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Mercy Hospital

It’s a common problem across rural America—aging hospitals and other health care facilities that lack the infrastructure and professional staff to deliver state-of-the-art medical care to patients in their communities. But Moose Lake, Minnesota—population 2,800—is a proud exception to that rule.

In October 2015, the community celebrated a significant renovation and expansion of Mercy Hospital, the leading medical center in the area. The $38 million project took over two years to complete, but it enables area patients to get more of the care they need locally rather than making the one-hour drive to urban hospitals in Duluth.

“The new wing has completely transformed the way we can serve the entire community—not just Moose Lake, but the surrounding area as well,” says Mike Delfs, chief executive officer of Mercy Hospital. The expansion includes private rooms, specialized birthing facilities, two intensive care units and a new MRI machine.

Financing for the Mercy Hospital project was provided by a combination of public and private sources. While the U.S. Department of Agriculture provided funding through its Rural Utilities Service, CoBank and AgStar from the Farm Credit System also helped finance the project, in partnership with local community banks in Minnesota.

The impact of the renovation has been immediate: Mercy Hospital had 900 more patient visits in 2015 than in any previous year. “This has been a huge investment in the future of Moose Lake and the entire region,” notes John Monson, senior vice president with AgStar.

Chris Shaffner, CoBank sector vice president and manager of the bank’s community facilities portfolio, says community facilities financing complements the bank’s broader mission of service to rural America. “The Mercy Hospital project is a tremendous success story,” Shaffner says. “It illustrates both the huge need for additional investment in community facilities around the country as well as the incredibly positive impact a project can have in a local community.”

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