HERMANN — Shortly after an audit report last week expressed concern about Hermann Area District Hospital (HADH) keeping its doors open after this year, Mercy Healthcare agreed to assume management of the hospital for at least five years. This makes HADH the latest public-owned rural hospital to come under Mercy Healthcare management.

According to a statement issued Thursday afternoon by the hospital, the management agreement received final approval from the hospital’s Board of Directors Monday night during a closed session after the regular monthly meeting. Mercy will begin its management of the hospital on Thursday, June 1. The cost of having Mercy manage the publicly owned hospital was not included in the announcement and HADH Administrator Dan McKinney couldn’t say what the cost will be. “I don’t know,” he told the Gasconade County Republican.

“It is extremely challenging to operate small, independent rural hospitals,” said Dale Ridder, president of the HADH board. “Hospitals like ours are closing across the state and country at an alarming rate. Our board had the vision and courage to act now to preserve vital health services in our community. Mercy is in the best position to help us continue providing care in Gasconade and Montgomery counties now and in years to come.”

A new administrator for HADH will be named by Mercy before June 1 to succeed McKinney, who is retiring at the end of this month.

“Dan has capably led our hospitals and clinics for 30 years and has given a total of 36 years of dedicated service to our hospital and community,” Ridder said. “The board wishes to thank him for his leadership over the many years, especially through the COVID pandemic. We wish him well in retirement and hope he remains an active member of our community.”

Under the agreement, Mercy will oversee management responsibilities for the hospital and its two clinics, Southwest Medical Associates in Hermann and Associated Medical Arts in Montgomery City. Physicians, advanced practice providers and co-workers employed by the hospital and clinics will remain HADH employees.

“Mercy has a long history of working to keep health care local and convenient for our patients,” said Eric Eoloff, Mercy Washington Hospital president. “We began working with Hermann Area District Hospital in 2014 under an affiliation agreement and have helped provide guidance on ways to try to improve costs and quality of care delivered in Gasconade County. With the new, more formal management agreement, we have a greater opportunity to leverage our Mercy resources and expertise in support of the community.”

Mercy owns and manages many critical access, rural hospitals across Missouri, Oklahoma and Arkansas.

Since 2017, Mercy has managed Washington County Memorial Hospital in Potosi, where the initial five-year agreement was recently extended another five years with the community’s support.

More recently, Mercy received unanimous approval from the Perry County Commission to finalize an eight-year lease agreement to operate and manage Perry County Memorial Hospital in Perryville.

The HADH board in recent years approached Mercy Healthcare about purchasing the hospital. After a lengthy due deliberation process, Mercy officials opted against buying the hospital, which sent HADH officials scrambling to find another partner. More recently, hospital officials were negotiating a lease agreement with AVEM, an Oklahoma management firm. However, that effort ran aground when internal issues at AVEM stalled the talks.