Rolla-based Phelps Health plans take over a smaller 25-bed hospital in Dent County.
Phelps and the Salem Memorial District Hospital south of Rolla have signed a letter of intent that would allow Phelps to lease the Salem hospital for 10 years and take over its day-to-day management.
“If we can help turn it around, towards a break-even proposition and keep services as close to that region as possible, that's what we're hoping to gain,” Phelps President and CEO Jason Shenefield said.
Financially strapped rural hospitals have had difficulty staying afloat in the past decade. According to the Sheps Center at the University of North Carolina, more than 150 rural hospitals across the U.S. have closed since 2010.
The Salem facility is a critical access hospital that offers vital services to underserved rural communities. Such hospitals usually need to offer 24-hour emergency care and serve areas without other nearby hospitals.
The hospital serves more than 20,000 residents in Dent and surrounding counties. In addition to inpatient beds and emergency care, it offers outpatient surgeries, physical therapy, pharmacy and other services.
“South of Salem, I think it is almost two hours before you get to the next hospital or emergency room,” Shenefield said. “It's really, you know, ensuring that we keep those critical emergency services, those critical access hospital beds.”
Salem Memorial District Hospital officials could not be reached for comment.
Shenefield said he thinks the larger hospital can help keep the Salem hospital’s emergency care and other critical services operating.
“I do think that we offer some economies of scale,” he said, and help “with some of the financial challenges that smaller organizations can't always get on their own, or even just depth of administrative support.”
Shenefield said he doesn’t expect any Salem hospital workers to lose their jobs if the deal goes through. He said the organization may need to hire more employees.
Affiliations with larger health systems can provide some financial stability for smaller hospitals that lack resources and negotiating power, said Brock Slabach, chief operations officer at the National Rural Health Association.
“It’s not too far from Rolla over to Salem, so I think that even though it's an affiliation, it's still relatively local, which is maybe a win-win,” he said.
The southeast and south-central regions of Missouri have high rates of chronic disease and uninsured people and need hospital services. Slabach said.
“It’s a little more challenging environment in which to make services available,” he said. “But it sounds like they may be working on a solution that will help them to continue to buck the trends that unfortunately happen all too often in places like this.”
Phelps Health officials said they are negotiating contracts and doing due diligence investigations before they finalize the deal. That could happen as soon as a few months, Shenefield said.
