Losses for DCHS ahead of acquisition

IRON MOUNTAIN — Dickinson County Healthcare System has yet to enjoy relief from its 2017 financial struggles, but plans are on course for its acquisition later this year by Bellin Health.

The hospital board on Thursday reviewed a report showing a year-to-date loss in operations of nearly $9.7 million through November. More than half of November’s $1.8 million loss was due to contractual adjustments with payers, including Michigan Blue Cross-Blue Shield.

After posting a gain of nearly $3.2 million in 2015, the hospital ended 2016 with an operating loss of about $3.6 million. A loss of $2.1 million was forecast for 2017.

Hospital officials have said that procedural and regulatory changes in Medicare and other insurers have cost DCHS $8 million in revenue in each of the past two years.

John Schon, DCHS administrator-CEO, said there are a number of initiatives — some of them involving Bellin — to improve the hospital’s finances.

A restructuring of physician practices is underway and the bed count at the hospital has been lowered from 96 to 49, which means all rooms are now private. The hospital hasn’t exceeded 49 inpatients in recent years, but other beds also are available if there is an influx.

Bellin, a non-profit health corporation based in Green Bay, Wis., announced plans in early December to acquire DCHS by the summer of 2018. An acquisition date has not yet been finalized, Schon said.

One remaining issue is pension obligations, which likely will consume a good share of the hospital’s sale value. As proposed, some employees under defined benefit plans may choose a one-time payout in lieu of a pension. The hospital converted to a defined contribution plan in about 2010, but a number of employees remain vested in defined benefit plans, Schon said.

In other action Thursday, the hospital board:

— Learned that December’s patient count was down from last year, but January has so far been very busy, mainly because of flu cases and more surgeries.

— Re-elected Bill Edberg as chairman, Jeff Campbell as vice chairman and Sally Blom as secretary. Others on the nine-member board include Dick Berlinski, Brock Wallis, Steve Zurcher, Dan Wentarmini, Dale Ward and Dave Holmes.

— Approved a three-year renewal of Schon’s contract. Bellin plans to retain DCHS employees, including the administrative team.

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

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