DCHS looks for turnaround after early losses in this year


News Editor

IRON MOUNTAIN – New financial measures are taking shape at Dickinson County Healthcare System as the hospital tries to rebound from a difficult first quarter of 2013.

“Like other hospitals across the country, we continue to feel the impact of the Affordable Care Act (ACA) and national health care reform,” said John Schon, DCHS administrator-chief executive.

“Meeting the challenges of reduced federal reimbursement levels within the ACA without sacrificing the quality of patient care is a challenge, but we remain committed to maintaining high quality and safe care for our patients and to remaining financially viable,” Schon said in a news release.

“Our public can help us remain viable by staying local for their health care whenever possible,” Schon continued. “Dickinson County Healthcare System cares for the community directly through the provision of high quality health care services to its citizens and indirectly by being a part of the economic engine that keeps the entire community viable as well. Health care dollars spent locally are an investment in the community’s quality of life – it is essential to remember this when you get a referral or suggestion to seek your care away from home.”

Hospital trustees on Thursday reviewed a financial report showing a loss in operating income of $877,990 in March. That performance brought the year-to-date operating loss to $1.6 million.

Revenues through the first quarter of 2013 totaled $21.5 million, which was some $850,000 less than budgeted.

“We’re not the only hospital facing this,” Schon noted. But DCHS, he said, faces the added complication of patients traveling south (to Green Bay, Wis.) for care that is available locally.

“It’s affecting our financial stability,” Schon said. “Local health care is high quality, safe, high tech, experienced, personal, convenient, less costly and economically supports the entire community. Eight good reasons to stay local for your care.”

Expense reduction plans undertaken by DCHS were outlined as follows:

– Volume related staffing reductions.

– Targeted early retirements.

– Internal and external purchasing agreement changes.

– Employee health plan changes.

– Physician services changes.

Those and other measures are meant to provide nearly $1.9 million in savings by the end of 2013.

In addition, DCHS plans to potentially add nearly $2.1 million to the bottom line by year’s end through initiatives that include:

– Revenue bond refinancing.

– Re-negotiation of insurance company reimbursement contracts where possible.

– Implementation of a Michigan State University residency training program.

– Enhanced collection of bad debt.

– Physician services billing enhancements where applicable.

“The issues will change every year, but the struggle is going to continue,” said William Edberg, hospital board chairman. “This hospital is a real asset to the community and we want it to stay that way.”

Despite the rough first quarter, Schon expressed optimism that DCHS can turn its finances around.

The board received an annual DCHS audit report from the accounting firm of Eide Bailly. No audit adjustments were necessary, which has been the trend for more than 10 years.

It was noted that in 2012 the health care system experienced a $1.7 million turnaround from 2011, with DCHS also comparing favorably to other hospitals in the region.

County Commissioner Joe Stevens, who serves as a liaison to the hospital board, expressed confidence in the hospital board and administration, noting there are challenges at all levels of the economy.

“I admire the way you have gone about trying to relieve some of those struggles,” he said.

Jim Anderson’s email address is