It was a request from a member of the public that started the Winneshiek Medical Center Hospital Board's Wednesday evening meeting.

Decorah resident Joanne Hagen asked the Board to work to get the Gundersen Lutheran insurance health plan accepted at the county-owned hospital in Decorah.

"I would urge the Board to see the bottom line as the members of the community, not the financial stake," she said.

The Winneshiek Medical Center does not accept the Gundersen Lutheran health insurance plan. WMC administration has said accepting the plan would be detrimental to the hospital. The topic has been a discussion point in the community for years. WMC has contracts with approximately 50 health insurance companies.

Two chiefs from Mayo Clinic Health System - Franciscan Healthcare discussed the insurance plan options with the WMC Board, as was scheduled on the agenda. Mayo Clinic and Franciscan Skemp merged in 1995, with the current name adopted in May 2011, according to its website.

Because of WMC's collaboration with Mayo Clinic Health System through the management services agreement, Winneshiek Medical Center has partnered with Franciscan Healthcare for administrative services, which

includes discussions surrounding the Gundersen Lutheran insurance product.

"We're just here to give you an update and answer any questions," said Dr. Tim Johnson, chief executive officer at Mayo Clinic Health System - Franciscan Healthcare, based in La Crosse, Wis. "We're not going to make any sort of recommendation."

Mayo Clinic Health System - Franciscan Healthcare has proposed contracts to Gundersen Lutheran about accepting the health plan, the men said. Gundersen Lutheran representatives are mulling it over, and will be in touch with Franciscan Healthcare in the near future, they said.


Franciscan Healthcare offers its own line of insurance - called Traditions - just as Gundersen Lutheran offers its health plan. Both plans have existed for about 25 years, said Ron Paczkowski, chief administrative officer of Mayo Clinic Health System - Franciscan Healthcare. Mayo Clinic Health System itself does not offer a health plan.

Provider groups have reasons for starting insurance programs, he said.

"The bottom line is to attract patients and control market share, bringing patients to your practice, and have control over the terms in which those patients contract with you for those services," Paczkowski said.

WMC Board member Sherry Gribble asked if it is a good idea to have health plans competing in one facility.

"If you can achieve a level playing field in terms of the contract offered to an individual employer for their employees, and in the terms of the contract that you can negotiate with the insurance company as a provider network and move to a level playing field, then competition is good," Paczkowski said. However, competition exists in the health insurance market, and Fransiscan Healthcare will not give as favorable terms to plans that turn enrollment away from their facility, he said.

"What you need to know is - and I can't speak for Gundersen - when we contract with other insurance companies, we don't disadvantage our plan," he said.

Pros and risks

Johnson highlighted three areas the WMC Board should consider when deciding if the facility will accept the Gundersen Lutheran Health Plan.

1. Rates: "It's possible that you can negotiate a better reimbursement rate with Gundersen Lutheran," Johnson said. Wellmark holds the majority of commercial insurance in Iowa, and doesn't reimburse at very high rates, he said.

"The downside, or the risk, is there could be a shift of patients away from the hospital, away from the Decorah Clinic physicians (Mayo Clinic Health System), away from hospital outpatient services, away from using hospital inpatient services. That's a real risk."

Those services keep WMC financially viable, he said.

Though WMC and Mayo Clinic Health System are partners, Mayo and Gundersen are competitors, Johnson said.

"In general, Gundersen doesn't support Mayo services, and we (Mayo) don't support Gundersen," he said.

By signing a contract with Gundersen, WMC is allowing it to compete, Johnson said.

"There are ways of negotiating contracts that we can allow people who want Gundersen Lutheran health plan to have access to this hospital, but not put us (Mayo) at a competitive disadvantage," he said.

2. Community: "The other reason you might consider accepting the health plan is because of community concern," he said. "We know that's a source of angst and turmoil in the community," Johnson said.

To reduce the financial risk to the hospital, the health plan contract would have to be carefully negotiated, he said.

"It boils down to what's negotiated, what's put into the contract and what's accepted," he said.

3. Business: Gundersen claims that WMC will see increased business by accepting the health plan, because they'll use the hospital and its services more, Johnson said.

"I think that's the big unknown out there," he said. "We know that since 2005 Gundersen's use of the WMC facility has either remained flat or decreased significantly due to growth at the Gundersen Clinic."

The contract between WMC and Gundersen would need to reflect that Gundersen will increase its use of the facility, he said.

While some services need to be offered at clinics to keep them financially viable, others (like CT scans, MRIs, outpatient surgery, etc.) don't, Paczkowski said.

"If you (Gundersen) really have an intent to support the community hospital, then we would have to come up with an agreement on a list of services and performance measures that would demonstrate that you're doing it," he said.


Paczkowski said they proposed two sets of conditions to Gundersen Lutheran in discussions about the health plan.

1. Network: "The terms of the contract that we would have to negotiate would simply create a level playing field," Paczkowski said. "The way we do that is there would be no tiering, no penalties financially to an insurer in the form of higher premiums or higher co-pays and deductibles if you select one provider versus another."

"We would suggest that the contract terms have to include WMC, Decorah Clinic physicians group, Franciscan Healthcare in La Crosse and Mayo Clinic specialists providing outreach services here at WMC," Paczkowski said. Those four would become a provider network to places in Iowa where Gundersen Lutheran is selling its health plan, he said. They do not anticipate that Mayo Clinic in Rochester, Minn. would be "in network."

In this arrangement, patients with Gundersen Lutheran insurance would be able to see Decorah Clinic physicians (Mayo) and use the hospital. If services were needed in La Crosse, those patients could choose which hospital they would go to - Gundersen Lutheran or Franciscan Healthcare. Additionally, patients with the Gundersen insurance could be seen by Mayo Clinic Health System specialists.

2. Term dates/renewals: It's not unheard of for insurance companies to offer low rates in the first few years to gain a market advantage, then increase them with their expanded leverage, Paczkowski said. The contract would have to cover that potential issue.

Discussions continue

The WMC Board will continue to discuss the issue.

"We don't want to make a decision detrimental to the hospital and we don't want to make a decision detrimental to the community," said Board member Dr. David Gehling.

"The ball is in Gundersen Lutheran's court," said Board President Ben Wyatt.