Two healthcare providers go separate ways after two-year discussion

Organization leaders said they “will continue to seek opportunities for collaboration as two mission-driven, integrated health systems dedicated to sustainable rural health care.”

“Our organizations have great respect for one another, and we each remain committed to strengthening the health of our communities as we deliver high-quality, compassionate patient care,” officials said in the joint statement.

Essentia Health has 14 hospitals, 78 clinics, six long-term care facilities, six assisted and independent living facilities, seven ambulance services and one research institute.

Marshfield Clinic Health System serves Wisconsin and Michigan’s Upper Peninsula with more than 1,600 providers comprising 170 specialties, health plan, and research and education programs. Primary operations include more than 60 Marshfield Clinic locations, 11 hospitals, Marshfield Children’s Hospital, Marshfield Clinic Research Institute, Security Health Plan and Marshfield Clinic Health System Foundation.

“As we’ve explored this opportunity, I appreciate the relationships we’ve built with the skilled Marshfield Clinic providers, staff and leaders who share our dedication to excellent care,” Essentia Health CEO Dr. David Herman said. “Moving ahead, Essentia continues to focus on building innovative partnerships and transforming care for our communities. As a strong, growing organization, we are guided by our mission to make a healthy difference for those we are privileged to serve.”

Essentia Health and the Marshfield Clinic Health System are high-performing, well-respected, community-focused organizations, and those similarities served as the basis for efforts toward a combination, according to MCHS Interim CEO Dr. Brian Hoerneman.

“As we now move our separate ways, Marshfield Clinic looks forward to advancing our 100-year legacy of providing compassionate and accessible care to the communities we serve. Our commitment to continually enhance the level of care we provide remains firmly in place as we look to the future,” Hoerneman said.

Last March, Marshfield Clinic Health Systems announced a mass layoff affecting 3 percent of their employees, or about 346 of their 12,000 employees.

Some of the “job displacements” in 11 different municipalities statewide, impacted the MCHS facility in Ladysmith where it was about to open a new medical center. In Rusk County, MCHS identified 37 displacements in January 2023, calling them “transitioning workers,” and another eight displacements in March 2023, calling them “permanent.”

The decision comes against the backdrop of a health care industry challenged by skyrocketing labor costs, higher supply expenses and reduction in reimbursements, according to former MCHS CEO Susan Turney.

The total number of employees affected represent less than 3 percent of the Health System’s employee base, according to Turney. The Health System also eliminated more than 500 positions that have been unfilled and no longer recruited, which has allowed it to lessen the impact on employees, she added.

In October 2022, Essentia Health and Marshfield Clinic Health System announced they signed a Memorandum of Understanding to evaluate how the two organizations might combine to form an integrated regional health system.

Last August, Essentia Health and Marshfield Clinic Health System announced the two health systems had entered into an agreement to form a new integrated regional health system serving rural and mid-urban communities across four states. At that time, the agreement was the latest step in the process that keeps the organizations on track to come together formally by the end of this year pending regulatory approval.

In 2019, Marshfield Clinic Health System and Gundersen Health System announced they were in discussions to potentially merge the organizations into one, fully-integrated health system to collectively enhance the level of care across Wisconsin, northeast Iowa and southeastern Minnesota. The two organizations ended talks after almost a year working on details of a possible merger that could create a health system led by more than 2,000 clinicians and with more than 18,000 total employees.