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CEO: MGH on solid footing despite changes in health care

May 19, 2011
By CHRISTOPHER DIEM - Journal Staff Writer ( , The Mining Journal

MARQUETTE - At a meeting this morning, Marquette General Health System officials said the hospital is on solid financial ground and despite challenges is ready for the changes brought on by health care reform.

Richard Schaefer, chairman of the MGHS Board of Trustees, said the hospital is projecting to have a $12 million operating margin this fiscal year. That's following operating margins of $7 million in 2010 and $10 million in 2009.

Prior to 2009, the hospital had operational losses for three straight years: a $6 million loss in 2006, $5 million loss in 2007 and a $10 million loss in 2008.

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Schaefer said the turnaround came about because of multiple financial and operational changes at MGH.

Schaefer said one of the biggest challenges facing the hospital is people from the Upper Peninsula going out of the area for their health care.

He said 75 percent of Marquette County residents went to MGH for their health care in fiscal year 2010 while 8 percent went outside the U.P. He compared that to fiscal year 2009 when about 77 percent of county residents went to MGH and 7.4 percent went out of state.

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"It's a competitive world out there. Everybody is trying to garner their share of the market and you can see that we have challenges ahead of us," Schaefer said.

MGH and Superior Health Partners President and Chief Executive Officer Gary Muller said health care has changed more in the last year than it has for his entire 37 years in the health care business.

He said MGH and SHP will be working with other organizations in preparation for health care reform.

"This whole thing, we think, is going to roll out over the next 10 years but we do know, starting July this year, we're getting less money. Medicare is going to pay all providers less money starting July 1. So guess what, we have to do things differently and we will," Muller said.

Christopher Diem can be reached at 906-228-2500, ext. 242.



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