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GF CITY COUNCIL: Are two better than one?

A new private hospital could be coming to Aurora Medical Park in Grand Forks, though its fate appears tied to a five-year tax abatement from the City Council.

A new private hospital could be coming to Aurora Medical Park in Grand Forks, though its fate appears tied to a five-year tax abatement from the City Council.

In a contentious debate Monday night, council members were divided between those who feared an adverse impact on Altru Health System's nonprofit hospital and those who see a new hospital as an economic development opportunity.

City Council members Hal Gershman, Eliot Glassheim and Curt Kreun probed Aurora Medical Park representatives, asking questions focused on community health care issues such as caring for the uninsured and providing trauma centers, which are necessary but tend to be money losers.

Council members Bob Brooks, Doug Christensen and Art Bakken focused on the issue as purely a question of whether the new hospital deserves a tax break. The focus there was on jobs and broadening the property tax base.

"At the end of five years, they pay $600,000 or more in taxes," Christensen said. "That's a lot of taxes."


Council member Mike McNamara appeared neutral on the issue.

The split on the council reflected the respective positions of Altru Health System, which played up its nonprofit status, and Aurora Medical Park, which played up new jobs and tax revenues.

Little discussed was whether the new hospital would improve healthcare for regional residents.

More jobs, revenue

The way Aurora Medical Park representatives talked about their proposed hospital, it would not be a true rival to Altru hospital, because Aurora doctors would refer some patients to Altru for certain kinds of care.

"We're going to be a small full-service hospital," said Dr. Tom Peterson. "We're not going to have a heart surgeon. We ourselves would be a customer of Altru."

The new hospital, to be located just south of the existing medical park off South Washington Street, would cost $60 million to build and would employ just 130 in its first year of operation in 2009. At full-strength, it would employ 500.

Contrast that with Altru, whose regional system employs nearly 2,800 and whose buildings and equipment were valued at $241.7 million as of the end of September.


A key difference is most of Altru's assets are not taxable.

Kevin Christianson, a partner in the Aurora Medical Park venture, zeroed in on that point. What would happen, he asked, if the new hospital partnered with a nonprofit. There'd be no tax dollars, he said. "You should be very excited and embrace our project."

Community service

But money isn't the only consideration when it comes to healthcare.

Altru officials long have expressed fear of cherry-picking by for-profit healthcare groups. That's because, they say, they use profits from relatively profitable operations, such as cancer treatment, to offset losses from unprofitable operations, such as trauma care.

Many people who end up in trauma care don't have health insurance, said Altru president Dr. Casey Ryan. Whatever happens with the new hospital, he said, Altru will survive but some of its programs might not.

"Does Grand Forks need a second hospital? We don't think it does," Ryan said.

Aurora Medical Park representatives addressed that concern by arguing that they aim to serve those patients who aren't going to Altru anyway.


Dr. Peterson said the Stadter Center, a private psychiatric hospital at the medical park, has been expanding the last few years, but so is Altru's psychiatric program.

After the meeting, some Aurora Medical Park representatives expressed regret that they had not tried harder to refute Altru's altruism angle.

The implication that for-profit hospitals do not take care of the uninsured is not true, said Dr. William Noyes, a former Altru cancer specialist who left to form the Cancer Center of North Dakota at the medical park.

The way they're able to do that without the protection of tax exemptions, he said, is they're more efficient.

Tran reports on City Hall. Reach him at (701) 780-1248 or ttran@gfherald.com or see his blog at www.areavoices.com/gfhcitybeat .

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