DCHS seeks health care partner

IRON MOUNTAIN – Dickinson County Healthcare System officials are seeking county support as they look for a long-term regional health care partner.

DCHS Administrator John Schon, along with hospital trustees, made a presentation to the county seeking support for a process to locate a regional health care partner.

The process would include forming a Strategic Partnership Advisory Committee by the Hospital Board; it is anticipated that this committee would include members of the County Board, DCHS Medical Staff and DCHS administration.

The committee would be charged with recommending a consultant(s) to advise DCHS in the development of a Request for Proposal seeking a health care partner.

Given the considerable cost, time and effort involved in this process, Hospital Board members wanted the county’s support as they sought a long-term partner for DCHS.

The process is expected to take 6 months to a year to complete.

Dickinson County Memorial Hospital and its affiliated clinics are organized as a municipal corporation under Public Act 230.

Therefore, the Strategic Partnership Advisory Committee, along with its selected consultant(s), would need to assess whether there would be any required amendments to Public Act 230 that would be necessary in order for the final selection of a DCHS health care partner to occur, officials said.

In reference to the change in PA 230, Hospital Board Trustee Bill Edberg said that revision to the law would potentially allow the health care system to have the greatest degree of flexibility, which in turn would make it easier to find the most appropriate partner.

Schon said DCHS has experienced significant financial challenges in 2013 as have many hospitals throughout the region and throughout the United States. He said that these challenges have been multifaceted as outlined below:

– Declining inpatient volumes created by a dramatic shift from inpatient to outpatient care.

– Continued fluctuation in the daily inpatient census, which has ranged from a census in the low 20s to the mid to upper 60s per day.

– Unfavorable payer mix – a shift away from traditional insurance payments to more Medicare, Medicaid, and self-pay patients.

– Substantial increases in DCHS’ Bad Debts and Total Uncompensated Care, which is predicted to reach $9.6 million by the end of 2013.

– Declining payments from the Medicare and Medicaid programs that are dependent upon federal and state funding and shortfalls in commercial insurance reimbursement rates.

“The hospital has been a success story for the past 20 years, and it is in a dilemma right now,” said County Commissioner Joe Stevens. “I do not know what more the Hospital Board and administration can do to make this financial situation better. We cannot allow the hospital to fail and have to come up with a partnering plan to maintain its viability.”

“The deck is stacked against us as far as future reimbursement, which is not going to get better,” said Edberg. “It is not just about health care for the community, but it is also about maintaining the economic impact of our area’s largest employer.”

“This is the very beginning of a process to find a partner for DCHS that will take the better part of six months to a year, however, this should not be interpreted as an initiative to just sell the hospital as has been the case in several communities throughout the Upper Peninsula,” Schon said.

“There are many different partnerships and many different partners that need to be identified and evaluated for the best fit to occur for our health care system and community,” Schon said. “And we need to remember that we have a lot to offer any future partner: a dedicated and talented group of physicians and health care professionals/work force; a broad gamut of nationally recognized, high quality health care services and cutting-edge medical technology; and a supportive community.”

County Board Chairman Henry Wender said the County Board will meet, and if agreement is reached, they will forward names of the commissioners they would like to have sit on the Strategic Partnership Advisory Committee. He would also like to receive a list of the others who will be serving on the committee.