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Hospital Sale Final In Cheboygan

Photo courtesy of the Cheboygan Area Chamber of Commerce.
Photo courtesy of the Cheboygan Area Chamber of Commerce.


People in Cheboygan are breathing a sigh of relief after a sale is finalized between the Cheboygan Memorial hospital and Flint-based McLaren Health Care. Emergency care and some outpatient hospital services are expected to resume this month.

A Community Threatened
Cheboygan is a tourist town with access to trails and lakes. A local economic development group has also talked up the area’s schools, its workforce and its hospital. Cheboygan Memorial was by far the region’s largest employer, with about 400 workers in late March. It had the only emergency room for miles around. But one day, April 3rd, it closed after the original sale to McLaren fell through in the 11th hour.

“It was a very nervous and trying 30 days for people,” recounts Doug Daugeamm, the executive vice president of Citizens National Bank, a community bank based in Cheboygan. He says today the community is both “relieved” and “comforted” at news the sale has finally gone through.

“I think in order for our community to be stable, you know, we need to have health care here,” he says. “We’re very dependent on our retirees, our people living up north. And, in order for them to want to live up north, we obviously have to have health care available to them.”

That makes him relieved as a banker too, because his business relies on a vibrant local business community. Without access to critical healthcare services, that was very much in jeopardy. But, financially, Citizen’s National Bank will lose out on this sale.

The purchase price for the hospital was just $5 million dollars. Cheboygan Memorial owed the local bank $3.8 million when it declared bankruptcy in early March. The hospital also owed more than $8 million dollars in federal government loans. Those are the first creditors in line for proceeds from the sale, but neither is expected to be paid in full.

An Unlikely Resolve
The sale was no guarantee after it fell through last month. For weeks it seemed doomed, as buyer McLaren couldn’t swing a deal with federal regulators of Medicare and Medicaid. McLaren actually issued a statement at one point saying it was no longer interested in offering emergency care or any hospital services in Cheboygan.

“In the end, you know, it was the needs of this community that prevailed,” says Tom Mee with McLaren. He’s in Cheboygan to help with the transition. He says, even after the sale, there won’t actually be a hospital in town.

“Patients who need inpatient stays of one, two, three days or more will be transferred to the Northern Michigan Hospital in Petoskey,” he says. “Cheboygan campus will become an outpatient-only campus going forward.”

The hospital’s nursing home unit will also remain closed and, of those 400 hundred workers on Cheboygan Memorial’s payroll in March, only about 150 will be asked to return to the job.

Moving Fast To Re-Open
“As we speak, there are people on the phone at Northern Michigan Hospital to rehire these people.” Mee says McLaren officials in Petoskey are working hard to get hospital services in Cheboygan staffed again as quickly as possible.

Mee says there’s a lot to be done to get the E.R. back to functional again, everything from recruiting back a skilled workforce to re-calibrating multi-million dollar equipment. So he says there are a lot of moving targets but here are the goals: McLaren wants round-the-clock emergency services open again sometime the week of May 14th, outpatient surgical services up and running again by May 29th, and already next week they’ll be moving primary care and other doctor’s offices back to their original locations.

Will It Be Enough?
Cheboygan County plans to take an active role in assessing the healthcare needs of the community. In the absence of a hospital in April, the county commission formed a health care advisory committee. County Administrator Jeff Lawson says now the group will shift focus.

“Hopefully in conjunction with McLaren and other providers, we’ll discover if we need areas to improve, or if we have some deficiencies that we can try to get some resources from multiple places to address those,” he says.

Once McLaren settles into the community, Lawson says he hopes healthcare services will start to grow again in Cheboygan.