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A group of Riverton residents are moving closer to building a new hospital in their Fremont County town, in a direct challenge to the local health care system there.

Meanwhile, that system — SageWest Health Care — announced Monday that it will replace its retiring CEO with a veteran hospital administrator. John Ferrelli will take over the hospitals from Alan Daugherty, who will step down after a two-year stint as CEO, on April 22.

Ferrelli previously served as the vice president of Vibra Healthcare, another for-profit company. Before that, he was the CEO of Seton Medical Center in Daly City, California, according to his LinkedIn page. Seton Medical was owned by the nonprofit Verity Health, which recently went bankrupt. In his two years at Seton, the hospital posted consecutive losses, albeit lesser ones in his second year at the hospital — just $141,000, according to public records. In his first year, he stemmed the hospital’s bleeding somewhat: Seton still lost more than $922,000, but much less than the $4.82 million loss posted in 2015.

“John’s extensive knowledge and leadership experience in managing many types of hospitals will be a tremendous asset to our organization,” Mike Bailey, chair of the SageWest board of trustees, said in a statement accompanying the announcement Monday. “We are honored to name him CEO, and we look forward to working alongside him in our dedicated effort to making communities healthier.”

Ferrelli will take over a for-profit hospital system that’s faced concerted and concentrated resistance from a group of prominent Riverton residents for months. That group — consisting of former physicians, a former mayor and others, and newly minted as the Riverton Medical District — has charged SageWest, and its owner LifePoint, of systematically gutting the Riverton hospital’s services in favor of the Lander facility.

In response, the local group just last week received the first draft of a feasibility study to examine the cost of building a new, nonprofit hospital in town. They already have the land, said Vivian Watkins, who chairs the group, via an 8-acre donation from the Reach Foundation near the town’s middle school. To build and equip a facility with the services that the SageWest’s Riverton location previously had will cost about $35 million, according to the study.

“We had approached LifePoint four times to either sell or lease (their Riverton hospital). They have refused to do so. They said, ‘No, we’ll never sell it,’” Watkins said. “We felt we had no other choice. We couldn’t go sit down and say, ‘Well, OK, I guess we have no hospital then.’”

To fund the new hospital, Watkins said the group is looking at several bonding agencies, after rejecting the option of putting it to a vote because it would be a massive tax increase for locals.

She said it would be another several weeks before the final preliminary work would be done.

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The local resistance has not been the only thorn in the side of SageWest. In January, a few months after Watkins’ group began its work, the Eastern Shoshone tribe publicly accused SageWest and Apollo of overcharging its members, which SageWest denied and Apollo declined to comment on.

In February, SageWest confirmed it would close PineRidge behavioral health unit in Lander, citing federal regulations that would’ve prompted the company to upgrade infrastructure to make it harder for patients to harm themselves. It had previously shuttered other services, like Riverton’s OBGYN offerings. Other services have been curtailed: The former pathology director in Riverton previously told the Star-Tribune that the hospital could give almost no blood transfusions.

Two years ago, before all of the local frustrations, SageWest’s Lander hospital was dinged by state health officials for using unclean surgical equipment.

Daugherty previously said that there was no chance SageWest would shutter the Riverton location.

Editor's note: This story has been updated to clarify the status of the feasibility study and when LifePoint took ownership of the hospitals.

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Follow education reporter Seth Klamann on Twitter @SethKlamann

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Education and Health Reporter

Seth Klamann joined the Star-Tribune in 2016 and covers education and health. A 2015 graduate of the University of Missouri and proud Kansas City native, Seth worked for newspapers in Milwaukee and Omaha before coming to Casper.

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