Fosston, Minn., city council members unanimously voted on Nov. 26 to terminate an agreement that allowed Duluth, Minn.-based Essentia Health to control Fosston Hospital, something the health system does not believe the city has the right to do.
The 2009 agreement between First Care Medical Services, a city-owned 501(c)(3) organization that operated the Fosston hospital, and Essentia Health allowed the system to control the hospital with First Care Medical Services retaining ownership of the property and holding the hospital's license.
Fosston officials said in a Nov. 26 news release shared with Becker's that the decision "reflects the city's commitment to addressing concerns over the current state of healthcare services in Fosston."
"Under the terms of the 2009 agreement, the city and its legal counsel believe that termination is
a logical and valid legal action at this time," the release said. "After a fifteen-year relationship, and given the continued decline in local healthcare services, Fosston’s city council has determined that the time to terminate this agreement has arrived."
The city council's vote comes after an arbitration panel ruled in Essentia's favor in September in a dispute with the city. The city sought to terminate the agreement and regain control of the hospital after Essentia Health-Fosston paused labor and delivery services in June 2022. Fosston Mayor Jim Offerdahl told Becker's in January that the city had reason to believe that it was never a pause: "It really was a shutdown, but they called it that and led everyone to believe it was that for nearly a year."
An Essentia spokesperson said in a statement shared with Becker's that the system was unaware the special city council meeting was scheduled to take place and is now reviewing its options. The spokesperson said the system does not believe the city has the right to determine the affiliation agreement, pointing to the panel's ruling.
"This is another distraction from the important work of advancing health care in Fosston," the spokesperson said. "As it has throughout this process, that will remain our focus — to provide the best care we can for patients across this region."