UP Health would want tax break
Minutes released from two county executive sessions on potential sale of DCHS
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IRON MOUNTAIN -- UP Health System would expect a tax break as a condition of acquiring Dickinson County Healthcare System, according to minutes from a June 15 executive session of the Dickinson County Board.
Minutes from the closed session were released in response to a request from Iron Mountain Mayor Dale Alessandrini, who claims the board met illegally. County Controller Brian Bousley has admitted to misinterpreting the statute and concedes that several of the board's recent discussions should have taken place in open session.
In the June 15 meeting, held at 11 a.m. in the board room of the courthouse, DCHS Board Chairman Bill Edberg reported that UP Health System's owner Duke LifePoint was seeking a tax abatement for 12 years, or up to $17 million, in preliminary acquisition talks.
On July 19, DCHS signed a non-binding letter of intent to explore a possible sale to Marquette-based UP Health, which is affiliated with Duke LifePoint, a joint venture of Duke University Health System Inc. and LifePoint Health, a private health care company. In a press release, representatives of DCHS and UPHS said it would take 60 to 90 days or more to determine if negotiations should begin on a definitive agreement.
Bousley said at a July 23 meeting that the hospital campus was being appraised in the event LifePoint Health becomes the owner. There has yet to be an open discussion about tax forgiveness.
During the June 15 closed session, Edberg reported that DCHS CEO-Administrator John Schon had retired and taken a payout, but was still working full-time. A new contract would be negotiated, Edberg said. Commissioner Barbara Kramer questioned if there was a succession plan.
Also at the June 15 meeting, Edberg revealed that LifePoint would want the county to manage pensions for current DCHS retirees once a buyout was settled. Minutes from a June 25 executive session indicate hospital and county officials have consulted the Municipal Employees' Retirement System of Michigan about that possibility.
During the June 25 private meeting, Commissioner Joe Stevens, who serves as liaison to the hospital board, reported that DCHS trustees Steven Zurcher and Dan Wentarmini have resigned over disagreements on the course of the nine-member board. Stevens also said that four surgeons practicing at DCHS were being recruited by Bellin Health of Green Bay, Wis.
The county board has held numerous closed sessions since Bellin Health announced in December it planned to acquire financially troubled DCHS. That deal, however, fell through in May after Bellin cited unpredicted losses in DCHS operations.
Bousley believes that most, or all, of the board's closed sessions on the proposed Bellin sale were legal because they involved discussions on attorney advice. Recently, the board went into private sessions under the premise of discussing the purchase or lease of property, which is a valid reason under the Open Meetings Act. The county, however, plans to sell hospital property, not purchase it, and closed sessions are not permitted for that. No board actions were taken after any of the closed sessions, which were informational, according to Bousley.
Minutes of the June 15 and 25 closed sessions were prepared by Dolly Cook, Dickinson County clerk-register of deeds, and recently posted by Alessandrini on his Facebook page.
DCHS has been seeking greater financial stability after Bellin's withdrawal from an acquisition agreement that was estimated at $61 million, all of which would have been used to pay the hospital's long-term debt and unfunded pension liabilities. DCHS operates as a Michigan municipal health facility corporation under Public Act 230. It is owned by the county but receives no direct county appropriations or taxpayer support and has been self-sustaining since moving to its U.S. 2 facility in 1996.
In late July, it was announced that private equity giant Apollo is acquiring LifePoint Health in a deal valued at $5.6 billion. Apollo plans to merge LifePoint, which owns and operates facilities in 22 states, with RCCH HealthCare Partners, a 16-hospital system. The combined entity would operate 84 hospitals in largely rural areas across 30 states, according to the Associated Press.
Jim Anderson can be reached at 906-774-3500 ext. 26 or janderson@ironmountaindailynews.com.