Having "Mayo Clinic" on the entrance would seem like a badge of honor for a community hospital in rural Minnesota. But a vocal group of leaders in Fairmont, Minn., view it as an albatross, saying Mayo's acquisition of their hospital has pulled its finances into the red, siphoned off patients and doctors, and dragged the hospital to the bottom of key national quality-of-care rankings.

At a town hall forum Oct. 23, an estimated 400 people complained about long waits for care and being diverted to Mayo's hospital in Mankato because the Fairmont hospital was short-staffed. "Fairmont deserves to be more than a Band-Aid or triage station," said Wes Clerc, mayor pro tem, during the forum.

Mayo officials acknowledge some of the concerns but say new hires and other improvements are addressing them. Moreover, they argue, Fairmont's hospital is in a much stronger position under Mayo ownership to meet demanding new quality standards and regulations of federal health reform.

"If I was sitting in some of these other small, rural communities where they have a [hospital] not affiliated with a strong system such as Mayo, I'd be very, very concerned," said Bob Bartingale, the hospital's administrator.

The dispute in Fairmont is in many ways a reflection of the pressures facing hospitals large and small as federal health reform takes hold. Minnesota's three largest rural care providers — Mayo, Essentia and Sanford — are in a land grab of hospitals and clinics in an effort to fortify themselves against competitors. Seeking to expand its referral base of patients — and to maximize the efficient use of centralized lab and record-keeping services — Mayo has aligned with or acquired hospitals and clinics across southern Minnesota. Mayo took over Fairmont's hospital in 2001.

Small hospitals have often been willing partners for such takeovers because of declining insurance reimbursement rates or the need to invest in costly new technology, such as electronic medical records. Partnering up can also give them access to top experts at large hospitals when treating complex cases. Cameras in Mayo Fairmont's critical care unit rooms are so advanced, for example, that specialists in Rochester can zoom in and read the names off their wristbands. The hospital's leaders believe that will allow Fairmont to keep more, not fewer, patients in local care.

But the partnerships are not always happy. Leaders of the community hospital in Madelia, Minn., did not renew a contract with Mayo to manage its adjacent clinic, because of a concern that too much care was being diverted 12 miles up Highway 60 to Mankato. Leaders in St. Peter, Minn., declined to sell their hospital despite threats that it wouldn't survive without Mayo's help.

"It's a flawed business plan," said Colleen Spike, the recently retired administrator of the St. Peter hospital who advised her board not to sell and complained to the attorney general about Mayo's tactics. "It's a failure to see the difference between the delivery of health care in a metropolitan areas vs. delivering health care within a rural area."

Financial troubles

Fairmont's hospital has struggled financially, posting losses of $1.3 million and $292,000 in 2011 and 2012, respectively, according to Minnesota Hospital Association reports. It also rated among the worst in the nation in October when the U.S. Centers for Medicare and Medicaid Services released a critical indicator — the 2015 penalties assigned to hospitals for having high rates of patient readmissions. High readmission rates are considered signs that the hospitals didn't adequately prepare their patients to take care of themselves back home.

The unexpectedly high rate resulted in a Medicare penalty of 1.62 percent off all Medicare inpatient revenues to the Fairmont hospital. Only one other hospital in Minnesota had such a severe penalty.

Mayo officials said the Fairmont hospital rates much better on other measures of care, including low mortality rates for patients with conditions such as heart failure and pneumonia. But they also were penalized by Medicare last year for a low "value" measure, which is partly based on patients' surveys and overall satisfaction with the hospital.

The group behind the recent community forum includes a former mayor and former board members who participated in the hospital's sale. They blame a 2008 decision to turn Fairmont from a regional medical center into a feeder hospital for Mankato and Rochester, which reduced the number of workers, doctors and staffed beds.

"There are services you could get in 2008 and 2010 that you can't get here anymore," said Tom Hawkins, a former hospital board member who runs the local Chevrolet dealership.

Bartingale, the hospital administrator, said staffing did decline, from a peak of 660 employees to about 550, but says much of that reflects the consolidation of lab, call center and record-keeping services to a regional Mayo hub in Mankato.

And in 2014 the hospital expects the lowest number of inpatient admissions, just over 2,000, in the past decade. But that reflects a much broader national trend of diverting procedures to outpatient care — many patients receiving orthopedic surgery go home within 24 hours — and not because more cases are being steered to Mayo's larger hospitals, said Dr. Rob Nesse, chief executive of the Mayo Clinic Health Network.

"Patients aren't being hospitalized disproportionately more in Mankato to the detriment of Fairmont," he said. "It's just less people hospitalized all over."

Shortage of specialists

Critics also say Mayo officials failed to replace specialists in areas such as urology and ear, nose and throat care after doctors retired or left town. Three-month waits for some types of specialty care are typical unless patients are willing to drive to Mankato.

"I just want somebody to bring more service back to Fairmont," said Dan Schmidtke, chairman of the Martin County Board of Commissioners. "Our elderly, they don't want to travel."

Comparing service mix reports for 2008 and 2012, the Fairmont hospital no longer has its own home health and hospice units, and it provides fewer mammograms, CT scans and ultrasounds. And while ER visits increased 34 percent in that four-year period, the number of emergency patients admitted for surgery declined 11 percent.

Fairmont resident Ernie Nuss said Mayo call center staff pressured him to go to Mankato and were unaware of the specialty care that remained available in Fairmont. He was told he'd have to wait three weeks to see a doctor in Fairmont when suffering from pneumonia.

"I'm sick now," he recalled saying. "I don't know if I will be sick three weeks from now."

Mayo acknowledges that it has covered some specialties such as oncology in Fairmont with doctors from Mankato rotating there on a weekly basis. But it is also hiring full-time staffers to try and reduce wait times. Dr. Anna Kitzmann is moving to Fairmont next month to be Mayo's ophthalmologist ­— and said the Mayo affiliation helped bring her there.

"I trained at Mayo," she said, "and I had a really positive experience when I was there."

Diverting patients

Bartingale said concerns in the community heightened this summer when many nurses were on maternity or other leaves and the hospital did have to divert more patients than desired to Mankato. That isn't as much of a problem now, he said, and Fairmont also now has a full-time "hospitalist" physician, and a second on the way, to provide consistent care to patients during their admissions.

The prior use of fill-in physicians in the hospitalist role might have hurt the continuity of care that patients received, said Dr. Jeffrey Green, a family physician at Mayo Fairmont. That likely contributed to the high number of patients readmitted for care, but he predicted that staff hospitalists and better discharge planning would help patients return safely home.

Green said he understands the concerns of the community, including the economic concerns of having fewer full-time Mayo doctors and workers in town buying, homes, cars and other needs.

But from a care perspective, he believes the community will soon see more care staying at the Fairmont hospital.

"I bristle … when I hear that word Band-Aid," he said. "I think, 'Gosh, we do laparoscopic-assisted colon resection here.' "

Jeremy Olson • 612-673-7744