(Iron Mountain - March 01, 2018) - As the financial condition of the Dickinson County Healthcare System approaches crisis stage, with bankruptcy a real option, talks are continuing between officials of Dickinson County, the Dickinson County Healthcare System and Bellin Health.

Bellin operates a flagship hospital in Green Bay and a number of clinics and other health care facilities in the Northeastern Wisconsin region. In 2017, DCHS and Bellin agreed to a "letter of intent," under which operation of the facility would be handed to Bellin. Bellin is a privately owned, non-profit organization. Unlike the current hospital board of directors, the Bellin board is not open to public scrutiny.

While many are applauding this proposed change, there may be implications which haven't been thoroughly considered.

Any thoughts that the County was in a position to SELL the facility to Bellin evaporated long ago. At this point, the question appears to be: Is Bellin willing to take over the operation and assume it's debt. The fact is that neither the County Board of Commissioners or the DCHS Board of Directors has any real leverage in these negotiations.  There is also the possibility that some sort of arrangement could be agreed upon whereby Bellin would not assume direct ownership, or participate in the accrued debt (which currently exceeds twenty million dollars).

There is no doubt that Dickinson County Memorial's finances are in a state of near crisis. But before we're too quick to criticize the DCHS, let's consider a couple of facts:

According to Bloomberg Reports, 22 similar hospitals have already filed for bankruptcy protection this year, and dozens of others are facing the same fate.

According to that same Bloomberg Report, hospitals, including private rural ones, may be among the hardest hit by changing levels of Federal funding. The Affordable Care Act, known as Obamacare, reduced payments to hospitals that serve a large number of poor and uninsured patients, known as "disproportionate share hospitals," on the theory that more patients would be insured under the law. Congress delayed those cuts several times, but didnít do so for the current fiscal year, which may "single-handedly" throw hospitals into immediate financial distress. Many of these small institutions operate on less than one dayís cash on hand.

"Smaller hospitals have already been struggling for years,Ē said Kristin Going, a partner in the New York office of Drinker, Biddle & Reath LLP. "Since 2010, a growing number of patients have enrolled in high-deductible health plans that force them to shoulder more of costs when they get treatment, according to the U.S. Centers for Disease Control and Prevention. That has translated into more bad debt from customers for hospitals and other providers."

At the same time, as part of the Presidents tax cut package, the Congress removed the penalty for not purchasing insurance, dealing another financial blow to hospitals as more uninsured patients show up at their doors.

There will always be areas where a facility can improve. But most of the complaints that one hears about the hospital have little to do with patient care.

By far the area that generates the largest number of criticisms is the Emergency Department. This is the first contact that many have with the facility, and a bad experience there can cause them to seek providers elsewhere. It's not enough to say that these problems and complaints exist in many emergency departments. There is no doubt that hospital officials could and should have done more to address these complaints.

The second most common complaint deals with the DCHS billing system, which virtually everyone seems displeased with. The major complaint is that people receive bills with no explanation of what they're paying for and get very little help if they call the hospital for explanations. While this has little to do with the care provided, it frustrates many to the point of seeking providers elsewhere. The hospital board has been aware of these complaints for years, but has chosen not to address them.

While complaints such as this are certainly not entirely responsible for the hospital's precarious financial condition, they certainly have not helped, especially not with a convenient and arguably aggressive alternative in the same market.

Which brings us to the subject of Bellin Health. There is no doubt that the Bellin Clinic, developed on the site of the former Dickinson County Memorial Hospital, has had a major impact on the hospital's finances, not just in numbers, but in the type of patient.

Bellin does not have an emergency room, thus they are not required to absorb the costs associated with that operation. Most of those who use the Bellin facility have the family support to travel to and from Green Bay; but more importantly they generally have better quality insurance and the ability to pay their bills. Bellin claims to have handled more than 13,000 procedures at that facility last year.

This has left Dickinson County Memorial with a disproportionate number of poorly insured or uninsured, and many who are not able to pay at all.

And herein lies the problem and the only possible solution; action by Congress.

The Medicare cuts have had a disproportionate effect on Dickinson County Memorial, due to demographics. With a median age nearly ten years above the national average, Dickinson County is more dependent on those Medicare dollars than are most other hospitals.

Anyone who believes that Bellin will come riding in as a "Knight in shining armor," solving all of these problems, is likely to be very disappointed.

There is no doubt that the hospital could do better in some areas. But the conditions that have caused the financial crisis have been primarily out of its control, and would be out of Bellin's control as well.

Without Congressional action restoring (or increasing) previous levels of Medicare and Medicaid funding, the hospital's financial condition will continue to deteriorate.

Without that funding, Bellin will be in no better position to maintain the current level of care than is the current board. Without that funding, services will have to be reduced, regardless of who is in charge.

DCHS officials are already doing everything possible to cut expenses without reducing services, but that can only go so far. At some point patients will begin to notice these changes, likely in the form of less local access to medical specialties.

The problem is acute and immediate. Sources at the hospital have told us that every day is a "dash for cash," trying to put together the funds necessary to pay bills and meet payroll.

Two years ago the hospital was in the black, and the future looked bright. Two things have changed since then. The first, and by far the most damaging, has been the Federal funding cuts. The other major change has been the rapid expansion of the Bellin facility on Woodward Avenue.

Far from being the "Knight in shining armor," many may find their access to health care diminished by a Bellin takeover. Different ownership will not improve the hospital's profitability, and it's not likely that Bellin will feel the same commitment to the local community that the current administration feels. Furthermore, there's no assurance that Bellin would keep all of the current services in place at DCHS since many of them duplicate services available at the Bellin Clinic, which is still undergoing expansion. Will Bellin keep in place very expensive hardware such as CT and MRI scanners? How about the very expensive emergency department?

One must, in fact, question whether Bellin has actually exacerbated the financial problems at DCHS.

While the County and DCHS officials may attempt to seek assurances on some of these issues during negotiations, the fact is that long-term, Bellin will make decisions based on finances, not on dreams or wishes.

On the other hand, without a Bellin takeover, DCHS will likely have to seek bankruptcy protection. Any bankruptcy reorganization will necessarily result in major health care delivery changes.

Congress could resolve this problem very quickly by restoring the waiver on the Medicare and Medicaid cuts.  Without such action, there are no good options; things will change, and not necessarily for the better.