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County board seeks info on role in DCH’s future

IRON MOUNTAIN — County officials want an update on Dickinson County Healthcare System’s legal status in light of recent developments.

Joe Stevens, a county commissioner from Kingsford who serves as liaison to the hospital board, told the county board Monday the information is needed to discuss “what we have to do with the hospital in the future.”

On Tuesday, DCH announced plans to join Marshfield Clinic Health System, with a “definitive affiliation agreement” to be completed by the end of the year. In a news release, the parties said additional terms of the deal won’t yet be shared.

Meanwhile, there has been no public discussion on whether county board approval is needed for a potential agreement with Marshfield, or what the structure of a Marshfield/DCH entity might be.

Just a week ago, DCH closed on $16.9 million Rural Development loan from the U.S. Department of Agriculture. Under terms of the loan, the county agreed to give up the deed to its hospital property on U.S. 2, putting it in the name of DCH to allow it to be used as collateral.

The deed transfer was authorized by the county board in August 2019, when it put the property in escrow pending the USDA’s decision.

DCH purchased the 27-acre parcel on U.S. 2 that includes Dickinson County Memorial Hospital and related clinics in 1994 for $700,000. In exchange for the county approving the hospital’s request to seek revenue bonds for construction, the county required it be deeded the property. Since then, it has leased the U.S. 2 site to DCH for a nominal fee.

DCH operates as a Michigan municipal health facility corporation under Public Act 230. It receives no county appropriations or taxpayer support and has been self-sustaining since moving to the U.S. 2 site in 1996.

As it stands, Stevens said Monday, DCH board appointments remain subject to the advice and consent of the county board. With the deed now surrendered, the picture is less clear on the county’s role in hospital oversight, he said.

Pursuit of a USDA loan began in October 2018 when DCH hired Washington D.C.-based Venable LLP to direct a financial restructuring that would not require bankruptcy. That action came after two planned acquisitions of DCH fell through. Bellin Health of Green Bay, Wis., backed out in May 2018 and then Marquette-based UP Health System withdrew in September 2018.

In 2019, DCH had sought a $26 million UDA loan but was rebuffed. As an alternative to federal borrowing, the hospital was prepared in early 2020 to sell $32 million in revenue bonds. a plan that also called upon the county to give up the U.S. 2 deed. That effort, however, was shelved when the coronavirus outbreak disrupted financial markets.

In August 2020, the county board was informed the hospital again would seek a USDA loan, but this time for $16.9 million. The lower amount was made possible by COVID-19 assistance received through the federal CARES Act, as well as a better financial performance.

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