representatives ever asked the town about financial support to remain in the community.
Both Sanford and Avera are multi-billion dollar nonprofit health systems operating in several states across the Upper Midwest. Why would Avera open a clinic in a small market Sanford found too expensive to serve? Competition may play a factor, of course. There are bragging rights that go along with having more facilities and being present in more communities. Also, clinics can act as “feeder systems,” bringing patients to hospitals owned by the same systems that own the clinics. Even clinics operating at a loss can provide profitable patients to the major hospital facilities.
Another factor cited in the article may be a difference in how care is delivered. Avera has been very aggressive in deploying telemedicine, or distance-based access to specialists from remote locations that can’t support on-site comprehensive services. Using services like eCare and eICU, patients may be examined remotely by videoconference, supported by midlevel providers at the clinic site.
Kennebec’s success is due to an enterprising community, the presence of health care competition offering similar yet different care models, and the participation of several nonprofit entities to make it happen. As health systems continue to struggle with financial and operational challenges, look for more communities to be challenged to keep local health care close to home.—Michael Wyland