The Redwood Area Hospital is at a crossroads.

That is what Bryan Lydick, hospital CEO, told the Redwood Falls city council Dec. 5 as part of its meeting.

Lydick was in attendance to talk about a new opportunity that has arisen in recent weeks that led to a request from the council to secure legal services representing both the city and the hospital related to a possible business transaction with CentraCare Health System.

Headquartered in St. Cloud, CentraCare Health Systems is a not-for-profit medical care program currently made up of six hospitals, six long-term care facilities, 21 clinics, an outpatient care center, three outpatient surgery centers and four pharmacies in Minnesota.

According to Lydick for the past eight weeks the hospital has been in conversation with CentraCare Health introducing the expansion and remodeling project, as well as the relationship the hospital has with ACMC in Redwood Falls.

In November, CentraCare announced it would be entering into a new agreement with ACMC and Rice Memorial Hospital that will bring its services to the community, and it was that introduction to the community that led to the dialogue between CentraCare and the Redwood Area Hospital.

What would the business transaction entail? According to Lydick, that is all up in the air.

“This is all exploratory at this time,” said Lydick.

The agreement for legal services with Stinson Leonard Street indicates the discussions could lead to CentraCare leasing, purchasing or in some other way taking over the operation of the hospital and the possibility of developing a “new expanded healthcare campus in Redwood Falls.” 

Lydick said the conversations the past few weeks have also meant pausing the plans for the expansion and remodeling of the hospital, adding a business transaction with CentraCare could lead to the creation of an entirely new physical space on a green field site in the community.

In the proposal from Stinson Leonard Street, it states “the city is interested in exploring the possibility of exiting the healthcare business and bringing in a strategic partner that can continue the hospital’s tradition of providing exceptional healthcare” for the communities it serves.

The legal services proposal includes a four-person team with billing rates from $280-515 per hour based on experience and areas of expertise, with “other specialists” also included at various rates as needed.

The hospital, said Lydick, is in a position of strength at this point, as it explores what is best for the future of healthcare delivery in the community.

More on the outcome of those discussions will follow in upcoming editions.