REDWOOD FALLS — Redwood Area Hospital together with the city of Redwood Falls announced Wednesday that they have taken initial steps toward joining the new regional health system, Carris Health, a subsidiary of CentraCare Health.

The Redwood Falls City Council voted on Tuesday night to take this action through a Letter of Intent.

“Redwood Area Hospital is a vital healthcare resource for the region. This partnership brings together the shared geography, shared values and shared goals of the hospital and Carris Health system for the benefit of our patients throughout the region,” said Dr. Cindy Firkins Smith, co-CEO and president of Carris Health.

The partnership of Rice Memorial Hospital, ACMC and CentraCare Health formed Carris Health in January.

An ACMC medical facility is located in Marshall.

The Letter of Intent outlines a transfer of ownership to Carris Health with the health system committing to invest $60 million over the next 10 years, including a new health campus bringing both the hospital and Redwood Falls clinic together.

Goals for the new health campus are to provide a comprehensive care model, making local care less complicated, and allowing patients coordinated care with needed services and improved access to specialty care locally. The hospital and clinic also plan to transition to the same electronic medical record system, improving patient safety.

“This is an exciting time for healthcare in our community,” said local physician Dr. Greg McCallum, who served on the affiliation steering committee. “Together we have potential to create a care approach that best fits with the future direction of health care for our community for generations to come.”

The Letter of Intent outlines strong financial stability for taxpayers with a payment in lieu of taxes for an additional 10 years and opportunity for additional payments based on hospital performance.

Carris Health will also make lease payments for the current hospital building over the next two years that will offset costs for disposition of the building upon completion of the new health campus.

In the coming months definitive agreements will be outlined for approval in June with an anticipated closing date of Dec. 31.