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Release: Dec. 8, 1999

Shared management accord benefits Marengo, Sigourney hospitals

IOWA CITY, Iowa -- University of Iowa Health Care and community hospitals in Sigourney and Marengo have forged a shared management accord that demonstrates how rural communities can work together to reduce costs and preserve access to hospital services.

Under the agreement, Michael D. Trachta, a member of UI Health Care's administrative staff, began serving as chief executive officer for both Marengo Memorial Hospital and Sigourney's Keokuk County Health Center Dec. 1.

Trachta has served as Marengo Memorial Hospital's CEO since last summer. His arrival under an affiliation agreement between the local hospital and UI Health Care, coupled with strong public support, reversed a financial decline that threatened Marengo Memorial Hospital's existence.

Keokuk County Health Center has a similar affiliation agreement with UI Health Care. Faced with the retirement of longtime CEO Doug Sheetz at the end of 1999, the health center's board of directors formed a subcommittee to find a replacement.

The subcommittee recommended a shared CEO arrangement with the Marengo hospital as a way to save money. After much discussion, both boards approved the agreement, with Marengo acting Nov. 15 and Sigourney following suit Nov. 29. The shared CEO arrangement will save each hospital an estimated $20,000 a year.

The shared management arrangement involves no change in ownership or control. Both hospitals remain independent with local ownership and local governance by their existing Boards of Trustees.

"I felt this was the best option for KCHC," said Kevin Luers, chair of the Keokuk County Health Center Board. "This seemed to be a creative and logical step to mitigate some of the financial stress being experienced by our health center due to continued reduction in payment levels."

Sheetz added, "The ability to continuously adapt to the market and try new ideas is essential to the survival of rural hospitals. I wanted to make sure that I was leaving this institution in a situation that would facilitate future adaptability and continued success."

Charles Merritt, chair of the Marengo Memorial Hospital Board of Trustees said, "This is a chance for Marengo and Sigourney to be among the first in Iowa with this type of arrangement. This is not only a good way to manage expenses, but just as many rural communities share school superintendents, it is likely to be the future of executive leadership in smaller rural health care facilities. This collaboration will undoubtedly lead to service and expense improvements that are as yet unforeseen."

R. Edward Howell, director and CEO of the UI Hospitals and Clinics, said UI Health Care has long operated in support of community-based hospitals and physicians.

"This is an innovative response to a unique set of challenges facing two rural hospitals that have sought support from University of Iowa Health Care," he said. "Consistent with our commitment to maintaining a strong, community-based health system in Iowa, we have worked with both Marengo Memorial Hospital and Keokuk County Health Center to be supportive of their interest in adopting this creative approach to assuring strong executive leadership."

Trachta's salary and benefits will be shared equally by each community hospital, and he will likely spend two full days and one half-day in each community each week. Sigourney and Marengo are approximately 35 miles apart.

Trachta served as an administrative resident at the UI Hospitals and Clinics during 1997-98 and as an administrative fellow during 1998-99. He received master's degrees in Business Administration and Hospital and Health Administration at the UI in 1997.

University of Iowa Health Care describes the partnership between the UI College of Medicine and the UI Hospitals and Clinics and the patient care, medical education and research programs and services they provide.