Two down, one to go: About five months after launching discussions, boards representing Omaha-based Nebraska Methodist Health System and Fremont Health in Fremont have approved a proposed “affiliation agreement” between the two health systems.
The proposed agreement next goes to the Dodge County Board, which would have to give final approval. The board, which was briefed on the proposal on Tuesday, is expected to vote July 18. Fremont Health is considered a political subdivision of Dodge County, although it is not financially supported by it.
The proposed agreement would create a new organization called Methodist Fremont Health, which would be a Methodist subsidiary. The new organization would lease the Fremont Health Medical Center, a nursing home and other properties from Fremont Health for 50 years. The new subsidiary would pay rent of $3.3 million a year for 20 years and have the option of purchasing the properties after that time for $1.
If the County Board approves the agreement, the new organizational structure would be implemented this fall.
“There is a lot of work left ahead of us,” Patrick Booth, Fremont Health’s president and CEO, said in a statement. “But I am confident that we have found the right partner in Methodist and I’m pleased with the great progress we have made in this process thus far.”
The Fremont Health Board of Trustees, who are appointed by the Dodge County Board, voted in early February to enter discussions with Methodist regarding a “strategic partnership,” selecting the health system from among three candidates.
Fremont Health previously had established several objectives for a possible partnership with a larger health system, including a continued focus on improving community health and retaining significant local input into the system’s governance.
Under the proposal, seven Fremont-area residents would sit on the new subsidiary’s board, made up of nine to 12 members, and two of the seven members would have seats on Nebraska Methodist’s board.
All employees will be offered employment at comparable wages and benefits, according to the proposed agreement, and medical staff privileges will be preserved.
The briefing package presented to the County Board notes that Fremont Health has faced industry and market challenges over the past decade-plus. Declining hospital admission rates locally and nationwide, intensified competition from hospitals in Omaha and the rest of the region and reductions in Medicare reimbursements combined to push the Fremont system into the red in fiscal year 2016 and led it to re-evaluate its position.
Steve Goeser, Methodist’s president and CEO, said talks in the months since Methodist was selected as a potential partner have “solidified” the belief among Methodist leaders that Fremont Health was a great fit, having many similarities to Methodist’s mission and culture.