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IRON MOUNTAIN -- A new partner may be ahead for Dickinson County Healthcare System following Bellin Health's decision Monday to kill an acquisition agreement negotiated since December.
Bill Edberg, chairman of the DCHS Board of Trustees, voiced optimism Thursday for "a positive outcome out of this" as hospital officials updated the Dickinson Area Economic Development Alliance on their plans.
Talks have begun with a new, unidentified provider who could potentially relieve the hospital's financial stress and stabilize the top-ranked facility, the economic group was told.
Regardless of the success of those talks, the immediate course is further belt-tightening and urging the community to choose DCHS for health care, said John Schon, DCHS administrator.
"The last thing we want to do is sacrifice services," he said. "The key component is supporting this health care system."
Those at the meeting reacted positively to Schon's request for support, saying they would encourage their employees and families to utilize DCHS specialists and hospital services.
In a joint statement Monday, Bellin and DCHS acknowledged "significant unpredicted losses" that drove up the purchase price beyond the $40 million to $50 million estimated when Bellin signed a letter of intent in December to acquire DCHS.
Despite cost-saving measures, DCHS incurred losses of more than $3 million through the first quarter of 2018 as patient volumes dipped. In addition, the hospital struggles with reimbursements from Michigan Blue Cross Blue Shield that are far below what other Upper Peninsula hospitals receive, Schon said.
According to DCHS estimates, if Blue Cross reimbursement rates were increased by 25 percent to a level closer to the U.P. average, net patient revenues would climb by $4 million annually.
Suggestions were made at Thursday's gathering to apply more political pressure on Blue Cross, though past attempts have yielded little.
Meanwhile, DCHS is recognized as a leader in quality care, one of just three hospitals statewide to receive an Excellence Award for patient safety three years in a row from the Economic Alliance for Michigan.
Joe Rizzo, DCHS public relations manager, said people who choose to receive services at DCHS aren't making a sacrifice. "They're coming here to receive great care," he said.
In Monday's joint statement, DCHS and Bellin said they would continue a collaborative approach to providing care. Relations, nonetheless, may never be the same.
DCHS officials said that, effective in July, Bellin will no longer contract with DCHS for laboratory and x-ray services at Bellin's recently expanded Iron Mountain clinic. That move is expected to cost DCHS about $1.5 million in revenues.
After profitable years in 2014 and 2015, DCHS's finances faltered, culminating in an estimated loss of $14 million in 2017. Still, the hospital continues to provide round-the-clock emergency coverage, including care from specialists, Schon said.
DCHS has more than 90 active physicians and operates as a Michigan municipal health facility corporation under Public Act 230. It receives no direct county appropriations or taxpayer support and has been self-sustaining since moving to its U.S. 2 facility in 1996.
Bellin Health Systems is a non-profit corporation that includes Bellin Hospital in Green Bay as well as Bellin Psychiatric Center and numerous physician clinics.