Essentia Health to Continue Operating Fosston Hospital After Arbitration Ruling

Essentia Health will continue to operate the hospital, clinic, and assisted living and long-term care facilities in Fosston, plus clinics in Bagley and Oklee, following an arbitration ruling in their favor.

An arbitration panel voted 2-1 in favor of Essentia in their dispute with the city of Fosston. The medical center is a non-profit that Essentia has operated for about 15 years under an affiliation agreement.

Fosston leaders have been trying to get decision-making authority back after Essentia relocated labor and delivery services from Essentia Fosston to about 60 miles away at Essentia Detroit Lakes in 2022.

“We are disappointed that the panel ruled by a vote of 2-1 in Essentia’s favor in our dispute over labor and delivery being discontinued at our hospital in Fosston,” Fosston Mayor Jim Offerdahl said. “The fact that it was not unanimous indicates that the city’s position has been validated, although the ruling favors Essentia, allowing them to continue to no longer deliver babies at the Fosston hospital.”

He continued, “The First Care Taskforce Executive Committee met this morning and we discussed what the impact of the decision means at this time. We will have further information after discussions next week with our consultants and legal team on what our next steps will be. But I will say that the task force is committed to restoring local decision making at the Fosston hospital.”

Essentia Health officials said in a statement that now that the arbitration process is over, Essentia is focused on the opportunity to engage their patients, colleagues, and the community in building a shared vision for the future of health care in Fosston.