Iron Range hospital finds new life with Essentia in charge

Tuesday, May 12, 2015

Virginia Regional Medical Center was losing money and patients in 2011 at rates that made closure almost a certainty. Voters faced a hard choice: Surrender control of their city-owned hospital or risk watching it fail.

They surrendered, agreeing to let an outside health system run the hospital. City officials in 2012 signed a controversial deal with Duluth-based Essentia Health to take over the operation.

Critics questioned if Essentia would deliver what it promised. Three years later, though, even some skeptics say that while concerns remain, Essentia has made things better.

The health-care system says it's spent $7 million upgrading the facility, per the lease agreement, and has paid down nearly $6 million in hospital debt. The city still owns the hospital, but Essentia can buy it outright once the bonds are satisfied.

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