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History of the District

The United Hospital District was formed in 1973 when the city of Staples transferred ownership and operation over to the hospital district. The city hospital first started as a 24-bed hospital in 1936, and expanded to a 40-bed facility in 1957. The hospital district consisted of 10 townships and two cities, and at that time elections were held by various townships and cities to form the hospital district.

The purpose of forming the district was to expand board representation and financial support for health care services in the Staples / Motley area. The hospital district is allowed to be formed under state statutes which gives the board more flexibility in securing debt, owning real estate and had fewer restrictions than a 501C6 city facility.

In 1977, a new hospital and nursing home was constructed on Prairie Avenue with the merger of the hospital and the Mary Rondorf Nursing Home. The hospital merged with the clinic in 1997 and a private 501C3 corporation called Lakewood Health System was formed to merge public and private dollars. The district retained the debt and ownership of property, but turned over daily operations through an affiliation agreement and lease with Lakewood Health System.


Clinic Merger / Affiliation Agreement with Lakewood Health System

In the 1990s, it was projected that payment systems across the country would be changed to a capitated dollar system in which a set dollar amount would have to be divided between hospitals, clinics and other health care providers. In response to this proposed change, insurance companies and larger health systems began buying clinics to control the dollars in providing healthcare services. Lakewood Clinic knew that these market changes provided limited time for them to obtain any value in the sale of their practice. There was concern that in the years to come, the opportunity to sell the practice would be significantly reduced or minimized.

In 1995, a proposal was made by the hospital district to the Lakewood Clinic physicians to purchase the practice. The physicians agreed to the purchase by the United Hospital District and two years of negotiations were conducted.

On March 1, 1997, the hospital and clinic officially merged and became Lakewood Health System. The merger consisted of an affiliation agreement in which the district board transferred the assets, equipment, employees and third party contracts over to a new 501C3 private non-profit corporation called Lakewood Health System.

The district board has two representatives on the system board for oversight and to make sure they are effectively managing Lakewood Health System. The structure of the two boards maximizes the benefits of both for the health care system. The two boards each play a significant role providing the most effective support and availability of resources and effort to be focused on the access and delivery of exceptional health services to the Staples/Motley area.

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