DCHS plan anticipates few layoffs
IRON MOUNTAIN — It’s likely only a handful of employees will lose their jobs as Dickinson County Healthcare System moves closer to putting a restructuring plan in place, interim CEO Jeanne Goche said Tuesday.
There has been so much natural attrition that the number of layoffs will “probably be a dozen or less,” Goche reported during a hospital board meeting.
Despite a drop in patient volumes, DCHS had an operating gain of nearly $750,000 through the first quarter of 2019, potentially putting it on course for its first profitable year since 2015. Losses over the past three years totaled about $21 million.
“We plan on the hospital being here for a long time to come,” Board Chairwoman Margaret Minerick said.
Goche said a restructuring plan has been drafted and the process of communicating details internally will start soon. “We’ve got a lot of fabulous staff persons here,” she said.
Because of attrition, the hospital actually is doing some hiring, and the new plan offers a chance for more adjustments.
“Any number of departments are feeling the stretch,” Goche said of the loss of employees.
Minerick declined to comment on a lawsuit filed by the Michigan Nurses Association over the DCHS pension plan, which was changed last year under a planned sale to Bellin Health that eventually fell through.
“Our attorney just received it about a week ago,” Minerick said of the lawsuit. “We haven’t responded yet. I’m not comfortable discussing it.”
Trustee David Brisson said the hospital’s defined benefit plan is funded at about 70 percent, which means it’s “in relatively good shape.” With the hospital no longer anticipating a sale, about 60 percent of the pension monies are being put into stocks. An investment adviser projects an overall annual rate of return of 7.5 percent, Brisson said.
“It’s basically on track and on target,” he added.
“There’s no crisis of any kind.”
With the meeting dominated by pension questions from employees and retirees, Trustee David Holmes suggested a session be organized to give answers on a range of issues, some of which still need to be resolved.
Last year, with deepening operational losses, DCHS closed its defined pension benefit plan to help facilitate a sale. It has since adopted a defined contribution, or 401(k), pension plan.
As DCHS restructures, former northern Michigan congressman Bart Stupak is leading an effort to obtain $30 million or more in long-term financing through the U.S. Department of Agriculture’s Rural Development Agency. That borrowing would allow DCHS to pay outstanding debts, possibly make new investments and chart its future course.
Stupak is a partner in Venable LLP, a Washington D.C. firm hired seven months ago after Marquette-based U.P. Health System withdrew from acquiring the community hospital. Earlier, Green Bay-Wis.-based Bellin also backed away from a potential deal.
Goche, an Iowa health care executive, came to DCHS in December during the early weeks of the Venable-led restructuring. Minerick said a search may begin soon for a new CEO, although Goche is under contract through at least July and possibly longer.
In other action, the hospital board:
— Approved a financial report showing a gain in operating income of $407,361 in March. After calculating non-operating revenue and expenses, March closed with a bottom line of $248,030. March’s performance brought the year-to-date gain in operating income to $732,642, with a positive bottom line of $472,759.
— Reviewed activity for March showing DCHS cared for 245 inpatients; 13,787 patients in the outpatient setting, including 1,112 in the emergency department; and 9,335 patients in physician offices. Uncompensated care provided for the month totaled $604,368. Operating revenues in March totaled $8.2 million, while expenses came in at $7.8 million.
— Heard Cathy Hartwig, obstetrics manager, report DCHS has earned a gold rating from the Alliance for Innovation on Maternal Health. AIM is a maternal safety and quality improvement initiative based on proven approaches to improving maternal safety and outcomes.