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IRON MOUNTAIN -- The sale of Dickinson County Healthcare System to Marquette-based UP Health System will no longer be pursued.
DCHS and UP Health System announced today that the organizations have terminated a non-binding letter of intent signed in July. In a press release, the parties cited "an inability to reach agreement on the terms of an acquisition."
With this action, DCHS is no longer in exclusive discussions with UP Health System and will explore all options for the hospital’s future, including potential alternative arrangements with UP Health System, officials said.
"We have been transparent with the community and our stakeholders about the financial distress our hospital has faced, similar to many other rural hospitals across the country," said Bill Edberg, chairman of the DCHS Board of Trustees. "The management team and board will continue to work diligently to identify the right path forward for the health system. I am hopeful that there will continue to be even stronger support from all stakeholders in helping our community continue to have access to quality health care close to home."
UP Health System remains committed to serving the Upper Peninsula and believes that Iron Mountain and Dickinson County deserve access to quality local care, said Brian Sinotte, market president of UP Health System. "While we are no longer discussing this acquisition arrangement, we will continue to explore collaborative efforts with Dickinson County Healthcare System to provide health care in Iron Mountain and Dickinson County," he said.
DCHS has been seeking greater financial stability after Bellin Health of Green Bay, Wis., withdrew in May from an acquisition agreement that was estimated at $61 million, all of which would have gone to pay the hospital's long-term debt and unfunded pension liabilities.
After signing a non-binding letter of intent July 19 to explore a possible sale to UP Health, officials said it would take 60 to 90 days or more to determine if negotiations should begin on a definitive agreement. UP Health is affiliated with Duke LifePoint, a joint venture of Duke University Health System Inc. and LifePoint Health, a private health care company.
DCHS's financial losses have slowed -- after a negative $13 million bottom line in 2017 -- but a downward trend in business continues to keep it in the red. The 2018 year-to-date bottom line is a negative $4.1 million.
Dickinson County Commissioner Joe Stevens, a liaison to the DCHS board, said it's "frustrating and sad" to see the proposed sale fall through. Nearly a year has been spent on the exploration of a sale, beginning with a letter of intent signed with Bellin in December 2017, he said.
A hospital board meeting was tentatively scheduled for Wednesday to discuss possible courses for the future.
"We have to prepare for whatever that may be," Stevens said.
At a DCHS board meeting Sept. 11, Edberg had indicated the relationship with UP Health seemed to be "to be forging ahead in a positive way." Officials at that meeting continued to emphasize the importance of community support in keeping DCHS viable.
Serving northern Wisconsin and the central Upper Peninsula for more than 66 years, DCHS is a 49-bed community hospital with a team of more than 80 active physicians and each year treats over 200,000 patients.
Jim Anderson can be reached at 906-774-3500 ext. 26 or janderson@ironmountaindailynews.com.