Bellin to acquire DCHS

OFFICIALS WITH DICKINSON County Healthcare System announced this morning they have signed a letter of intent to be acquired by Green Bay, Wis.-based Bellin Health Systems. (Theresa Proudfit/Daily News photo)

OFFICIALS WITH DICKINSON County Healthcare System announced this morning they have signed a letter of intent to be acquired by Green Bay, Wis.-based Bellin Health Systems. (Theresa Proudfit/Daily News photo)

IRON MOUNTAIN — Dickinson County Healthcare System announced today it has signed a letter of intent to be acquired by Bellin Health Systems.

Details of the agreement were to be discussed at a news conference late this morning at Dickinson County Memorial Hospital. DCHS, which opened a new 96-bed hospital on South Stephenson Avenue in 1996, has struggled financially in recent years.

Bellin Health, headquartered in Green Bay, Wis., serves much of northeastern Wisconsin and Michigan’s Upper Peninsula, operating hospitals in Green Bay and Oconto, Wis., as well as family medical centers in numerous communities, including one in Iron Mountain.

Scheduled speakers at today’s conference included John Schon, DCHS administrator-CEO; George Kerwin, Bellin Health CEO; Bill Edberg, DCHS Hospital Board chairman; Henry Wender, chairman of the Dickinson County Board; and Dr. Donald Kube Jr., DCHS medical chief of staff.

DCHS officials have cited Medicare and Medicaid adjustments, rising pharmaceutical costs, low reimbursement rates from Michigan Blue-Cross-Blue Shield, unreimbursed care and a number of other factors as operational challenges.

Dickinson County Healthcare Systems Administrator and CEO John Schon, left,  listens as Bellin Health CEO George Kerwin discusses the planned acquisition of DCHS by the Green Bay, Wis.-based medical provider. (Theresa Proudfit/Daily News photo)

Dickinson County Healthcare Systems Administrator and CEO John Schon, left, listens as Bellin Health CEO George Kerwin discusses the planned acquisition of DCHS by the Green Bay, Wis.-based medical provider. (Theresa Proudfit/Daily News photo)

Despite its financial difficulties — including an operating loss of some $7 million so far this year — the hospital has gained numerous accolades, including a Healthgrades ranking in the top 5 percent in the nation for patient safety.

Dickinson County Memorial Hospital first opened in 1951 on Woodward Avenue in Iron Mountain — coincidentally at the site of the current Bellin Health Clinic.

For more on this developing story, check the Daily News website at www.ironmountaindailynews.com.

By JIM ANDERSON

News Editor

IRON MOUNTAIN — Bellin Health expects to acquire financially troubled Dickinson County Healthcare System by the summer of 2018 under an agreement outlined Monday by hospital officials.

John Schon, DCHS administrator-chief executive, said he is “very comfortable and very excited” about the future of Dickinson County Memorial Hospital, a mainstay of the community since 1951. At a press conference to announce a letter of intent to explore being acquired by Bellin, Schon said it “makes sense from a culture, quality and financial viewpoint to join forces.”

Dickinson County Board Chairman Henry Wender described it as “one of the most historic days in the county.”

A purchase agreement with Bellin, a non-profit health corporation based in Green Bay, Wis., will be finalized over the next several months, but key points include:

— The new entity, Bellin-DCHS, will maintain a local voice in governance through a board of directors with representation from Bellin, DCHS and local community members. The board will have wide-ranging oversight and responsibility for Dickinson operations.

— Bellin will offer positions to current DCHS physician and employees, plus assume various collective bargaining agreements at each DCHS location as required by law.

— Bellin commits to providing and expanding health care services in the region and will invest in capital expenditures, including the conversion to an electronic medical records system.

The purchase agreement must be approved both by the Bellin and DCHS boards and also the county board. Michigan Attorney General Bill Schuette must approve as well. Schon said an agreement may be in place by late June or early July.

Asked if the county could receive any revenue from the transfer, Schon said it’s unclear if excess funds will remain once they sort through DCHS assets and liabilities. He noted DCHS has been independent of taxpayer support for more than two decades.

In a press release, officials emphasized Bellin offers the ability to better fund improvements and expand services.

“In today’s highly challenging and highly regulated health care environment, that requires access to capital and other resources, including highly trained medical personnel and technology,” Schon said. “A small system like ours can benefit from the human and financial resources of a larger partner, especially a proven innovator like Bellin. In addition, Bellin knows our market, our patients and our local population and we know them. The combined resources, including the talented physicians and employees of both organizations, will help us thrive not only today but for years to come.”

George Kerwin, Bellin Health president and CEO, predicted staffing consistent with current levels, saying Bellin “expects to employ the people that are here.” Bellin has worked collaboratively with DCHS for about 35 years, starting with cardiology services, he said.

“We are appreciative of the great work and dedication of DCHS physicians, employees and staff,” Kerwin said. “All of us at Bellin look forward to working with you as we help grow what is already an outstanding health care system.”

As a nonprofit Public Act 230 community hospital, DCHS has been financially independent since 1996, when it moved into a new facility on South Stephenson Avenue.

Despite recent financial struggles — including operating losses approaching $10 million over the past two years — DCHS still boasts some of the top patient safety rankings in the nation, officials noted.

Kerwin pointed to those rankings at Monday’s press conference, including a patient safety grade of “A” from the Leapfrog Group for five straight years.

Schon, in turn, praised Bellin, which was named a top urban hospital by the Leapfrog Group in both 2015 and 2016.

Locally, Bellin operates a health clinic on Woodward Avenue on property that once hosted the original Dickinson County Memorial Hospital.

Kerwin said Bellin and DCHS have shared expertise in areas that include supply chain management, lab and diagnostics, payment analysis, referral strategies, employee recruitment, staff training and strategic planning. He cited a high level of trust between the health care providers.

Bellin has continued to expand and enhance the availability of its services in the region, including cardiology, primary care, dermatology, orthopedics, behavioral health and neurology, Kerwin added.

Bill Edberg, chairman of the DCHS Board, said in searching for a partner for the hospital’s future, “it was already here.”

Wender, while acknowledging many details must be worked out, pledged the county board’s full cooperation. “Bellin Health is the best fit,” he said.

Dr. Donald Kube Jr., DCHS medical chief of staff, said he expects the acquisition to be good for the community, calling it “a time to be hopeful.”

DCHS has more than 90 active physicians and each year serves more than 200,000 patients. It employs a staff of more than 850, making it the major largest employer in the Dickinson County area.

Bellin Health Systems Inc., an integrated health care system, has more than 4,000 employees in northeast Wisconsin and the Upper Peninsula and is known for its emphasis on preventive health care. It is comprised of Bellin Hospital, Bellin Psychiatric Center, 31 primary care physician clinics and several retail health clinics. It operates Bellin Health Oconto Hospital in Oconto, Wis., Bellin Fitness and Bellin College as well.

Bellin has also formed Bellin Health Partners, a clinically integrated network that includes Bellin Health; Holy Family Memorial in Manitowoc, Wis.; and DCHS.

Jim Anderson can be reached at 906-774-3500, ext. 26, or janderson@ironmountaindailynews.com.

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