Backing away from plans to close St. Joseph’s Hospital, Fairview Health now is searching for partners to improve outpatient services while maintaining critical beds for the mentally ill in downtown St. Paul.

Leaders of the nonprofit health system spent weeks last fall brainstorming ways to eliminate an anticipated $600 million deficit over the next three years.

As of October, according to an internal email, plans included closing both Bethesda Rehabilitation Hospital and St. Joseph’s within three years, as well as closing or consolidating unidentified clinics across its network.

In December, Fairview laid off 340 people and reduced its beds at Bethesda to 50, from 89, while also closing some pharmacies and sleep centers.

But community outcry over the potential loss of St. Joseph’s, seen as a key resource for the mentally ill and chemically dependent, has Fairview trying to get creative in downtown St. Paul.

In a recent interview, Fairview CEO James Hereford said he agrees it’s important to preserve St. Joseph’s 80 beds for mental health and 25 for chemical dependency.

However, “The status quo is unsustainable. We’re losing $50 million a year” at St. Joseph’s, he said. “It’s not fair to raise prices everywhere else.”

Fairview will issue a request for proposals in the coming weeks for a consortium to help them maintain hospital beds for the mentally ill. Hereford has discussed the idea with HealthPartners and Allina Health and hopes to bring in some combination of charities, insurers and government.

Because reimbursement rates for the services are so low, he said, “There’s no reason for us as a community to compete in mental health.”

Hereford said there are dozens of examples of communities banding together to preserve mental health beds.

They include a 107-bed mental health center in Portland, Ore., which lists four health center partners and 45 community partners, and a planned 60-bed psychiatric facility on San Diego County-owned land supported by local health systems.

HealthPartners said it hasn’t seen Fairview’s request for proposals and can’t speak to it.

Allina said it shares Fairview’s concern about ensuring a “continuum of care, including hospital services” for mental health and chemical dependency.

HOUSING

St. Joseph’s is licensed for 400 beds but is staffed, for now, around 220. Rooms not reserved for mental illness and chemical dependency could be emptied in the coming years, leaving plenty of space for something new.

Hereford is interested in using that space for transitional housing; he named Catholic Charities as a possible partner.

Catholic Charities’ neighboring Higher Ground and Dorothy Day Place provide a combination of short- and long-term housing for people with no place to go. But they don’t have enough rooms to meet demand.

Laurie Ohmann, chief operating officer for Catholic Charities of St. Paul and Minneapolis, said she’s made no commitments to Fairview but is pleased to see they’re taking their time on St. Joseph’s and engaging with the community.

“I think the notion of partnership as a way to find some solutions here is going to be helpful,” she said.

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Wisconsin man notches 19th DWI while driving wrong way on I-35, Minnesota State Patrol says Sue Abderholden, state executive director of the National Alliance on Mental Illness, was glad to learn Fairview is willing to keep its mental health beds open.

“I’m glad they’re responding to the outcry … because it would literally crush our system,” she said.

However, if St. Joseph’s eliminates its other health services, that raises a major problem for the mentally ill people it serves. Because Medicaid doesn’t pay for services at psychiatric hospitals, most patients who now use St. Joseph’s would have to go somewhere else.

“I want to make sure that this is going to work,” Abderholden said.

Fairview said it’s aware of that concern.

“We would work these through if there is a partnership. We are in the very early stages of discussing possible partnerships with other care systems to serve the community and working out details to provide care to all, regardless of payor,” a spokeswoman said by email.

REACHING OUT

Besides holding onto hospital beds, Fairview is looking to do more for mental health in the community.

Hereford said he wants to expand primary care for the homeless and undocumented and make urgent care more accessible to reduce the reliance on emergency rooms. And he’s exploring ideas for extending services out to people rather than bringing them in.

“If you’re thinking of mental health only as inpatient, you’re probably not doing a very good job of caring for people,” he said.

Joe Spencer, president of the St. Paul Downtown Alliance, is trying to organize a special services district in which commercial property owners would team up to pay for a “safe and clean” program. Those services could include people trained to respond to mental health crises along the streets and parks — improving their care and reducing the cost of getting them help.

There are three hospitals downtown, but the city hasn’t “been taking full advantage” of their expertise outside the hospital walls, Spencer said.

Ohmann, of Catholic Charities, would welcome more health care providers at Dorothy Day and Higher Ground, noting her clients have a hard time making appointments. Minnesota Community Care already runs a clinic inside Dorothy Day, reducing barriers for transient people. Related Articles Minneapolis and St. Paul to add 70 electric car charging stations

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“If we had more of the health professionals closer in … that’s always more beneficial,” Ohmann said.

NAMI’s Abderholden has no objection to better serving people “upstream,” but she said there always will be a need for hospital beds, too. She notes other health systems in the state lose even more money on mental health than Fairview.

“It doesn’t mean you close down beds that people need,” she said.