Cheyenne Regional Medical Center Trustees Announce Intention to Seek Affiliation

January 30, 2017

Cheyenne Regional Medical Center’s Board of Trustees voted Friday afternoon to advise the Laramie County Board of Commissioners that the health system plans to release a formal proposal seeking affiliation, in the form of a management services agreement, with a larger health system that meets criteria developed with the help of community members, employees and medical providers.

The vote to move forward with the release of a formal request for proposal (RFP) was unanimous and was made in open session at the trustees’ annual retreat on January 27.

“As trustees of a hospital that has been in the community for 150 years, our first obligation is to our community – to ensure that CRMC stays strong and viable, and to ensure the population has access to a wide range of quality care,” said Bill Larson, chairman of CRMC’s board of trustees.

“We determined this direction after carefully considering our strategic goals and identifying objectives that would be best advanced with this form of affiliation,” Larson said. “Increasing competition, recruiting and retention challenges, decreasing reimbursements from public and private payors and concerns about uncompensated care could make it difficult in the future to remain a viable health system without the benefits of an affiliation with a larger system.”

The trustees came to their decision after a months-long strategic planning process that included analysis of the hospital’s overall capabilities by an outside healthcare consulting firm and input from nearly 500 employees, medical providers and community members. The input was received at forums and through online surveys conducted in December and January.

“The analysis and the forums showed our strengths to be our employees, physicians, clinical staff, overall quality, ability to provide well-communicated and well-managed care across the continuum, and our brand,” Larson said. “But they also show we need to ensure stable and consistent executive leadership, cost containment and a long-range plan for thriving in insurance payment models that require larger patient volumes than can be generated in our primary service area alone.”

To stabilize leadership, Larson said that Patrick Madigan, CRMC’s Interim CEO and former chairman of the board of trustees, has agreed to remain in that position through the process of choosing the best affiliate health system.

“Mr. Madigan has the trust of the board and executive team and has demonstrated that he is very capable to guide CRMC during this transition period,” Larson said.

Larson noted that the need for an affiliation was addressed in the forums, and that most community members and employees expressed acceptance that CRMC should ally itself with another health system, while taking care to retain local decision-making and CRMC’s brand. The management services agreement structure accomplishes all of these objectives.

“This should not really be a surprise to anyone within our system or to anyone who participated in the open forums,” Larson said.

“The next step is to develop the RFP,” said Phyllis Sherard, CRMC’s chief strategy officer and vice president of population health. “The tentative timeline would then be for the RFP to be released in the spring. The evaluation of proposals, selection and negotiation of terms will take through the fall, with approvals and closing anticipated before the end of the year.”

“The review and decision-making process will be slow and deliberate and will include the county commissioners and CRMC trustees, executives and employees,” Sherard said.

Sherard asked that community members be patient with the process and cautioned that there may be some health systems that make a direct “pitch” to community members and local leaders through direct mailings and other means.

Sherard will serve as CRMC’s sole point of contact during this process.

Laramie County Commissioner Buck Holmes said that the county commissioners support the hospital’s decision and will work collaboratively with the hospital as it moves forward with the RFP review and decision-making process.

“The decision to move forward with an RFP was made after many months of careful analysis, input, thought and consideration. We intend to do our due diligence and will also need to work side by side with the county commissioners before deciding how to proceed,” Sherard said. “We want to make the best decision for our employees, our providers and our community.”